(By Luo Yanjie) Trademark Office (the “CTMO”) has been increasingly tightened its standards on trademark reviewing and claiming that the trademark itself may cause “adverse effect”. Competent authorities are more than inclined to use such grounds indiscriminately by treating it as an all-purpose shield to deal with distinct situations. Recently, the Supreme People’s Court remedied such phenomenon by making its decision on the GAP Underwear’s cases. The following is our detailed introduction:

Introduction to the Case:

Retrial Petitioner (Plaintiff at first instance, Appellant at second instance): GAP ITM INC. (盖璞（国际商标）公司, referred to as “GAP”);

Retrial Respondent (Defendant at first instance and Respondent at second instance): Trademark Review and Adjudication Board (the “TRAB”);

Court of First Instance: Hefei Intermediate People’s Court No.（2012）合民三初字第00163号

Court of Second Instance: the Higher People’s Court of Anhui Province  No.（2013）皖民三终字第00072号

Retrial: Supreme People’s Court  No.（2015）民提字第38号

GAP filed an application for the disputed trademark (Registration No. 7550607) under Class 25 in jerseys (clothing), clothing, teddies, pants, training pants, smocks, etc. on July 17th, 2009. On August 22, 2011, the CTMO rejected its application on the grounds that the wording “underwear” in the disputed trademark may mislead consumers into fault purchase by regarding the approved goods as underwear and even may cause adverse effects, which constitutes the invalidation of Section 8, Paragraph 1, Article 10 of the Trademark Law. Upon the affirmation of such decisions by TRAB, GAP filed administrative lawsuits to the court. However, both the courts of first and second instances affirmed the decision of the TRAB.

Being dissatisfied by such decision, GAP appealed to the Supreme People’s Court and the Supreme People’s Court supported GAP ‘s retrial petition by giving the following reasoning:

Firstly, it is not even possible that the disputed trademark itself can cause adverse effects on social interests or public orders, and thus the disputed trademark does not constitute restricting scenario under Section 8, Paragraph 1, Article 10 of the Trademark Law.

Secondly, the disputed trademark (No. 7550607) and a prior trademark “GAP Underwear” (No. 7547927) are similar trademarks with regarding to the approved goods and the trademark itself constitutions. However, the TRAB did not provide a particular factor to explain its rejecting reasoning for making trademark-reviewing decisions.

Lawyer’s comment:

1. Applying scope of “other adverse effect” as regulated in Paragraph 1, Article 10 of the Trademark Law.

The Paragraph 1, Article 10 of the Trademark Law stipulates the details of the marks that may not be used as trademarks, particularly Section 8 of this paragraph further stipulates “signs detrimental to socialist morality or mores or having any other adverse effect” may not be used as trademarks. However, in legal practice, the TRAB frequently applies to “other adverse effect” as a rejecting reason, which is becoming an all-purpose ground that can be used to reject some trademark application. One of the stated reasoning of the Supreme People’s Court shall efficiently reduce such abuse of the article in CTMO’s trademark reviewing, which stipulates that “Article 10 shall be a value judgement in determining whether trademark will exert adverse effects on public order and morale. Comparatively speaking, absolute grounds of trademark application which are used to reviewing an individual case shall be more strictly used other than the relative grounds on which the trademark may damage a civil subject.

2. Can applicant use the consistent trademark review standards adopted by CTMO as the reasoning to file re-examination or appeal?

Another highlight in this case is that the Supreme People’s Court believed CTMO and TRAB should keep a consistent standard through trademark-reviewing process. Considering the facts that GAP succeeded in applying a same “GAP Underwear” before and that the disputed trademark was just a supplemental application to the successfully prior registered one, however, the two same trademarks received distinctly different decisions. Indeed, far from being a rare case, such situations of existing inconsistent standards are quite common. Where some prior judicial decisions determined that the CTMO should keep consistent standards, as we have tried to use this consistent standard of CTMO as a reasoning applying for reviewing for those rejected trademark several times, but the TRAB seldom adopt it in practice. We understand there are extremely large quantities of trademark application every year, but we still hope competent authorities could be more serious about it, which in return will efficiently reduce costs and expenses for trademark applicants.

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