Changing Times for Trademarks
There have been significant changes to trademark laws and regulations around the world over the past couple of years, including over the last 12 months. Maura O’Malley reports on developments in several jurisdictions in different regions.
“In the new Manual it clearly indicates that single color trademarks cannot be registered. So, it is a bit surprising.”
Zhu Zhigang, Wanhuida Intellectual Property (China)
China’s continued attempts in recent years to tackle bad faith trademark filings were joined by a raft of new regulations governing the use of trademarks in the country. Meanwhile, South Korea has also focused on use, changing its law to encompass digital use more clearly. Elsewhere, the Andean Community has developed a new regime for so-called country trademarks, and in the United States, the Trademark Modernization Act is now in effect, while an act to combat online counterfeiting is moving through the legislative process.
China
In China, the China National Intellectual Property Administration (CNIPA) released its Guidelines on Trademark Examination and Review in November 2021, taking effect on January 1, 2022. Used daily by trademark examiners in China, the manual had its last significant revisions in 2016.
Many of the revisions center on the application of articles from China’s Amended Trademark Law of 2019, which aims to curb bad faith trademark filings in China without intent to use.
Zhu Zhigang, managing partner at Wanhuida Intellectual Property (China), said that Article 4 of the Amended Trademark Law was introduced to target two independent conditions: no intention to use and bad faith. In the new Trademark Examination Manual, CNIPA “specifies the factors to consider when evaluating what kind of situations are considered as bad faith filings without intention to use. For example, the Trademark Office will consider this is the case if the number of trademark applications is huge and clearly exceeds the demand for normal production and business activities,” he explained.
There are other examples of potentially malicious activities, for example “if the applicant copies a large number of prior trademarks of different rights owners with a certain degree of popularity, or the applicant tries to force cooperation from the prior user of the trademark, demanding the high transfer fees or license fee or even compensation for infringement.”
But, he pointed out, other activities were acceptable, such as defensive trademarks and filing in limited numbers for future business.
Article 44.1 of the Trademark Law allows rights owners to invoke invalidation based on absolute grounds or unfair means, such as bad faith. However, Mr. Zhigang noted, in this Manual, CNIPA says that it is also possible to invoke this article in opposition cases. “It is progress,” he said.
Article 8 of the Trademark Law enumerates the different types of signs that may be registered as trademarks, such as words, drawings, letters, and color combinations. The list ends with “etc.,” he noted.
In 2020, the Supreme People’s Court of China (SPC) overruled a Trademark Office decision that had found the shoe designer Christian Louboutin’s color and position mark not registrable.
The SPC considered that since there is “etc.” in Article 8, “it means that a single color is not totally excluded by the law from being registered as a trademark,” Mr. Zhigang said. But “in the new Manual it clearly indicates that single color trademarks cannot be registered. So, it is a bit surprising.”
Mr. Zhigang also noted that the Louboutin case had now returned to the Trademark Office, and they will render a new decision on it. “So, let’s wait and see how they will decide,” he added.
Discussing the future trends in trademarks in China, he said the main focus will still be on tackling bad faith trademark filings. Additionally, the drive for procedural efficiency will continue, with the courts and CNIPA striving for speed. The trademark filing process is targeted to be completed in four months.
However, while speed is generally welcomed, the courts and the Trademark Office will not wait for the results of “relative grounds for refusal” procedures before processing particular applications or cases, he explained.
“For example, if I file a new trademark application, but it is rejected because of prior registrations, and then I try and cancel and revoke these prior registrations, it takes a long time,” he said. The Trademark Office will not stop the clock on a filing while prior registrations are being revoked, which means in practice, those prior registrations cannot be cancelled before a company’s own filing expires.
“If we can combine all relative cases into one, or at least hold on to the application pending the results of the contentious procedure… that would be good. The problem is not in the law, but in the implementation of the law,” he said.
“Under the new system, practitioners may be less hesitant to attempt novel arguments against preliminary rejections…”
Angela Kim, Kim & Chang (South Korea)
New Criteria
On December 13, 2021, CNIPA published new regulations on the use of trademarks in China, which came into force on January 1, 2022. Ten types of infringement and unlawful conduct relating to trademark protection are set out.
Among them, some sections are particularly relevant to use of trademarks in China by foreign manufacturers. According to Article 23 of the new rules, a foreign trademark owner cannot use a registration symbol or any other symbol representing registration if the trademark has not been registered in China. This applies even if the trademark has been registered abroad, as stipulated in Article 52 of China’s Trademark Law. If an unregistered trademark is used and it has several meanings, including one not allowed by the Chinese Trademark Law, this would be seen as a breach of Article 14 of the new rules.
Article 10 of China’s Trademark Law lists the types of signs that are subject to absolute grounds of refusal and may not be registered or used as trademarks: those that refer to ethnically discriminatory persons; those which are misleading and may cause the public to misunderstand the quality and other characteristics of the goods or place of origin; and signs that are detrimental to socialist morals and mores.
According to Article 15 of the new rules, if the sign continues to be used even though it has already been decided that it violates Article 10, the Administration for Market Regulation (AMR) should apply the penalties provided by law.
According to Mr. Zhigang, the implementation of Article 15 of the criteria is a cause for concern, noting: “The refusal of a trademark application by the CNIPA is often subject to judicial review, and the AMR will not be aware of such reviews because this information is not public. Enforcing this provision while the refusal decision is not final would be problematic, particularly considering that there is hardly any consensus between the CNIPA and the courts on interpretation of Article 10.”
Article 16 goes on to deal with the scenario where a sign has been approved and used but the AMR still suspects there might be a possibility that such a sign violates Article 10. Under these circumstances, it should then report the case to CNIPA.
In addition, according to Article 6 of China’s Trademark Law, it is compulsory for certain goods to be marketed with a registered trademark, including cigarettes. In Artice 4 of the new rules, CNIPA clarifies that this obligation also applies to imported cigarettes.
South Korea
On February 3, 2022, the National Assembly, Korea’s legislative branch, promulgated amendments to the Korean Trademark Act. The amendments supplement the definition of “use of a trademark” and enhance procedural convenience for applicants as well as their ability to secure rights. The amendments have clarified the statute to reiterate that the distribution of downloadable digital goods, as well as more traditional distribution methods, also constitutes use of a trademark. The amendment will come into effect on August 4, 2022.
Ben Beyong-Ho Yuu, managing partner at Nam & Nam (South Korea), said: “The expansion of the types of online trademark ‘use’ reflects the growing increase in the number of digital transactions in the e-commerce market. The new act will be welcome news for trademark owners, for example when they need their own online use to be recognized as legitimate ‘use’ to defend a non-use cancellation action, or when their trademarks have been used online by others without authorization and they wish to pursue a claim of infringement.”
Angela Kim, senior foreign attorney at Kim & Chang (South Korea), described further amendments. Under the current Trademark Act, even if only some of the designated goods have been preliminarily rejected, the examiner must finally reject the entire application unless every rejection ground has been overcome. Following such a final rejection, even if the applicant is willing to simply delete the objected-to goods, for the application to proceed even for the non-rejected goods, the applicant must file an appeal to the Intellectual Property Trial and Appeal Board (IPTAB) to delete the objected-to goods or file a new application designating only the non-rejected goods.
For example, if one out of five designated goods have been preliminarily rejected and efforts to overcome the objection/citation fail, the application in its entirety will be finally rejected and an appeal to the IPTAB must be filed to delete the objected to item. The IPTAB appeal proceedings will then take about eight to twelve months to reach a conclusion.
Under the new partial rejection system, the Korean Intellectual Property Office (KIPO) will start issuing final rejections against only those goods that have been rejected (as IP offices do in other jurisdictions such as China, the EU, Germany, Sweden, Turkey, UK, and U.S.). The remaining goods can thus proceed to registration without the applicant having to take additional steps. This system will apply to applications filed on or after February 4, 2023.
KIPO has also introduced a new re-examination procedure. If it issues a final rejection which can be overcome simply by amending the goods description, the applicant may submit the amendment together with a request for re-examination without having to undergo an appeal proceeding before the IPTAB. A re-examination request may be filed before the deadline to appeal the final rejection to the IPTAB (three months from the date of receipt of the notice of final rejection), and if the re-examination request is filed, the final rejection will be deemed to be revoked.
A re-examination request may only be submitted once, and no re-examination may be requested once an IPTAB appeal has been filed. In addition, this system does not apply to applications filed under the Madrid Protocol. This system will apply to applications filed on or after February 4, 2023.
The re-examination system does not apply to applications filed under the Madrid Protocol. Thus, applicants who designate South Korea under the Madrid Protocol must file an appeal to the IPTAB if they wish to overcome a final rejection by amending the designated goods.
Discussing the impact that the changes will have on practitioners in Korea and abroad, Ms. Kim said: “Under the new system, practitioners may be less hesitant to attempt novel arguments against preliminary rejections, since the entire application will no longer be at risk of rejection if the arguments are not accepted. We also expect there will be far fewer IPTAB appeals filed.”
“The country trademark is an opportunity to exalt the qualities of the country members of the Andean Pact.”
Margarita Castellanos, Castellanos & Co. (Colombia)
Andean Community
The Andean Community, a free trade area comprising Bolivia, Colombia, Ecuador, and Peru, recently established a common Andean system for the protection of “country trademarks” among the four member countries. Decision No. 876, the so-called Cartagena Agreement (the Andean Pact), took effect on April 23, 2021. A country trademark is any sign designated or used by another member country to promote its image inside and outside that country and to promote tourism, culture, gastronomy, national production, exports, or investments relating to the member country.
The country trademark will be protected for an indefinite period and will not be subject to use as a condition to maintain that protection.
“The country trademark is an opportunity to exalt the qualities of the country members of the Andean Pact,” said Margarita Castellanos, partner at Castellanos & Co. (Colombia).
According to Ms. Castellanos, the impetus behind this special protection was to incentivize the member countries’ exportations, tourism, investment, gastronomy, national production, and so on. “The country trademark serves to represent the national identity of the member country in the rest of the world,” she said.
While the regime only involves the countries of the Andean Pact, she pointed out that the country trademark could only be protected in third countries if these countries established an equivalent system of protection. Also, country trademarks from third countries could be protected in the member countries of the pact if there was an international agreement.
“It's a good idea in principle to incentivize platforms to help curb the sale of counterfeits on online marketplaces, which reaches new heights year after year, by taking steps to ensure the legitimacy of sellers and removing repeat infringers.”
Chun T. Wright, The Law Office of Chun T. Wright (US)
United States
The U.S. Trademark Modernization Act of 2020 (TMA), which came into effect in December 2021, creates two new ex parte proceedings for the cancellation of a registration when the required use in commerce of the registered mark has not been made. These are expungement and re-examination proceedings.
Joseph Matal, partner at Haynes and Boone, LLP (US), who was involved in some technical elements of the TMA while working at the U.S. Patent and Trademark Office during the law’s development, said that the two proceedings allow clients to challenge different aspects of non-use—and to do so anonymously.
Re-examination proceedings are instigated when the mark is claimed to be not in use in commerce at the relevant time—that is, by the filing date of the application, by the filing date of an amendment to allege use, or by the deadline for filing a statement of use. “But that’s only relevant for U.S. marks. Most foreign countries don’t require use of the mark for registration,” he pointed out.
Expungement proceedings are reserved for when the trademark is claimed never to have been used in commerce. “This is for foreign marks granted that grace period, when they weren’t required to be used initially, but had to be used at some point to be valid in the U.S.,” Mr. Matal explained.
Another law in the pipeline in the U.S. is the SHOP SAFE Act, which is intended to crack down on the sale of counterfeit goods on online platforms. Currently, the rule is the same for copyright and trademark infringing content, with a reliance on notice and takedown. The Act passed the U.S. House of Representatives in February 2022, and it is now with the U.S Senate.
Speaking to the INTA Daily News for its pre-Annual Meeting issue, U.S. Senator Chris Coons (D-Delaware) explained that the “SHOP SAFE Act will encourage e-commerce providers to adopt anticounterfeiting best practices designed to screen out dangerous counterfeit goods before they are offered, in exchange for a safe harbor from contributory trademark infringement liability.”
Chun T. Wright, founder of The Law Office of Chun T. Wright (US), said, “It’s a good idea in principle to incentivize platforms to help curb the sale of counterfeits on online marketplaces, which reaches new heights year after year, by taking steps to ensure the
legitimacy of sellers and removing repeat infringers.” But she cautioned that “the Act should not be limited to goods that ‘implicate health and safety—which is ambiguous and can be difficult to ascertain—as many counterfeit goods result in serious other harms such as economic, security, and social.” l
Footage used under license from Envato Elements / sora_photography
Photo of the Day
A long time coming: 2022 INTA President Zeeger Vink (MF Brands Group, Switzerland) arrived at the Walter E. Washington Convention Center yesterday to collect his badge and check out the environs, excited to meet colleagues again at the Association’s first full-scale, in-person Annual Meeting since 2019. Tomorrow, he will take to the stage during the Opening Ceremonies to discuss an issue of great value to brand professionals.
Saturday, April 30, 2022
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