Last November, the State Administration for Industry and Commerce, the authority that oversees both CTMO and TRAB, issued a notice saying that computer problems related to an upgrade which had plagued the back offices of both bodies had been fixed. According to some practitioners, the technical problems caused long delays for many key functions, including registrations, oppositions and notices. At least one noted that there was a period of several months without any notices or status updates on outstanding matters.
At the time the SAIC announced that the system was repaired, several practitioners said that they had begun receiving notices, though there were still kinks in the system. Two months later, however, despite some improvements, the accuracy of the information provided by the computer system is still in question.
“The CTMO’s public database is now more updated, with some applications being visible just a month or so after filing,” says Joe Simone of Simone IP Services in Hong Kong. “But we’ve found so many cases where data proved to be inaccurate, including marks indicated as rejected, approved, cancelled, when none of this proved to be true; it really limits the utility of online searches to issue spotting.”
Simone says that for important matters, his office must continue to contact the CTMO examiners directly for status updates, which can be a time-consuming process since there are no formal procedures for doing so.
A big burden
The examiners themselves have more to deal with than just phone calls from applicants. Due to the long period of relative inactivity stemming from the computer problems, the CTMO has now a considerable backlog, including for applications and renewals. Though several practitioners say that the CTMO has informed them that they are making this backlog a priority, Edward Chatterton of DLA Piper in Hong Kong suggests some examiners may be relying on formality shortcomings to reject applications to help work through the backlog.
“In the past, the CTMO would accept copies of powers of attorneys when filing an opposition, even though technically original powers of attorney were required,” he explains. “However, recently, we have heard of cases where the CTMO has rejected oppositions that were filed without an original power of attorney.”
“Whilst this may help reduce the backlog, it is a very unsatisfactory situation for brand owners and emphasises the need to use counsel who are well connected in China and are up-to-speed with the ever-changing landscape.”
The backlog is also causing practical problems for rights owners. For example, Chatterton says that one of his clients, a large restaurant chain with a franchisee in China, had experienced delays in getting its trade marks renewed. Because of this, the franchisee could not close deals with sub-franchisees, who understandably required confirmation that the marks were renewed. He also says that the delay in renewal have affected some of his clients’ enforcement efforts, including a US company that had to put off an action until a renewal was processed.
“My advice is to file your renewals applications as early as possible, as it looks like the backlog will continue for some time to come,” he says.
Waiting for guidance
The delays at the CTMO and TRAB are also causing some concerns from practitioners who were eager to see the newest provisions of China’s Trademark Law put into practice. Though the new law is largely seen as a positive, many have said that, like most Chinese legislation, how the law is applied is arguably even more important than what the law actually says. One particular provision that rights holders have expressed reservations concerns the immediate registration of a mark that survives opposition proceedings. However, because of the computer system problems, a large backlog of oppositions has developed, and thus far there have been no reported instances of marks being registered after surviving an opposition under the new law.
