Recently, a rejection notice was issued by the China National Intellectual Property Administration (“CNIPA”), stating that Company A's trademark application shall be rejected on the grounds that "Company A's trademark is similar to a prior invalidated trademark of Company B over similar services, but the invalidated trademark has not yet reached one year since the date of the invalidation."

It sounds unreasonable since the CNIPA has invalidated the prior trademark because it had constituted the situation specified in Article 44(1) of China Trademark Law (2019 version), "obtaining trademark registration by other improper means".  After that, the prior mark has been announced invalid over all services and published on Trademark Gazette.  That is to say, the cited mark is already in an "invalid" status and should not be an obstacle against Company A's later filing.  So why was the prior invalid mark still cited to reject Company A's later filing?  This is actually due to the "one-year isolation period" specified in Article 50 of the China Trademark Law.

Legal Basis

Article 50 of the China Trademark Law indicates that if a registered trademark is canceled, invalidated, or not renewed upon expiration, within one year from the date of cancellation, invalidation, or removal, the CNIPA shall not approve trademark registration applications that are identical or similar to that trademark.

Legislative Purpose

When a registered trademark is canceled, invalidated, or not renewed, the trademark owner's exclusive rights to the trademark cease to exist.  Under such circumstances, other entities or individuals may file trademark applications for registration that are identical or similar to the canceled, invalidated, or removed trademark without any conflict of rights and should be allowed to do so.  However, before the registered trademark being canceled, invalidated, or removed, they might have been used and more or less have had a certain impact in the market, except for cases where the trademark has not been used for three consecutive years.  In order to avoid the simultaneous existence of different entities providing goods or services under the same or similar trademarks in the market, causing confusion among consumers regarding the origin of goods or services, it is necessary to apply Article 50 of China Trademark Law to establish a certain period of isolation.

Therefore, this provision clearly stipulates that if a registered trademark is canceled, invalidated, or not renewed, within one year from the date of cancellation, invalidation, or removal, the CNIPA shall disapprove trademark registration applications that are identical or similar to that trademark.

Applicable Conditions

When making an examination decision, if someone else's identical or similar registered trademark has been invalidated, and it has been less than one year since the expiration of the deadline for appealing the decision of invalidation, then Article 50 of the Trademark Law should be applied for citation.

Our Perspective

From the above, it can be seen that the legislator established the "one-year isolation period" from the perspective of protecting consumer interests.  However, for this specific case, Company B's prior trademark was registered through improper means, which has already harmed the rights and interests of the real trademark owner, Company A.  Company B's improper registration not only confuses the public over the origin of goods or services but also disrupts the normal management order of trademark registration.  Therefore, regardless of whether the prior trademark has been put into use in the market or not, it constitutes an infringement on the rights and interests of Company A and consumers.  Company A's application of an invalidation action against the prior trademark is a remedy for its rights, and the CNIPA also concluded in the decision of invalidation ruling that the trademark falls under the situation of "obtaining registration by other improper means."  Although it has been less than one year since the expiration of the deadline for appealing the decision of invalidation, the trademark has already been announced as invalid over all services through Trademark Gazette.  In the case of a maliciously registered trademark that is already invalid, citing the prior invalid trademark to reject Company A's application is a secondary harm to Company A, and it significantly increases Company A's costs for trademark application for registration.  Apparently, such actions are contrary to the legislative purpose and should not be applicable to reject subsequent applications under the "one-year isolation period" provision.  In the long run, this not only increases the rights holder's costs for rights protection and registration but also undermines the confidence of rights holders in protecting their rights, which is clearly detrimental to intellectual property protection efforts.

Development Trend

There is no doubt, in today's rapidly developing society, there is a certain lag in the revision of laws, and continuous modifications and improvements are needed to adapt to practical needs.  The CNIPA recently drafted the "Amendment to the China Trademark Law (Draft for Comments)" in which corresponding modifications were made regarding Article 50 of the China Trademark Law, known as the "trademark registration isolation period."

Where the CNIPA believes that the trademark has been invalidated should not constitute an obstacle against subsequent applications.  Therefore, the CNIPA is considering deleting the provision in which the registration of a trademark declared invalid is mentioned.  If this revision is approved, in the future, trademarks that have been invalidated will no longer constitute obstacles against subsequent trademark registration applications.  It must be said that this is a "positive trend" for trademark rights holders and a progress in the law.