The Cases Overview of Trademark Administrative Reconsideration and Analysis in 2009

2010/09/06,By Shi Xinzhang,[Trademark]

Starting from 2009, the Trademark Review and Adjudication Board (TRAB) of the State Administration for Industry and Commerce took over the responsibility for the administrative reconsideration of procedural disputes in trademark registration from the Law Department of the State Administration for Industry and Commerce (SAIC). Administrative reconsideration over procedural disputes in trademark registration is an administrative process that is instigated by a citizen, a legal person, or other organizations with the State Administration for Industry and Commerce over any specific administrative actions taken by the Trademark Office. The complaint can be any issue regarding trademark application, recordal of changes, recordation of assignment, renewal, cancellation, withdrawal, and opposition, etc., which the complainant deems as violating of a legitimate right. However, the trademark review and adjudication cases stipulated by the Trademark Law, the Implementing Regulations of the Trademark Law and Article 2 of the Guide for Trademark Review and Adjudication cannot be brought under the reconsideration procedures.
This process is referred to as “trademark administrative reconsideration” and it functions, on one hand, as an administrative remedy for a party (relevant persons) affected by administrative acts. On the other hand and more importantly, it serves as a self-correcting monitoring mechanism within the administrative agency. It is worth noting that although both trademark reconsideration and review are handled at the TRAB, there are significant differences in the examination processes, applicable laws, examination objects and examination periods.
In 2009, the TRAB docketed a total of 88 requests for administrative reconsideration and concluded 74 of them, some of which were typical cases. In order to enhance peoples’ understanding of IP-related work in trademark administrative reconsideration, this article will give an introduction to the adjudication of trademark administrative reconsideration cases and analyze four typical cases from 2009.
I.    Docketing of cases
By the end of December 2009, the TRAB had received 98 requests for administrative reconsideration, of which 88 were docketed and of which 77 has been concluded. Among the cases concluded, 44 were upheld and 30 were withdrawn upon consultation with the Trademark Office for modifications of the office actions.
1. Diversified types of cases docketed
The cases of trademark administrative reconsideration docketed in 2009 involved 16 types of specific administrative acts rendered by the China Trademark Office:
1.     23 cases of refusal of registration;
2.     18 of rejection of opposition;
3.     16 of disapproval of assignment (including invalid international registration assignment);
4.     7 of denial of renewal;
5.     6 of rejection of assignment applications;
6.     3 of cancellation of assignment;
7.     2 of refusal of registration for termination of registrants;
8.     2 of presumed waiver of modification applications;
9.     2 of presumed abandonment of recordal of changes;
10.   2 of presumed abandonment of registration application;
11.   2 of refusal of recordation of changes;
12.   1 of invalid application;
13.   1 of certificate of correction;
14.   1 of notification of decision of opposition;
15.   1 of rejection of a renewal application; and
16.   1 of notification of response to opposition.
Judging from the types of cases accepted, the first five types of cases, (refusal of registration; rejection of opposition; disapproval of assignment; denial of renewal and rejection of assignment applications) accounted for 77% of the cases. These are hot spots in trademark administrative reconsideration cases.
2.   Cases not docketed on simple grounds
Ten requests were not docketed in 2009 because the applicants failed to understand the difference between a trademark review and trademark administrative reconsideration. According to Article 32 of the Trademark Law, a trademark applicant dissatisfied with an office action may seek TRAB review, but not reconsideration. The TRAB, while denying the requests, informs complainants of the possibility of seeking a trademark review, so as to protect their rights for a proper remedy.
II.       Adjudication of cases
1. Careful discharge of reconsideration duties to ensure quality of work product
As of the end of December, 74 cases had been concluded among the 88 administrative reconsideration cases docketed in 2009, and the closing rate was 84%. According to Administrative Reconsideration Law, the time limit for an administrative reconsideration case is, in principle, 60 days; very short. Yet the TRAB made decisions on all of the 74 cases within the prescribed time limit and no extension was made. In order to guarantee examination quality of the reconsideration cases, the TRAB has put in place a leader-on-guard mechanism, namely, either an acceptance of a case or a trial decision shall be reported for the case handler with preliminary opinions given to directors and leaders of the TRAB for approval. From there, a ruling on the case, once preliminarily reviewed by the leaders of the TRAB, is reported to the director in charge of the SAIC for review.
2. Equal Treatment of the parties and fair trial in administrative reconsideration
Many reconsideration cases are difficult because they are highly specialized. Private property rights and interests are at stake and many administrative steps are involved in the process, such as trademark application, recordal of changes, assignments and renewals. The TRAB, in the adjudication process, must decide based on facts and laws, and takes full account of whether the evidence is sufficient, whether the major facts are clearly ascertained and whether the application of law is correct in the examination of specific administrative acts. Since complainants are at a disadvantage, the TRAB takes great care to protect their legitimate rights and interests and carefully supervises administrative powers in the administrative reconsideration. The TRAB not only emphasizes the protection of interests of the relevant persons, but also focuses on the maintenance of prestige and the authority of trademark administration authorities to guarantee normal operations and order in trademark administration. The TRAB maintains timely communication with the CTMO when hearing thorny cases in order to ensure it has a true grasp of the cases and renders accurate decisions.
3. Balance of legality and rationality
Legality and rationality are the basic requirements for administrative actions, and an inquiry into both is a unique aspect and advantage of administrative reconsideration. Therefore, in handling administrative reconsideration cases, it is necessary to see not only whether the specific administrative act is legitimate, but also whether the act is rational. The TRAB does not simply reverse or sustain the challenged administrative acts, but takes the initiative to communicate with the defending party to get an understanding of the case, and make suggestions. It ensures that both parties have a comprehensive and objective understanding of the dispute, thereby facilitating mutual communication and consultation. In 2009, through communication and coordination with the CTMO, 30 cases were withdrawn by applicants because the CTMO modified its specific administrative acts. This approach not only simplifies the examination proceedings and improves the efficiency of an administrative reconsideration, but also promotes social harmony and stability.
4. Setting the mind free: Cherishing the concept that administrative reconsideration work must be adapted to and compliant with the rules of economic and social development.
Reconsideration is an administrative mechanism to resolve administrative disputes and settle social conflicts, and plays an important role in building a government ruled by law and building a harmonious society. The TRAB cherishes the concept that administrative reconsideration work centers on the core task and serves the overall good, pursues the goal of ensuring that, “the dispute settles as the case closes.” It seeks to properly handle the interests of each party, and endeavors to achieve unity between legal effects and social effects in reconsideration decisions, so that the administrative reconsideration work adapts and complies with the rules of economic and social development.
5. Taking the initiative to respond to new conditions, studying and solving emerging issues in administrative reconsideration work
The TRAB is able to use innovative methods to solve new and practical issues in reconsideration work. For example, in 2009, there was a case where an administrative reconsideration decision failed to be served. In response the TRAB, after communication and consultation with relevant government departments, adopted the serving mode of having it published on the Trademark Gazette, thereby becoming the first to adopt using public notice to solve the issue of non-service of an administrative reconsideration decision.
III. Trademark case analysis of administrative reconsideration
1. In re Zhu in the Denial of request for trademark administrative reconsideration
Facts: In June 2009, an individual named Zhu requested administrative reconsideration of an official Notice of Trademark Rejection issued by the CTMO. Upon examination, the reconsideration agency dismissed the request.
Analysis: According to Article 32 of the Trademark Law, an applicant for trademark registration who is dissatisfied with a rejection decision by the CTMO, may, within 15 days of receiving the notification, request the TRAB for a review, such as the present case, which is subject to administrative reconsideration. Since the applicant failed to meet the 15 day deadline, the case could not be entertained. Currently, cases of trademark administrative reconsideration and those of trademark review are both handled and heard by the TRAB; however, both types of cases are significantly different from each other in legal nature and are not substitutable. If a complainant seeks the wrong writ by requesting administrative reconsideration, he might miss the deadline for review as a proper remedy. For this reason, one will be well-advised to distinguish the different remedies for different cases.
2. Administrative reconsideration case filed by Company A against Notification of Correction of Cancellation Application
Facts: On March 2, 2009, Company A filed a request for cancellation of a trademark registration in the name of Company B on the grounds of non-use for three consecutive years. On March 13, 2009, an assignment of the registration was recorded by the CTMO in favor of Company C. On March 30, 2009, the CTMO issued a Notification of Correction of Cancellation Application (a.k.a. Notification of Correction) to Company A, requiring it to correct the cancellation application. Company A claimed that its trademark cancellation application predated the assignment approval by the CTMO, and that the CTMO illegally demanded obligations by requesting it to correct the cancellation application, therefore, it filed an application for administrative reconsideration. After a hearing, the reconsideration authority ruled that the examination object in administrative reconsideration cases is legality and appropriateness of specific administrative acts. In this case, the specific administrative act of the CTMO, issuing a notification of correction, was held to be just one of the phases of the administrative acts in the acceptance proceeding  and not a final administrative decision with respect to Company A’s “trademark cancellation application.” Therefore, the normal administrative proceedings should not be disrupted before a final decision was made on whether the CTMO would accept the trademark cancellation application. Instead, the CTMO should make an independent adjudication as to whether Company A’s defense against corrections in the correction proceeding was tenable or not. Consequently, the applicant’s reconsideration claim for cancellation of the notification of correction could not be heard.
Analysis: This is a typical case applicable to the “Doctrine of Ripeness in administrative acts.”
The Doctrine of Ripeness in administrative acts originates from judicial practice in the United States and is a fundamental principle applicable in hearing administrative cases. The doctrine stands for the principle that an alleged administrative act is ripe for judicial action only if it has a negative impact on the relevant persons in a concrete way and is suitable for court review. Administrative remedies must be exhausted before an appeal is filed. A case is not “ripe” until the decision is final. This doctrine reflects the concept that the courts shall not interfere too early with administrative activities, so as not to disrupt the normal administrative proceedings, until an administrative decision has been formalized. In other words, only after the administrative act is “ripe” can the relevant persons seek relief from the court.
The Doctrine of Ripeness should also be followed in adjudicating cases of administrative reconsideration. In the above case, it is a typically “premature” administrative act for the CTMO to serve the correction notification upon Company A. The service of the notification is only a phase within the proceedings and is not a final decision in the acceptance phase. If Company A does not agree to make corrections, it can present reasons for why it believes it should not be compelled to do so. The CTMO will determine whether the reasons are tenable or not and make a final decision. Therefore, the dispute between the parties arising from the corrections does not fall with the scope of the legality and appropriateness of the case, and the applicant’s reconsideration claim for cancellation of notification of correction cannot be heard.
3. Administrative reconsideration case filed by a natural person surnamed Zeng who was dissatisfied with Notification of Non-acceptance of Trademark Opposition Application
Facts: The trademark “ECKOUNLIMEO” was preliminarily approved and published February 13, 2009 under No. 4642949 in the Trademark Gazette Issue No. 1155, to which the opposition period spanned from February 14 to May 13, 2009. An individual named Zeng, from Guangzhou, sent a request of opposition by a commercial courier on May 13, 2009. It arrived at the CTMO date-stamped May 15, 2009. Thereafter, the Trademark Office rejected the request on the grounds that the request was filed beyond the three-month deadline. Zeng was dissatisfied with the decision, arguing that the mailing date of May 13 by the courier was not beyond the statutory deadline, and therefore petitioned to cancel the specific administrative act. The reconsideration agency, upon examination, stated that the opposition filing date should be the date when the Trademark Office received the opposition documents, which was beyond the statutory deadline. Therefore, the Trademark Office decision was upheld.
Analysis: The key issue of the case is how to determine the nature of delivery by commercial courier.
Article 4 of Rules for the Implementation of the Postal Law provides that: “Without the entrustment by the postal enterprises, no unit or individual may operate posting and delivery of letters, postcards or other articles with characteristics of mail, except as otherwise provided by the State Council.” While in this case, the courier employed by the complainant to deliver the opposition application was a commercial courier and did not belong to a postal service, no evidence was available to show that the courier acted on behalf of a postal service to engage in the posting and delivery of letters. Therefore, the delivery of the opposition documents by the commercial courier did not amount to posting and delivery in the postal law and was be regarded as a delivery by hand.
According to Article 10 of the Implementing Regulations for the Trademark Law, “unless otherwise provided for in these Regulations, the date on which a party concerned submits the documents or materials to the CTMO or the TRAB shall be the delivery date, in the case of hand delivery.” Therefore, the delivery date should be fixed on the actual date of receipt of the opposition documents by the CTMO. In this case, the opposition deadline expired on May 13, 2009, while the CTMO received the opposition application materials on May 15, 2009, beyond the statutory opposition period Therefore, it was not inappropriate for the CTMO to make a non-acceptance decision.
The significance of the case lies in that it expressly determines the nature of posting and delivery by an ordinary express courier; namely, it is not posting and delivering as prescribed in the postal law. In the meanwhile, the case reminds the parties and trademark agencies that they should be cautious and try to entrust state postal enterprises in the submission of legal documents in order to get confirmation for the delivery date. If a complainant relies on a state postal enterprise the rule is the “mailbox rule”, which states that a filing is deemed delivered on the date it is postmarked as sent. If a courier that does not meet the requirements of Article 4 is chosen, the applicable rule is the “acceptance rule,” which states that a filing is deemed delivered on the date it arrives.
4. In re Company A of Hangzhou for dismissal of request for recordal of Assignment
Facts: Company A, from Hangzhou, contended in its request for reconsideration that it had entered into an agreement with Company B, from Lishui, for assignment of two trademark registrations; No. 6406253 and No. 6406254. As Company A went through formalities for the assignment, the CTMO received a letter from the assignor, Company B, claiming that the assignment was not its genuine intention and wanted Company A to be required to make corrections by submitting the relevant notarized materials. Since Company A failed to produce any corrections, the CTMO denied recordal of the assignment. Company A claimed that the agreement, once executed, should be honored and both parties should faithfully execute their obligations stipulated in the agreement. On this basis it argued that it was not reasonable for the CTMO to demand the applicant submit supplemental materials based solely on the statements of the assignor, and that the CTMO should confirm and protect the legal effectiveness of the assignment agreement based on the precondition of filing the trademark assignment agreement by Company A. Therefore, Company A requested cancellation of the decision rendered by the CTMO to disapprove the assignment. The reconsideration organ, after adjudication, upheld the specific administrative act by the CTMO.
Analysis: The significance of this case is that it expressly rules that the civil dispute between the parties concerning assignment of trademark rights does not fall into the scope of assignment examination by the CTMO, neither does it fall into the scope of administrative reconsideration.
The precondition for CTMO approval of the trademark assignment is that both the assignor and the assignee have reached an agreement on the trademark assignment. In this case, although the applicant, Company A, had filed the trademark assignment agreement entered into with, Company B, the assignor, sent a letter to the CTMO denying assignment of the relevant trademarks to Company A. Therefore, in order to protect the legal rights and interests of the trademark assignor and prevent false assignment from taking place, the CTMO served Notification of Correction for Assignment Application on Company A, demanding it produce notarized materials to prove the genuine intentions of the trademark assignment. However, Company A failed to provide any supplements as required; therefore the CTMO decision to disapprove the assignment application was not inappropriate. Company A claimed that the trademark assignor should not so easily overturn the trademark assignment agreement on the grounds that legally effective agreements should be protected by law. The reconsideration organ ruled that the agreement dispute between Company A and the trademark assignor was a civil dispute and thus did not fall within the scope of examination and handling of trademark assignment, and that Company A should settle the dispute through other means, therefore, its claim was no be upheld.

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