Judicial Application Of The Principle Of Full Review In Trademark Administrative Litigations

Specifically in trademark administration litigations, Rule 2 of the Rules of the Supreme People’s Court (“SPC”) about Several Issues concerning the Adjudication of Trademark Administrative Litigations (“SPC Rules”) stipulates that the people's court should generally determine the scope of reviewing the administrative behaviors related to trademark registration based on the plaintiff's claims and grounds. Where the Trademark Review and Adjudication Board’s (“TRAB”) decision is obviously improper, the people's court can review the relevant matter and make a judgment after examining the submission of all parties involved even if the plaintiff did not touch the matter. Under this rule, the people’s court may take the initiative to review the relevant matter beyond the plaintiff’s claims when the TRAB’s decision is obviously improper. According to the precedents of judicial review, the scope of full review conducted by the people’s court is not limited to the claims and grounds submitted at the review or litigation stage.

1. The people’s court may review any ground that was not considered in the disputed decision although asserted at the review stage

For the trademark invalidation dispute about the mark "鹿頭牌DEERBRAND and device"[1], the plaintiff of first instance petitioned for a review in accordance with the legal provisions including Article 44(1) of the PRC Trademark Law which was not commented by the defendant of first instance as a key point in the disputed decision. The plaintiff did not submit the provision of Article 44(1) in its complaint or during the first court hearing, nor did the parties submit any opinion on the provision of Article 44(1) during the first court hearing. Following the first court hearing, the court of first instance organized an in-court discussion and, upon the submissions of the parties on the provision of Article 44(1), made a judgment in accordance with the provision of Article 44(1) ordering the defendant to issue a new decision. The defendant filed an appeal on the ground that the court of first instance was in breach of the litigation principle of “no trial without complaint”. After ascertaining the facts, the court of second instance held that the disputed decision was somewhat reasonable to give a generalized response as the plaintiff of first instance failed to emphasize the provision of Article 44(1) separately. Meanwhile, the court of second instance pointed out that the court of first instance took the initiative to apply the provision of Article 44(1) in order to profitably resolve the dispute and the plaintiff’s mark was registered improperly by a third party through massive squatting and piracy. In view of this, the court of second instance decided that the conclusion of the first instance judgment was correct, and thus dismissed the defendant’s appeal.

2. The people’s court may examine any ground that was not supported although submitted at the review stage and commented in the disputed decision

For the trademark invalidation dispute about the mark “德百强DEBAIQIANG” [2], the third party of first instance submitted the provisions of Articles 13(3) and Article 44(1) of the PRC Trademark Law in its petition for review. The disputed decision declared that the disputed decision be invalid in accordance with the provision of Article 44(1). The plaintiff of first instance lodged a lawsuit only against Article 44(1) and had the support from the court of first instance. The third party and the defendant of first instance both filed an appeal. In the second instance, the court of second instance reviewed the findings of Articles 13(3) and Article 44(1) in the disputed decision and then made a judgment in accordance with the provision of Article 13(3). Based on this, the plaintiff of first instance filed a petition for retrial on the ground that the court of second instance’s finding of Article 13(3) was beyond the scope of its claims. However, the SPC supported the court of second instance’s full review. This case shows that the full review by the people’s court at the review stage on the principle of full review is conducive to upholding the disputed decision in which the conclusion is correct but the finding of facts or the application of law is detective in accordance with the applicable legal provisions. In this way, the dispute can be resolved and meanwhile the efficiency is improved by reducing the likelihood of recurrent litigations.

3. The people’s court may review as appropriate any ground which the parties did not submit at the review stage and then submitted during the litigation proceedings

For the trademark invalidation dispute about the mark “大姨妈” [3], the SPC fully reviewed whether the disputed mark complies with the absolute requirements for trademark registration or not, which was not submitted by the party at the review stage until the retrial. In this case, the retiral petitioner submitted in its petition for retrial for the first time that the disputed mark did not comply with the provision of Article 10(1)(viii) of the PRC Trademark Law, thus having adverse effects. The SPC held that on the principle of full review under Article 87 of the PRC Administrative Procedure Law and in accordance with the provisions of Rule 2 of the SPC Rules and Rule 120 of the SPC’s Interpretation on the Application of the Administrative Procedure Law, that is, at the retrial stage the people’s court should focus on the retrial claims and the legality of the disputed administrative behaviors, it was not in breach of the provisions of the abovementioned laws and judicial interpretation to examine whether the disputed mark has any adverse effect under Article 10(1)(viii) of the PRC Trademark Law at the review stage. Moreover, Article 10(1)(viii) of the Trademark Law sets forth the absolute requirements for trademark registration. Any registration of a trademark which does not satisfy the requirements under Article 10(1)(viii) shall be prohibited. In view of this, the SPC directly decided that the disputed trademark was inconsistent with Chinese cultural traditions, harmful to the public sentiment and women’s dignity, and contrary to the public order and good customs, thus being a sign detrimental to socialist morals and customs or having other bad influence, and shall be declared invalid.

Rule 52 of the Rules for Implementing the PRC Trademark Law (“Implementing Rules”) stipulates that for the review cases lodged by the party who was dissatisfied with the TRAB’s decision of rejection, the TRAB may take the initiative to consider the provisions of Articles 10, 11, 12 and 16(1) of the PRC Trademark Law upon examination of the submissions by the petitioner. Rule 52 of the Implementing Rules expressly grants the TRAB the power to initiatively consider the absolute requirements under Articles 10, 11, 12 and 16(1) of the Trademark Law in reviewing rejection decisions. However, Rules 53 and 54 of the Implementing Rules do not stipulate that the TRAB has the power to initiatively review the rejection or invalidation of trademark registration by initiatively taking the absolute requirements into consideration. This case is controversial due to the conflict with the requirement under Rule 54 of the Implementing Rules that the facts, grounds and claims provided by the parties in corresponding petition and response shall be examined in invalidation cases and whether any level of court was missed.

4. Initiative application of absolute grounds

In each case mentioned above, the full review was conducted on the basis of the claims submitted by the parties at the review or litigation stage. May the people’s court directly decide on the principle of full review that the disputed mark does not comply with any absolute requirements if such absolute requirement was not considered at the review stage? In the case where the registration of device mark applied by HUMMEL HOLDING A/S was rejected [4], the SPC held that the people’s court may do so only when whether the disputed mark does not comply with the provision of Article 30 of the PRC Trademark Law was at issue during the administrative and first-instance proceedings. The court of second instance’s initiative review of the distinctiveness of the disputed mark did not meet the condition that the TRAB’s relevant decision was obviously improper, although the court of second instance took both parties’ submissions into consideration. Firstly, the distinctiveness of the disputed mark was not considered at the review stage; secondly, the existing evidence shows that the plaintiff owned another device mark previously registered in the same class, and the disputed mark with similar and more complicated patterns was not obviously in lack of distinctiveness. Since the distinctiveness of the disputed mark was not considered during the review and first instance proceedings, the court of second instance was in breach of the procedure law by directly deciding the disputed mark to be inherently in lack of distinctiveness and meanwhile did not review whether the disputed mark obtains the distinctive through use. The second instance judgment should be corrected. In this case, the SPC did not support the court of second instance’s full review mainly because the court of second instance raised the distinctiveness issue in the absence of sufficient factual basis and did not meet the precondition that “the TRAB’s relevant decision is obviously improper” under Rule 2 of the SPC Rules. However, the SPC did not directly deny the court of second instance’s initiative application of the absolute requirements that were beyond the scope of the TRAB’s review.

In conclusion, according to the current judicial practice, the people’s court may conduct the full review no matter whether the grounds raised by the parties at the review stage is the cause of action claimed by the plaintiff in a trademark administrative litigation, even if the parties failed to raise the grounds until at the litigation stage; for the grounds that were not considered by the TRAB or the people’s court, although raised by the parties, the people’s court at higher level may conduct a full review as appropriate. Whether the full review is necessary should be determined mainly depending on the factors such as whether the parties’ claims were fully reviewed and whether the disputed decision was obviously improper in the finding of facts or in the application of law, so as to safeguard the rights and interests of the parties through judicial review. The trademark administrative review is different from other administrative behaviors. It contributes to the resolution of disputes between the parties (such as non-registration review, and invalidation) with impartial decisions. The full review is conducive to improving litigation efficiency, profitably resolving the disputes, addressing the issues raised by the parties as far as possible, and providing clear guidelines for subsequent administrative rulings so as to avoid repetitive litigations. For cases involving the absolute grounds, the trademark administrative review mainly serves the functions of managing the trademark administration, keeping the order of trademark registration, maintaining the public order and goods customs, and protecting of the interests of consumers. Meanwhile, the full review is helpful to unify the criteria of absolute requirements and make the administrative review standards consistent with the judicial review standards. However, there is the necessity to further study on the criteria of full review in judicial review, especially whether it is necessary to directly conduct the judicial review in the absence of administrative review when the absolute grounds are involved. The absolute grounds that were not raised by the parties at the review stage should generally be determined by the National Intellectual Property Administration. However, given the “大姨妈” case mentioned above, the possibility cannot be ruled out that the people’s court may directly decide whether the disputed mark does not comply with any absolute requirement for trademark registration.

[1] (2017) Jing Xing Zhong No. 3581

[2] (2020) Zui Gao Fa Xing Shen No. 1810

[3] (2019) Zui Gao Fa Xing Zai No. 238
     (2019) Zui Gao Fa Xing Zai No. 239
     (2019) Zui Gao Fa Xing Zai No. 240

[4] (2018) Zui Gao Fa Xing Zai No. 145