Trademark owners: watch out for upcoming TRAB Rules

China is speeding up the preparations necessary for the entry into force of the newly amended Trademark Law, which is due to occur on May 1 2014. 

The State Administration for Industry and Commerce (SAIC) is believed to have sent its draft implementing regulations to the State Council for final review and approval. At the same time, another set of important rules is almost ready to be released: the SAIC closed the public comment period for its proposed changes to the Trademark Review and Adjudication Board Rules (TRAB Rules) on March 11 2014. The final version is expected to be released before May 1. The TRAB Rules are significant because they govern the procedural and evidentiary aspects of the TRAB proceedings, including the review of registration, opposition and cancellation decisions. 

While most of the changes to the TRAB rules are intended to update the current rules to bring them into line with the amended Trademark Law, several important changes are noteworthy:

• Invalidation - the amended Trademark Law establishes a new invalidation procedure, which replaces one of the cancellation proceedings available under the current law. Although the rationale underlying cancellation and invalidation proceedings is similar, trademark owners must be fully aware of the existence of the new procedure.



• Shortened deadlines - according to the current TRAB Rules, an applicant is entitled to file supplemental arguments and evidence within three months of the date of filing of the initial arguments. The new TRAB Rules shorten this deadline to 30 days, which may cause significant problems to overseas brand owners.  The change is apparently due to the TRAB’s attempt to comply with the statutory time limit within which trademark prosecution proceedings must be completed under the new Trademark Law. 
  
  Foreign companies (especially small ones) often need more time to obtain competent advice, conduct investigations, and gather, translate and process the relevant evidence when preparing detailed arguments and evidence. The shortened deadline may thus put more pressure on them.
  
  The deadline for responding to a TRAB notice of amendment has also been reduced from 30 days to 15 days. This shortened deadline requires the parties to act very quickly, as missing the deadline may result in the withdrawal of the action.



• Stay of proceedings - the TRAB has failed to address the possibility of suspending proceedings before it pending the outcome of related cases. Brand owners often face scenarios whereby the strategy employed in one case depends on the outcome of another. If the TRAB rushes to make a decision before other related matters are adjudicated, it may cause serious problems. If the final version of the TRAB Rules does not address this issue, the shortened deadlines will make the problems even worse.



• Settlement - Article 8 of the proposed changes to the TRAB Rules stipulates that the parties are entitled to reach a settlement provided that it does not contradict the public interest or a third party’s interests. Article 34 of the new TRAB Rules allows a party to settle with the TRAB during a judiciary review of the TRAB's decision before the court of first instance, if the facts and/or applicable law on which the TRAB relied on in its decision have changed (eg, the cited mark has become invalid). These changes show some flexibility on the TRAB's part; this may be a sign that the TRAB will be more receptive to the co-existence of similar trademarks if the parties have no objection.



• Electronic filings/notices - no electronic filings are allowed under the current TRAB Rules, but this is going to change under the new rules. Parties may opt for either hard-copy or electronic filings with the TRAB, which may issue notices/decisions in electronic form.



• Retroactivity - according to the new TRAB Rules, the new Trademark Law will be applied to pending opposition appeals and trademark application refusal appeals that were not adjudicated before May 1 2014. However, the current Trademark Law will be applied in invalidation proceedings if the trademark in dispute was registered before May 1 2014. As such, parties must be familiar with both the current and the new Trademark Law during the transition period, and make smart decisions when choosing the timing of some appeals.

In conclusion, brand owners must closely review the implications of the new TRAB Rules, once passed, and decide on possible adjustments to current trademark strategies in China.

He Jing and Han Jinwen, AnJie Law Firm, Beijing