Recent decisions made by Beijing Intellectual Property Court and Beijing Higher People's Court have found that trademarks where the owner is deceased do not block subsequent marks.

There is this caveat: Later marks in such cases would not be blocked as long as the owner of the earlier mark terminated and the earlier mark has not been used for a sufficient time to avoid confusion between the two. The question remains on how much time is enough.

The decisions stem from a trademark administrative lawsuit between Beijing Exotropy Technology Co., Ltd. ("Exotropy") and the China Trademark Review and Adjudication Board (TRAB). The background of the case is this:

  • Trademark Filing: Exotropy filed a trademark application for "ET & Device" (Appn. No. 13397364) on October 21, 2013 before TMO, covering the goods "computer software, etc." in Class 9;
  • Refusal by TMO: On October 9, 2014, the trademark "ET & Device" was refused for registration in light of a prior similar mark "YITAI in Chinese characters, ET & Device" Registration No. 7085701, owned by Guangzhou Zhilin Market Development Co., Ltd. ("Zhilin").
  • Review on Refusal: Unsatisfied with TMO's refusal, Exotropy filed a review on refusal before TRAB. On June 12, 2015, TRAB sustained the TMO's refusal on grounds that the two marks were similar.
  • Appeal to Court: Exotropy appealed to Beijing Intellectual Property Court, this time submitting an official record proving the owner of the cited mark Zhilin had been terminated and deregistered as of August 18, 2010.

The Courts' Judgments and Reasoning:

  • First Instance of the Court's Trial: Beijing Intellectual Property Court ruled that because Zhilin no longer existed, and because the cited mark had not been in use for an extended period of time, it should not constitute any obstacle to the applicant's mark. In so ruling, the court overturned the TRAB's decision and remanded the case for re-examination.

TRAB then appealed to Beijing Higher People's Court, arguing that while Zhilin no longer existed, the cited mark was still valid and should block the applicant's mark. The TRAB further maintained that the official record confirming termination of Zhilin had not been presented during TRAB's hearing stage and should not be entered into evidence.

  • Second Instance of the Court's Trial: Beijing Higher People's Court upheld the judgment of the first instance, based on the following points:
  1. The court decided to accept the evidence proving termination of Zhilin to avoid unnecessary repetition of proceedings, and to finally settle the case;
  2. As the owner of the cited mark no longer existed, the cited mark has lost its value in terms of distinguishing the origin of goods. Therefore, the cited mark shall not hinder the registration of the applicant's mark.

Comments:

This case is likely to have an impact on trademark applicants in situations where a mark is blocked because of similar pre-existing marks where the owner is deceased.

Previously, an applicant under these circumstances would first have to take action to invalidate the cited mark, such as by filing a non-use cancellation. In practice, time may not allow for an applicant to cancel the prior mark before the case would be heard in court.

Now with both the Beijing Intellectual Property Court and the Beijing Higher People's Court ruling in favor of newer marks in this regard, applicants in similar situations can base their arguments on this new precedent.

Two additional points must be noted:

  • Zhilin terminated in 2010, so the influence of the trademark should have lapsed over time. But had Zhilin, in this case, been terminated only recently – say, less than a year – and the cited mark had been steadily used prior to termination, that mark may not be so easily disregarded. The key point to be determined is whether a cited mark has been out of the public eye long enough to avoid confusion between it and a subsequent mark.
  • In this case, the original mark had not been assigned or transferred to anyone else. Had it been, the court's judgment would most likely have been different, even if the assignment records had not been completed.