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China Trademark Practice – A Letter of Consent

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When trademark applicants/owners receive refusal of their trademark applications due to prior similar mark(s) flagged by the examiner, how can the applicants overcome the citation(s) by way of filing an application for review of the refusal with the China Intellectual Property Administration (“CNIPA”), in order to eventually have the applied-for mark approved for registration?  

To overcome the citation(s) in the review proceedings, apart from arguing against the similarities between the respective marks, it will be very helpful to overcome the prior similar mark(s) by way of submitting  a letter of consent (“LoC”) issued by the cited owner of the prior similar mark(s) agreeing on the use and registration of the applied-for mark in China, which is alternatively is called “co-existence agreement” in China. 

We would like to share with you our views of the functions and practice of the LoC/co-existence agreement in China.

RELEVANT LAW/RULES/GUIDELINES

The PRC Trademark Law does not have specifical content and definition about LoC or co-existence agreement.

Nevertheless, in the “Trademark Trial and Appeal Rules” issued by CNIPA, Article 8 shows the parties can reach settlement dealing with the trademark rights. This is regarded as a basis of the LoC.

  • Article 8 During the trademark review and hearing, a party shall have the right to, in accordance with the law, dispose of his own trademark right and the rights in connection with the trademark review and hearing. On the premise of considering public interests and the third-party rights, both parties concerned may reach a reconciliation agreement in written form, and the Trademark Review and Hearing Board may also hold mediations in this regard.

In addition, in the “2019 – Beijing High People’s Court Guidelines for the Trial of Trademark Right Granting and Verification Cases“ issued by the Beijing High People’s Court, the following three Articles are in relation to the nature, formalities, and legal effects of LoC:

  • 15.10 When determining whether the respective marks are similar, a LoC could be prima facie evidence to obviate the confusion of the marks.
  • 15.11 The LoC must be issued in written form by the cited owner specifying particulars of the applied-for mark and agreeing on use and registration of the applied-for mark. The LoC cannot have any condition and time limitation, otherwise, it shall not be accepted.

         The LoC shall be genuine, legal, and valid, and not harm the interests of the state, the public and the third party, otherwise the LoC shall not be accepted.

  • 15.12 If the respective marks are identical or substantially identical with each other, and their designated goods/services are identical or similar, the applied-for mark shall not be approved for registration based on the submitted LoC only.  

           If the respective marks are similar, their designated goods/services are identical or similar, and there is no evidence showing public confusion of the sources of goods/services caused by the marks’ co-existence, the respective marks shall be considered dissimilar under the LoC submitted.

OUR COMMENT

In accordance with the above-mentioned relevant Rules and Guidelines and the practice below, similar to other countries/jurisdictions like the U.S. and Hong Kong, the examiner at CNIPA, in particular the judge at the Courts tends to withdraw the citation(s) and approves the registration of the applied-for mark, if a LoC is submitted either in review proceedings or in Court proceedings. 

To illustrate the acceptance of the LoC, we set out some landmark precedents in the table below for your reference:

Table to illustrate the acceptance of the LoC

In conclusion, we have successfully overcome prior marks by way of submitting LoCs. Despite the fact that China adopts case-by-case principle and precedents are not binding in China, based on the current practices, we believe that a LoC will be very helpful to overcome the prior similar mark(s). Although the examiner/judge has her/his discretion whether to accept a LoC based on the possibilities of confusion, there is a good chance that they will withdraw the citation(s) if the LoC is submitted; unless the marks are too similar, and the goods/services are identical.

One point to note is that the LoC must be notarized, if the cited owner is a foreign company/individual, the notarized LoC must be legalized by the local Chinese Consulate. 

If you have any questions in relation to the LoC and/or protection of your trademark in China, please feel free to contact please contact evelyne.yeung@oln-law.com or angel.luo@oln-law.com,. We are happy to assist you in the matter, e.g. assessing the chance of acceptance of the LoC, approaching the cited owner for a LoC, preparing a LoC that is acceptable by CNIPA/Court, submitting the notarized and legalized LoC to CNIPA/Court, and requesting the examiner/judge in charge of the case to accept the LoC and approve your applied-mark for registration.   

Oldham, Li & Nie Launches Document Automation Platform

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Oldham, Li & Nie Solicitors OLN, a leading Hong Kong law firm, announced today its partnership with Zegal for the launch of OLN online: www.oln-online.com , a cloud based document automation platform, powered by Zegal. The platform, which is the first to be introduced by a Hong Kong law firm, provides its clients and its lawyers with seamless solutions and instant access to a wide range of legal documents, 24/7, remotely, with online support from OLN’s professionals.

The platform offers a documentary archive and other resources for various practice areas, instantly accessible by clients to generate time-critical transactional documents with ease, when and where such need arises.

Gordon Oldham, Senior Partner of OLN said: “The legal profession has been slow to embrace technology. Our new platform and a number of other client communication technology tools and resources we are introducing acknowledge the changing landscape of what professionals and their clients want and their need to communicate and collaborate. OLN online is designed for the provision of better service to Clients and efficiency of work for OLN lawyers and support teams.”

Hung-Chou Tai, CEO of Zegal said: “We are extremely excited to be working with OLN to launch the first truly digital “Law as a Service” offering in Hong Kong. The OLN online platform will allow an unprecedented level of customer service and convenience with consistent quality. Companies in Hong Kong will now have access to their legal partners anywhere and at any time.”

Oldham, Li & Nie Solicitors was founded in 1987 with offices in Hong Kong and Shanghai with a business-centric practice in:  

•    Corporate and Commercial;
•    Dispute Resolution;
•    Tax and Business Advisory;
•    Insolvency & Restructuring;
•    Intellectual Property;
•    Insurance; 
•    Private Client Services; and
•    Family law, Trusts and Succession.

OLN has consistently been ranked as a top tier Hong Kong law firm by Chambers Asia Pacific and Legal 500 Asia Pacific. For more details, please visit https://oln-law.com.

Media Contact:
Oldham, Li & Nie Marketing Team
Ruby Ng, (852) 2868 0696 
marketing.oln@oln-law.com
 

OLN Nominated for Six Awards in the ALB Hong Kong Law Awards 2020

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Oldham, Li & Nie is pleased to be shortlisted as finalist in the following six categories:

Firm of the Year categories:-

  • Civil Litigation Law Firm of the Year 
  • Intellectual Property Law Firm of the Year
  • Labour and Employment Law Firm of the Year
  • Restructuring and Insolvency Law Firm of the Year

Congratulations to the teams! 

For more information, please visit the link here: https://www.legalbusinessonline.com/law-awards/alb-hong-kong-law-awards-2020?utm_source=ALB+ALL+-+Events&utm_campaign=aa8ef9ecfe-EMAIL_CAMPAIGN_2020_01_24_03_11_COPY_01&utm_medium=email&utm_term=0_c7f887c850-aa8ef9ecfe-55528184#edit-group-finalists

Collective Guilt?

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An article in the South China Morning Post (published in their This Week In Asia supplement on 19 September 2020) caught more than just my attention recently. In 2016, a 12-month baby was killed in Suining City located in China’s south-western Sichuan province while out with her mother being pushed in a pushchair. She was hit by a palm-sized metal ball – the kind used for hand exercises – dropped from a nearby apartment building. It killed her.

An investigation resulted, but failed to find the culprit. Unsurprisingly, no one would admit responsibility. Nevertheless, the family sued every household in the apartment building from which the metal ball could have been dropped or fallen from. The case eventually came to trial in the Chuanshan local district court which ruled that all households in the eight-story apartment building shared culpability and ordered them to pay damages jointly. 

Under Article 87 of the Liability Law, the presumption of guilt applied to disputes over liability arising from unidentified thrown or falling objects. The court found that unless the owner of the apartments in the building could prove that they were not at fault, they were presumed to be liable. 

Although only one person could have committed the offence, the judge said the law should protect the weak and should balance the interests of all parties, and this way achieve the purpose of compensating the victims and serve as a warning to the public. Each apartment owner in the building was fined 3,000 Yuan – a small price to pay for the actual culprit who faced a fine of hundreds of thousands of Yuan and up to a year in prison. Small wonder the other innocent apartment owners felt aggrieved.

The case received widespread publicity and comment from many Chinese Internet users. Whilst no one would deny that the family of the baby deserved compensation, it was felt to be patently unfair for innocent people to be held responsible and punished. Many blamed the police for failing to do their job properly – did they fingerprint the metal ball, did they search every apartment to look for the matching metal ball (they usually come in pairs), did they target the elderly who are believed to be particularly fond of using these type of balls as muscle relaxants, calm nerves, improve sleep and lower blood pressure? It was called second-rate justice by some and a cop-out by others.

To those in the West, the idea of punishing innocent people simply to ensure that the guilty are not immune from punishment, is an anathema. It brings to mind the kind of reprisals taken by the Nazis during the Second World War who would think nothing of executing an entire village just to ensure that the actual perpetrators of the murder of a German soldier did not get away scot free.  

But is it really so wrong and can it really be said to compare with heinous Nazi tactics? It is in the public interest that those who perpetrate crimes be held responsible for them. It is in the public interest that victims of crime should receive compensation. Perhaps judgment such as this will make building managers improve safety measures and exercise greater caution. 

After all, what is so wrong with a presumption of guilt in these circumstances. How many of those who were innocent attempted to prove their innocence? There must have been many occupiers who were out of their apartments or away at the time. There must have been many who had alibis and witnesses who could have testified to their never having owned or used such exercise balls, or never having seen such exercise balls in their apartment.

And from a legal perspective, presumptions of wrongdoing are often adopted in Hong Kong. The offence of misfeasance in public office is almost always proved against government civil servants simply by showing that they have too much money in their bank accounts than they could possibly have earned – the inference or presumption being that they have received bribes. In the United Kingdom, in any proceedings relating to the proceeds of crime, there is a presumption against the offender that the money or property in question is tainted unless the contrary is proved by the offender. 

These presumptions are for the public good. They benefit us all who suffer wrongdoing, whether as a society as a whole or as an individual. They benefit not just the parents of a 12-month-old baby whose lives will never be the same again, but us all.   

Globalaw Webinar Series: Can Hong Kong continue to be the financial hub of Asia?

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Key takeaways:

  • Hong Kong has a significant role to play in China’s Greater Bay Area master plan
  • Hong Kong’s demonstrated ability to bounce back from adversity should not be underestimated
  • the demonstrations in Hong Kong point to discontent with issues such as housing, youth unemployment and weak local leadership, issues that were not necessarily related to China
  • in the short term, investors and emigrants may be hedging their investments but will not make an immediate move out of Hong Kong
  • global geopolitical developments will be a bigger determinant with respect to long term prospects in Hong Kong as the US-Sino trade war has shifted global views
  • the National Security Law’s outcomes are still to be determined 
  • Hong Kong’s role as a financial hub of Asia remains secure as long as corporate governance, rule of law, free flow of capital are not eroded

Moderator and host: 
Mr Gordon Oldham, Senior Partner, Oldham Li & Nie*

Panelists:
Ms Connie Bolland – Founder and Chief Economist at Economic Research Analysis
Mr Peter Churchouse – Global economic and real estate expert, INED
Mr James Hartshorn, Asia Director for Bartra Capital Property Group
Professor Simon Shen – Associate Programme Director MGPE Programme, The Chinese University of Hong Kong

Topics discussed:
-the updated social, economic, political environment
-Hong Kong’s role in the Sino-US Trade War
-Hong Kong’s competitiveness as a global financial centre vis-a-vis competitors – Shanghai, Shenzhen, Tokyo and Singapore

Mr Oldham began the webinar by stating that while death and taxes have all been certainties, we now live with a third certainty, that of change, which has been accelerated by technology, climate change, and particularly in Hong Kong, demonstrations and the US-Sino trade war. Clients want to know what the future holds for Hong Kong.

Mr Oldham: 
Are Hong Kong, Shanghai, Shenzhen all part of a bigger, master plan? Should Hong Kong be getting closer to Shanghai and Shenzhen in order for all of us to grow bigger and brighter?

Mr Churchouse:
Certain aspects of private wealth may migrate but Hong Kong as a capital raising venue will only be enhanced with the expansion of the Greater Bay area. One should never underestimate the ability of China to deliver on its big policy initiatives such as the Special Economic Zone of Shenzhen. One should not underestimate the ability of Hong Kong to bounce back and move forward to the next phase. Forty years ago, Hong Kong had about 1 million workers in manufacturing; today only 200,000-300,000 work in manufacturing. Hong Kong has persevered through many cycles but can only grow if its rule of law, legal system, corporate governance and free flow of capital are not massively compromised. Certainly a triumvirate of stock exchanges very much like NYSE/Nasdaq/CME could emerge out of the Greater Bay area. PRC raisers of capital highly value Hong Kong’s free currency flows.

Ms Bolland:
Historically Hong Kong has done well, evolving from a manufacturing to a financial hub. However, the Global Financial Centres Index published by the China Development Institute has now ranked Hong Kong in 6th place after New York, London, Tokyo, Shanghai and Singapore and so we cannot say that Shanghai does not loom as a competitor. What we do enjoy in Hong Kong are trading and depth of capital from China and the rest of the world, good business development and human capital. While competition from Shanghai and Shenzhen does exist (especially with Shenzhen as a technology centre), Hong Kong is able to leverage tech companies coming to Hong Kong to be listed on its stock exchange. Singapore is very important to rising companies from Indonesia and Vietnam, and so is Tokyo which lists Japanese companies which are investing across the region. But yes, looking at Asia Pacific as a whole, Hong Kong is still a powerhouse and in a good position as part of a bigger pie story.

Mr Oldham: 
What is your view of the role of the Hong Kong Stock Exchange as part of this growing force in the Greater Bay region? Is there the possibility of a crisis of confidence that Hong Kong will no longer be independent?

Professor Shen:
As a native, I am pessimistic. China used the Singapore model (which worked when originally applied) as its blueprint but its responses have been harsher than anticipated by the rest of the world. People expected symbolic sanctions coming from the US but now a 2nd or even 3rd round of sanctions will be coming which will affect the Hong Kong economy and affiliated banks.

Financial markets and investors may no longer trust Hong Kong as being separate from China; they may turn to Tokyo but only in 4-5 years’ time, but certainly not overnight. Elections and global politics are long term issues but in the short term people may start to hedge. Right now it does appear that rules are diminishing. Since asset managers have choices, they may now be hedging and choosing other jurisdictions like Tokyo.

Mr Oldham:
The demonstrations in Hong Kong were frightening and violent, as well as upsetting for those living here. What were the reasons for the demonstrations?

Professor Shen:
The Pan Democrats have brought this situation upon themselves. But the government has failed to address livelihood/lifestyle conditions in Hong Kong. Housing affordability – one of the worst in the world – is one of the key issues. From 2009 there has been a 280% rise in housing while wages and salaries have not followed suit. Real incomes have actually gone down when adjusted for inflation. Education costs are high, healthcare is an issue as well. The population of Hong Kong has a right to expect basic economic and social living conditions.

Ms Bolland:
Agree, the demonstrations were propelled by the political choice of Chief Executive and not by the people’s choice, as laid down in the Basic Law. The Pan Democrats are to blame while at the same time, the government was not willing to introduce reform. Government mismanagement also failed to bring the parties together to engage in meaningful dialogue.

People are living in cage homes because of housing prices but add youth unemployment as a significant problem. While there is 6% unemployment for the general population, there is currently over 10% unemployment for youth; these are well educated people with aspirations to join society. The big failure has been the government sitting on its hands for decades while loads of immigrants have arrived. Two million people have been added to the population since 1997. Hence, people are unhappy. Tourism may be a reason for the economy bouncing back from the 2003 SARS crisis but the result has been people being squeezed out of shopping malls just to buy daily necessities. All this discontent burst as a result of far greater malaise in society.

Mr Oldham:
In 40 years here, there has never been a more inept, uncreative, unimaginative government. One of the most beautiful waterfronts in the world has become a mass of roads, highways and traffic. The Chief Executive has admitted she is but an administrator. One hopes that the government can do something. What are your thoughts on this?

Professor Shen:
The demonstrations were a result of the basic issues that Mr Churchouse just discussed. We all share concerns about the government. People expect “one country, two systems” but a slightly different version has evolved in Hong Kong as the central government has become increasingly confident. I remember clearly when the Olympics were held in Beijing in 2008, Hong Kongers were proud to be identified as Chinese. A significant difference in opinion has now emerged in Hong Kong. In fact tensions were not originally as significant but the government did nothing and gradually demonstrations came from the middle class and from students, not people living in cage homes. These are highly educated people (including those who graduated from universities abroad) who are not directly affected by the housing crisis. Housing is a serious issue but the demonstrations mixed everyone in society together. I would venture to say that even blue ribbon supporters (Ed note: pro police) are not happy about the national security law (“NSL”).

Mr Oldham:
The NSL has not been interpreted yet so it is still early in the day. By and large our government was given the opportunity from 1997 and it tried half heartedly or “fool hardily” but has achieved nothing so China took action to enact the law. Doesn’t every country have concerns about terrorism and seccession? 

Professor Shen:
Colonial security laws existed in the past and today other countries also have their national security laws. The main issue is the NSL was imposed by Beijing after Hong Kong failed to enact such a law for 23 years, post 1997. The outcome has been beyond the expectations of even pro government supporters here. Colleagues anywhere in the world, whether in the US or UK, now have to take appropriate precautions. The wording in the NSL is also an issue – what we can and cannot do has not been crystallized. Random individual behaviours can be prosecuted because the scope of tolerance or when we cross the red line – has not been revealed in the law. Hopefully in 1-2 years’ time, we will know.

Mr Oldham:
People want certainty and vote with their feet. In the run-up to 1997, Hong Kongers went to Vancouver but 99% eventually came back. The only result was that the price of Vancouver housing skyrocketed. Will there be a difference this time?

Mr Hartshorn:
Yes there’s certainly been a spike in immigration to other countries but only a small percentage of people are actually moving. For example, we found that only 20 out of 300 people with immigrant visas actually moved. People see emigration as a safety mechanism, a backup plan. There have been three major emigration spikes in modern history – post Tiananmen Square, pre handover in 1997 and now. At the peak in May 2020, it was discovered there were 41,000 online searches for the word “immigration”. We have had 50 clients from Hong Kong immigrating to Ireland and Ireland would be one of the lesser known destinations (with Canada being the most well known). People are taking a “wait and see” attitude regarding the final UK policy regarding British National Overseas (“BNO”) passports – will people be allowed to live in the UK for 6 months or longer? How many will actually go ahead – all this is uncertain.

Mr Oldham:
The majority of listeners today are lawyers and their clients with transactions or funds in Hong Kong – should they be worried? 

Ms Bolland:
In a recent study by the American Chamber of Commerce, 77% of 180 companies surveyed were concerned about the NSL because of its amigiuity. Therefore concerns are there although not many people will leave immediately. Of those surveyed, 53% have contingency plans while for the long term, 66% hold pessimistic views.

Professor Shen:
There has been a lot of talk about people leaving Hong Kong but white collar salary levels are high here and it is hard to leave. Many workers prefer to send their wives and children to second homes abroad while they stay in Hong Kong to work – this pattern will continue. Some investments will be made overseas but workers will stay in Hong Kong for at least two to three years without feeling the need to move immediately. The Chinese government will try to engage international investors to invest in Hong Kong. In my view, we are close to a “one country, one system” model so in the short term, Beijing will try to engage Chinese companies to come to Hong Kong to get listed, thus providing American investment bankers here with jobs. The major uncertainty is really the global geopolitical situation. Will decoupling be a reality? How will decoupling transpire? Sino-US relations have passed the point of no return; in the previous decade, Chinese firms invested heavily in the US. We must observe global politics for longer term trends.

Mr Oldham:
As if the demonstrations, COVID-19 and the NSL were not enough, we now have the Sino-US trade war to contend with because we are no longer recognised as separate from China. What is Hong Kong’s role in all this?

Mr Churchouse:
It has been interesting to watch. Yes, it all started with the US and Donald Trump but the Europeans are all joining the battle against China. China’s unfair trade practices and not behaving in line with WTO expectations are legendary. Trump has brought focus on this to the fore and the entire world has now got behind the Americans. The European Council came out this week with a scathing paper attacking China trade policies – this has nothing to do with the US. Whether or not China is going to act, Hong Kong is caught in the middle as a victim, even though Hong Kong operates as a free trade center. Whoever gets in or refuses to get out of the White House – we shall see how this affects US-China relations.

Mr Oldham:
Isn’t it a rather simplistic view if you believe you can’t do anything in Hong Kong as Big Brother is always telling you what to do? Beijing could well say, Hong Kong has its 3 bowls of rice already. Don’t blame us as we have never interfered in Hong Kong matters, not even during the most violent demonstrations in Hong Kong. We should do something here in Hong Kong to give people hope and a bright future.

Mr Churchouse:
It would be great to see Hong Kong leaders demonstrate some leadership. The NSL came about because China said, you children can’t organize your own playground so you need an adult to fix things. Perhaps they had a good point.

Professor Shen:
The importance of Hong Kong to China has been underestimated, not necessarily in GDP but rather, there is still no substitute for Hong Kong as a foreign exchange intermediary. This is still irreplaceable. Hong Kong can still play a significant role if we have better government. Hong Kong and its people overseas are wealthy and connected and are able to build a second economy to sustain the economy of Hong Kong. Hong Kong’s long term prospects are still there. 

Ms Bolland:
Hong Kong must ensure capital markets remain free and open with a firmly entrenched rule of law. These are two distinguishing features along with corporate governance which will stop Hong Kong’s role from eroding. During the 1967 riots in Hong Kong, I was a little girl seeing machine guns on rooftops.  After the riots, Governor Maclehose completely reformed Hong Kong’s infrastructure and healthcare system to improve people’s livelihoods. The Cross Harbour Tunnel was a direct product of that era. Have we got anything to offer right how – leaders need to think and to lead with innovative ideas.

Mr Hartshorn:
In the past there has been talk of Shanghai replacing Hong Kong – this won’t happen. Hong Kong enjoys the rule of law and a free press. As it stands, there will not be any removal or change in capital controls. Hong Kong is not going anywhere in terms of its enviable financial position.

Mr Oldham:
We have rapidly run out of time for this webinar. We shall see plans of the North as they are unveiled to us. They have pragmatic, patient plans – look at pollution, for example. Beijing is now undergoing the biggest cleanup of its air. I recall an old adage that states, the quickest way to bankruptcy court is to listen to the advice of experts. Hence the purpose of this webinar was not to give answers but to give listeners some deeper background to make commercial decisions. Thank you to all the panelists today.

*Oldham, Li & Nie is a Hong Kong-based law firm of 40 lawyers with offices in Shanghai. It is a  founding member of Globalaw, a leading global network created in 1994 for providing personalized legal services and comprising 110 firms in 85 different jurisdictions.