（By Luo Yanjie）Abstract: Current laws have no provisions as to whether a trademark coexistence agreement made by and between the trademark holder with a prior trademark and the trademark applicant with a latter trademark could impact the validity of the latter trademark. Under such circumstances, the courts shall consider and decide whether to approve the above-mentioned agreement. Where litigation concerning trademark ownership affirmation takes the form of an administrative suit, the courts shall, within the scope of the Trademark Review and Adjudication Board’s (the “TRAB”) administrative acts, decide whether its administrative acts are valid and rational.
Considering the condition where a similar trademark has been approved by a prior application, the trademark coexistence agreement is a strategy adopted by a latter applicant who desires to obtain the trademark. However, in practice, reaching a trademark coexistence agreement does not always cause the latter applicant to obtain the trademark registration. In today’s post, we will share and discuss some failed cases with our readers.
Introduction to the Case:
On April 28, 2009, ScinoPharm Taiwan, Ltd. (the “ScinoPharm”) applied for a figurative trademark numbered 7358249 (the “dispute trademark”) under Class 5 for pharmaceutical ingredients. On April 19, 2010, the Trademark Office rejected its trademark application due to its trademark being substantially similar to the number 1734804 trademark (the “A trademark”) and the number 3004244 trademark (the “B trademark”).
Dissatisfied with the rejection, ScinoPharm applied for a reexamination by the Trademark Review and Adjudication Board (the “TRAB”) and once again was refused by the TRAB. Following this, ScinoPharm filed an administrative lawsuit. During the litigation period, a trademark renewal was not applied for the A trademark, and the trademark holder of the B trademark reached a trademark coexistence agreement with ScinoPharm.
The court, upon hearing the case in two instances, held that the invalid A trademark shall not be considered a similar trademark, and that the trademark coexistence agreement made by and between the trademark holder of B trademark and the ScinoPharm shall be taken into consideration as to whether the disputed trademark can be approved pursuant to examination standards as regulated in Article 28 of the Trademark Law. However, the court upheld that the disputed trademark was using a molecular structure graph. Such molecular structure graphs are well-known graphical structures in the field of chemical molecular structure, which should be regarded as a public resource. If the court approved the trademark application, it would damage public interests and improperly monopolize a public resource. Based on this reasoning, the courts rejected ScinoPharm’s application.
Lawyers’ Comments:
I． Is a trademark coexistence agreement useful in practice?
According to current Chinese laws, there is no clear provision that a trademark coexistence agreement made by and between the trademark applicant and the prior trademark holder of a similar trademark could affect the validity of the latter trademark. That is to say, generally the court will make a comprehensive decision dependent on different cases.
On one hand, a trademark application is regarded as a private right, and thus an applicants’ opinions should be respected. On the other hand, taking into account the fact that a trademark has the purpose of distinguishing the source of goods, the court should also protect consumers and prevent similar trademarks, thus avoiding consumer confusion. Based on the above two reasons, I believe, determining whether a trademark coexistence agreement is valid requires consideration of the following factors:
(a) Are the two trademarks completely the same?
If the prior trademark and the latter trademark are completely the same, even though the two parties have reached an agreement, the approval of the latter trademark application will definitely confuse consumers. Therefore, the courts shall, standing on side maintaining market order, not approve the latter application.
(b) Are the classifications of the two trademarks completely the same?
Although the latter trademark was refused because of being identical with or similar to the classification of a prior trademark, according to the classification of goods and services, a lot of goods are under the same classification. Therefore, under circumstances where two parties have reached an agreement, the courts should also examine an application’s classification so as to decide whether it could affect public interests.
II. Determining whether the court directly rejecting the applicant’s application for damaging the public interest is appropriate.
In this case, an interesting thing is that, the court decided the applicant shall not monopolize the trademark dependent on considering the molecular structure as a public resource, and not on the basis that the trademark coexistence agreement was invalid. In effect, this decision is denying the validity of the disputed trademark, not considering the similarity of the trademarks. Temporarily ignoring whether the decision is correct based on substantive laws, from the aspect of judicial proceedings, under circumstances where the Trademark Office and the TRAB never deny the validity of the disputed trademark, such a decision handed down directly by the courts in administrative litigation deprives the applicant of some manners of remedy.
In addition, the litigation of trademark ownership affirmation is naturally an administrative suit. The court shall, within the scope of administrative acts for administrations, decide whether its administrative acts are valid and rational. Therefore, the court in this case made a decision beyond the scope of the administrative acts for administrations, thus raising suspicion of exceeding its authority.
Lawyer Contacts
You Yunting：86-21-52134918 youyunting@debund.com/yytbest@gmail.com
Disclaimer of Bridge IP Law Commentary
Short Link: