China: An Effective Mechanism To Address Trade Mark Dismissals In China – The PAR

In China, the Procedure for Administrative Reconsideration (PAR) is essentially an appeal mechanism established by the Administrative Reconsideration Law of China in 1999 aimed at providing some redress against illegal or improper administrative actions. It operates like a judicial appeal, albeit within the administrative realm and with correspondingly less burdensome formalities and costs compared to typical litigation.

PAR is a remedy available to claimants who consider that their lawful rights and interests have been infringed by an administrative body. The claimant is entitled to appeal to the next level of that body to request a review of the act complained of. The respondent is required to provide details of the grounds upon which the administrative act was based. The appellate tribunal will then examine the case to determine whether the act complained of was legal and proper and issue its decision within 60-90 days. These reconsideration decisions can be the subject of further appeals to the courts.

An explosion of trade mark PAR cases

Until late 2014, the PAR mechanism was seldom used in the trade marks arena. This changed with the advent of the amended Trade Mark Law of China.

The amended law imposed tight statutory time limits on the China Trademark Office (CTO) and on the Trade Mark Review and Adjudication Board (TRAB). To meet these time limits, the CTO began to dismiss applications and oppositions on seemingly trivial grounds (e.g. discrepancy between "Company Limited" and its abbreviated form "Co. Ltd."). The CTO has also begun to dismiss applications if proposed amendments to a description of goods/services are deemed "non-standard". Oppositions not supported by evidence at the date of filing have been dismissed even though the opponent is presumed to have three months to file evidence.

These arbitrary dismissals have fueled an explosion in the number of trade mark-related PAR cases. Statistics indicate that nearly 300 trade mark PAR cases were filed in the second half of 2014, which is triple the number for the whole of 2013. 50 per cent of cases concern dismissal of applications by the CTO.

Handling trade mark PAR cases

Trade mark-related PAR applications are directed to the State Administration for Industry and Commerce (SAIC), which sits just above the CTO and TRAB. In practice, cases are filed with the TRAB because the SAIC delegated this function in 2009. Some cynics might suggest that the TRAB reviewing TRAB decisions may not be ideal. The documentary burden on foreign applicants for PAR is heavy in that legalised documentation is required.

The TRAB has developed a soft approach to PAR cases. It will open informal discussions with the CTO and suggest the CTO voluntarily withdraw or revoke unlawful or unreasonable dismissals. If the CTO complies, the TRAB will ask an applicant to withdraw its PAR application to avoid embarrassment for the CTO. Otherwise, the TRAB will order the CTO to explain in writing the basis for its action and then issue a decision in 60-90 days to sustain or revoke the CTO dismissal notice. In 2014, about 70 per cent of PAR cases accepted by the TRAB were settled by mediation. This is six times the number of settlements achieved in 2013. It suggests that the CTO voluntarily withdrew or revoked about 70 per cent of the disputed dismissals. 30 per cent of cases proceeded to formal TRAB decisions, the majority of which were in favor of the CTO. Less than 2 per cent of the PAR decisions were appealed further to the courts for judicial review.

The PAR mechanism has proved an efficient and effective method of contesting arbitrary trade mark dismissals by the CTO. Nonetheless, it is important to note that it is only effective in addressing dismissals based on formal or procedural grounds. Substantive decisions made by the CTO during examination are not subject to the same review procedure. These decisions can be challenged using the normal procedures established by the Trade Mark Law.

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