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Summary and analysis of administrative litigations of trademark adjudication cases in 2018 (Excerpt)

I. Basic situation of responses to litigations (as defendant) in 2018

In 2018, the trademark adjudication department decided a total of 265,200 cases, and received 11,510 notices for response to the first-instance litigations in the whole year. The number of responses to the first-instance litigations accounted for 4.34% of the total number of decided cases, down 1.2 percentage points from last year. In 2018, 4,120 notices for response to the second instance litigations were received, and 420 cases were entered into the retrial hearing procedures or retrial procedures at Supreme People's Court and Beijing Higher People's Court. In 2018, the trademark adjudication department received a total of 10,633 first instance judgments (including 561 rulings), of which 2,840 were lost, and among them 1,205 cases were lost due to change of situation, accounting for 42.4% of the total number of the lost cases. Excluding the cases lost due to change of situation, the actual losing rate of first instance litigations was 15.4%; a total of 3,732 judgments (including 67 rulings) were received from the second instance court, of which 1,243 were lost, and among them 350 cases were lost due to change of situation; in 2018, a total number of 354 retrial court judgments and rulings was received, including 35 cases involving change of situation.

II. Main features

1.The total number of responses to litigations in respect to trademark adjudication cases continued to grow, and the proportion of responses to litigations remained stable with a slight decline.

In 2018, the total number of responses to first instance litigations exceeded10,000 for the first time, with an increase of more than 2,000 pieces over last year, which continued the consistent growth trend, but the proportion of responses  remained stable with a slight decline. According to the data of the past three years, the number of adjudication cases has increased significantly for three consecutive years, but the proportion of responses to litigations has basically stabilized at around 5%, and about 95% of the cases have been resolved in the adjudication procedure. This fully demonstrates that the adjudication procedure takes into account both efficiency and fairness and plays an important role in resolving disputes over trademark right granting and verification. It also shows that the administrative authorities and the judiciary authorities have increasingly formed consensus on certain major legal issues, and the involved parties form a stable expectation to the result of the case and thus accept the adjudication decision. The following is a list of responses to the first instance litigations in respect to adjudication cases in the years from 2016-2018: 
Year Number of rulings (10 thousand) Number of responses to litigations (10 thousand) Proportion of responses to litigations
2016 12.52 0.53 4.27%
2017 16.89 0.93 5.5%
2019 26.52 1.15 4.3%

2. A significant difference in the proportion of losing cases in different types of cases

For the 10,633 first instance judgments received in 2018, we counted the losing rate  of various types of cases, of which the total number of lost cases in respect to refusal of trademark applications was relatively higher, but mostly the loss was due to change of situation and the actual losing rate for this type of cases was only 7.5 %. The number of cases of disapproval of registration application  (including appeal of opposition) was much less than other types of complex cases. Considering the trademarks failed to get registration through both the opposition and appeal procedure, the involved parties would have been less willing to file litigation, so the litigations corresponding to this type were less, and the actual losing rate was also less than 10%. The actual losing rate of the invalidation and the appeal of non-use cancellation cases, which are two types of complex cases, are much higher, and the latter one was even close to 30%. Even if some cases were lost because of new evidence, the majority of losing cases still show the difference between the administrative and judicial organs in the determination of certain facts and the application of laws. It is necessary to sort out and analyze the differences in order to further unify understanding and improve adjudication of administrative cases concerning granting and verification of trademark right. The following is the classified statistic of the first instance judgments in 2018:
Type of cases Number of judgments Number of Lost cases (Number of Lost cases caused by the change of situation) Losing Rate (losing rate excluding the lost cases caused by change of situation)
Appeal of refusal of trademark application 5870 1625(1186) 27.7% (7.5%)
Appeal of disapproval of application  (including appeal of opposition) 303 33(5) 10.9% (9.2%)
Invalidation 3274 828(14) 25.3% (24.9%)
Appeal of non-use cancellation 1186 354(0) 29.8% (29.8%)
3.The change of situation has become the main reason for losing the cases, and the proportion of reasons for losing the cases has changed significantly.

For the statistics of the losing first instance cases, the proportion of the main reasons for losing in 2018 and the corresponding situation in 2017 are shown in the following table:
Reason for losing 2018 2017
Change of situation 42.4% 28.4%
Trademark similarity 16.2% 21.1%
Goods similarity goods 6.2% 5.4%
Problem of non-use for three consecutive years 13% 12.6%
Famous trademark 3.9% 2.3%
Distinctiveness 2.5% 6.8%
Procedure and other issues 2.5% 3.9%
Prior right 2.6% 2.4%
Registration through deceptive or other unfair means 3.3% 1.7%
Article 10(1)(vii) 1.8% 1.9%
Article 10(1)(viii) “Unhealthy influence ” 1% 5.4%
Pre-emptive registration of a prior trademark that has been used earlier and obtained certain popularity 1.1% 1.2%
As can be seen from the above table, the proportion of reasons for lost cases in 2018 due to change of situation, determination on similarity of goods, determination on  trademark use evidence, famous trademark, and “registration through other unfair means” under Article 44(1), has increased significantly. However, the proportion of reasons for lost cases due to determination on similarity of trademarks, unhealthy influence, distinctiveness and procedure issue has dropped significantly. The proportion of other reasons is basically the same as last year.

Date: September 3rd, 2019
Source: Chinese Trademark Magazine
Author’s affiliation: Department of Litigation Response and Review,
Trademark Office, CNIPA
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