Would the Cancellation of the Applicant Lead to the Invalidity of Trademark Application in China?

(By Luo Yanjie) Abstract: trademark application may take a long time. If the applicant encounters any change on its subject qualification, it shall handle the trademark transfer procedure as soon as possible, or otherwise the trademark could be cancelled.

It normally takes about one year from submitting the trademark application to the right granting. If during the application process it encounters any opposition, the time it takes for right granting adjudication would be much longer, possibly extending to several years. While during that period, the applicant may face a change on its subject qualification, and then will the trademark application be influenced in such a situation? In today’s post, you will see a typical case that we would like to share it with our readers.

Case Summary:

Zhongshan Tiancheng International Investment Co., Ltd. (“Tiancheng” hereinafter) was founded on August 18th 1995, and was liquidated on April 16th 2006. The company filed an application for No. 1270630 trademark “BORCAM” (“opposed trademark” hereinafter), which is assigned for use of Class 21 glass containers and other products. After the preliminary examination and publication in the trademark office, Papabas Company filed an opposition to Tiancheng’s application to the office. However, the authority approved Tiancheng’s trademark application. Dissatisfied with the approval, Papabas applied for a reassessment of Tiancheng’s application. On April 18th 2007, the Trademark Adjudication and Review Board (the “Board”) ruled to sustain the approval of the trademark application. Still dissatisfied with the result, Papabas filed the lawsuit in court.

After the hearing, the court judged that Tianchen was liquidated on its own decision, and has handled the procedure of cancellation after the liquidation in the administration of industry and commerce. Before liquidation, the shareholder of the company is the person in charge of the liquidation and could represent the company in a lawsuit. However, after the liquidation of the company, since the company no longer exists, the shareholder  can no longer be the representative of the company and act in the lawsuit. Considering that the subject qualification of the trademark application’s applicant has been removed, the court found that the opposed trademark shall not have been approved, and sided with Papabas’s claims.

Lawyer Comments:

1. Upon the subject’s qualification change, the transfer procedure shall be immediately updated.

According to Paragraph 1 of Article 26 in the Implementing Rules of the Trademark Law (the “Rules”):

“If the exclusive right to use a registered trademark is transferred for reasons other than assignment, the party receiving the transferred exclusive right to use the registered trademark shall go to the Trademark Office with relevant certificates or legal instruments to go through the formalities for the transfer of the exclusive right to use the registered trademark.”

But as provided in Article 47 of the Rules:

“Where the registrant of a trademark dies or ceases, and no formalities have gone through for transfer of the registered trademark at the expiration of one year from the date of the death or cessation, any person is entitled to apply to the Trademark Office for the removal, from the Register, of the registered trademark.”

According to the above regulation, once any change occurs over the subject qualification of the applicant, the applicant shall go through the transfer procedure with the authority. If the successor delays going through the procedure as the subject qualification no longer exists, the trademark face the risk of being removed. In this case, upon the issuance of the decision of opposition review, the applicant Tianchen was already liquidated for more than one year (Tianchen was liquidated on April 16 2006, and the decision was issued on April 18th 2007), but its shareholder did not gone through the procedure of transfer, and therefore the trademark right was removed.

2. The case again highlights the disadvantage of long administration processing time for consideration in trademark application.

In this case, the applicant Tianchen filed the trademark application in 1997 and till its cancellation in 2006, its trademark application remains in the status of “consideration”. Although its shareholder did not go through the procedure of transfer, which ultimately led to the removal of its trademark right, we cannot deny the fact that the length of administrative consideration time is also one of the reasons that made the shareholder neglect the transfer. The trademark office and the Board both approved the trademark application of Tianchen, but due to opposition after the approval, the certificate was not issued. For those shareholders with no knowledge in the field of trademark, when possessing no trademark, it is natural for them to not consider the unsettled trademark.

CertainlyIn recent years, with the shorter period on trademark adjudication, the current trademark application until publication period takes only approximately8 months, which is about the same as many developed countries like USA or Japan. Meanwhile, the attorneys at our law firm also practice in the trademark agency in China, like trademark transfer, trademark cancellation, trademark opposition, and for more details please CLICK HERE.

Lawyer Contacts

You Yunting86-21-52134918  youyunting@debund.com/yytbest@gmail.com

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