{"id":4094,"date":"2021-12-15T15:57:00","date_gmt":"2021-12-15T07:57:00","guid":{"rendered":"https:\/\/east-ip.com\/?p=4094"},"modified":"2025-06-04T16:09:14","modified_gmt":"2025-06-04T08:09:14","slug":"update-on-trademark-consent-letters-in-the-prc","status":"publish","type":"post","link":"https:\/\/www.east-ip.com\/zh\/insights\/update-on-trademark-consent-letters-in-the-prc\/","title":{"rendered":"Update on Trademark Consent Letters in the PRC"},"content":{"rendered":"

Consent letters and coexistence agreements (referred to herein generally as \u201cconsent letters\u201d) are written instruments issued by a prior trademark owner or between two parties, allowing for coexistence and usually, simultaneous registration of identical or similar trademarks for use on identical or similar products or services. This is a practical solution to address inevitable trademark conflicts, a solution deemed acceptable in most countries, subject of course to prevailing local requirements.<\/p>\n\n\n\n

For much of the last 20 years or so, though, consent letters were a non-starter in China, given little to no weight by People\u2019s Republic of China (\u201cPRC\u201d) trademark authorities. However, this practice had begun to shift significantly over the last 5-10 years. Indeed, and until recently, the acceptance of consent letters by PRC trademark authorities to resolve similarity disputes was becoming ever more common.<\/p>\n\n\n\n

All that changed recently, with the PRC Trademark Review and Adjudication (\u201cTRAD\u201d) \u2013 the entity with initial responsibility for reviewing consent letters provided in respect of refused trademark applications \u2013 unilaterally deciding that it would no longer consider consent letters to resolve similarity conflicts. Instead, brand owners will now most likely be forced to file court appeals of TRAD decisions involving consent letters.<\/p>\n\n\n\n

This update discusses the practical aspects of consent letters in PRC trademark practice, examines their history in Chinese trademark matters and considers the implications of the TRAD\u2019s recent decision to reject such letters in most circumstances.<\/p>\n\n\n\n

The PRC Trademark Law\u2019s Overarching Purpose: Protection of the Public Interest<\/h2>\n\n\n\n

Under the PRC Trademark Law, and while the rights and interests of brand owners are important, the overriding interest is inevitably the protection of the socialist market order and of the rights and interests of consumers.1<\/a><\/sup> Given that, and when analysing the propriety of consent letters under the PRC Trademark Law, strong consideration must always be given to ensuring that if consent letters are permitted, consumers are protected and confusion is avoided.<\/p>\n\n\n\n

Generally speaking, where a conflict involves an application for a mark similar to a prior mark for use on similar goods or services, the PRC Trademark Law assumes a tangible risk of consumer confusion. To overcome that assumption, consent letters invariably contain an acknowledgement by the prior rights\u2019 owner that coexistence of the marks in question will not create a risk of confusion amongst PRC consumers. Logically, that acknowledgement would appear worthy of significant deference, where the owner of the earlier right has a direct stake in the issue, and presumably, a keen understanding of its own customers. Whilst this is likely most often a reliable premise, from the perspective of PRC trademark authorities and the courts, that acknowledgement has seldom been the end of the story. This is particularly the case in regard to extremely similar or virtually identical marks.<\/p>\n\n\n\n

As well, public interest issues have generally overridden brand owner consents in respect of marks used in the area of the pharmaceutical industry (Class 5) and other areas impacting public health. Chinese authorities have been extremely reluctant to allow coexistence of similar marks in respect of such goods. For example, based on a prior trademark registration for \u201cVECTAVIR\u201d that was designated to be used on antiviral medicine, the TRAD refused an application for \u201cVENTAVIS\u201d, applied for to be used medicines to treat pulmonary hypertension.2<\/a><\/sup> In another case involving bandages in Class 10, courts refused coexistence of marks bearing different designs on the ground of public health concern.3<\/a><\/sup> Both decisions were supported by courts in administrative lawsuits against the TRAD. Below is a comparison of the two marks at issue.<\/p>\n\n\n\n

Applied-for mark<\/strong><\/th>Cited mark<\/strong><\/th><\/tr><\/thead>
\"Image<\/td>\"Image<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Practical Considerations for PRC Trademark Consent Letters<\/h2>\n\n\n\n

In China, consent letters have never been of any utility in the PRC Trademark Office (\u201cTMO\u201d)\u2019s initial trademark examination. The examination process is mostly a black box, with little to no contact with examiners available prior to the TMO approving or rejecting a given application, including due to the citation of prior similar marks. As a result, consent letters could only ever really be considered after a TMO rejection has been issued.<\/p>\n\n\n\n

During appeals of those rejections, heard by the TRAD in the first instance, consent letters had become a very reliable means of overcoming similar-mark rejections. Indeed, and unless the two marks at issue were nearly identical, acceptance of consent letters by the TRAD (and courts hearing appeals of TRAD cases involving consents) had become de rigueur. Interestingly, and perhaps due to their relatively recent introduction in PRC trademark practice, Chinese rights owners have usually been incredibly sceptical of consent requests, either rejecting them outright or demanding exorbitant fees if any consent was given.<\/p>\n\n\n\n

Although not a requirement for matters reviewed by the TRAD, which is an administrative-level body, the \u201cbest practice\u201d for consent letters issued by foreign brand owners (and really, any evidence that may end up being reviewed by a PRC court) is to have them legalised and notarised. This ensures their admissibility in the event the TRAD\u2019s decision needs to be appealed to the PRC courts, such as the Beijing IP Court (\u201cBIPC\u201d, the current first-instance court for trademark reviews), where evidentiary standards on foreign-sourced evidence require a higher degree of formality.<\/p>\n\n\n\n

The first step in this process is the execution of the consent letter in the presence of a competent notary in the home country of the party granting consent by a competent representative of the brand owner. The notarised document is then authenticated by a competent authority in that country (such as the Department of Foreign Affairs and Trade in Australia or the State Department in the US), then by the Chinese embassy or a Chinese consulate in that same country. Recent experience suggests that foreign brand owners will typically need as long as six months to obtain notarised and legalised documents, with COVID issues causing significant delays in the processing of requests at Chinese embassies and consulates. These delays must be carefully considered in any appeals of TMO rejections, where the TRAD and courts almost invariably reject requests to suspend proceedings to await receipt of legalised\/notarised versions of consent letters in given appeals.<\/p>\n\n\n\n

A Brief History of Consent Letter Jurisprudence in PRC Trademark Law<\/h2>\n\n\n\n

The PRC Trademark Law and its accompanying regulations have never had any specific provisions recognising consent letters. Not surprisingly, then, and prior to 2005, consent letters were simply not a viable option to address conflicting marks in China. Instead, they were invariably entirely ignored by the Trademark Review and Adjudication Board (\u201cTRAB\u201d, the TRAD\u2019s predecessor) and Chinese courts, regardless of how dissimilar the marks in question might be.<\/p>\n\n\n\n

That changed slightly in 2005, with amendments to the Rules for Trademark Review issued by the TRAB cracking open the door on consent letters by hinting at the possibility of \u201cinterested parties\u201d resolving trademark disputes between themselves. As a result, both the TRAB and the courts began to develop jurisprudence fleshing out this possibility.<\/p>\n\n\n\n

Early judicial cases examining the viability of such consents were not favourable, however. For example, in 2010, the Beijing First Intermediate Court (the first-instance court for trademark reviews at the time) opined that the registrability of a trademark was to be solely determined by the TMO and that the issues involved were simply not subject to resolution by the parties\u2019 \u201cself-discretion\u201d.4<\/a><\/sup><\/p>\n\n\n\n

In 2011, in a case later specifically referred to by the Supreme People\u2019s Court (\u201cSPC\u201d) in its annual intellectual property report involving two \u201cLiang Zi\u201d marks (see below for comparison), however, the SPC took the position that a coexistence agreement between interested parties could potentially impact the judicial review of a given trademark\u2019s registrability.5<\/a><\/sup> Following this SPC opinion, it became increasingly common for lower courts to consider consent letters as evidence in support of registrability.<\/p>\n\n\n\n

Applied-for mark<\/strong><\/th>Cited mark<\/strong><\/th><\/tr><\/thead>
\"Image\u201cLiang Zi (in stylized Chinese characters)\u201d<\/td>\"Image\u201cLiang Zi (in stylized Chinese characters) with design\u201d<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Then, in the landmark \u201cNEXUS\u201d case in 2016,6<\/a><\/sup> the SPC significantly relaxed the standard for assessing consent letters and their impact on determination of issues of trademark similarity and confusion. At issue was Google\u2019s plain-letter \u201cNEXUS\u201d mark, filed for by it in 2012, for use on \u201cportable computers; handheld computers\u201d. It had been rejected on the basis of Shimano Inc.\u2019s own plain-letter NEXUS mark, registered in 1999 in respect of \u201ccomputers for use with bicycles\u201d. In the two initial appeals, Google had submitted a consent letter issued by Shimano. It had been rejected by both lower courts on the ground that the two marks were essentially identical, and that products designated by the two trademarks were also basically the same in terms of function, purpose, manufacturing departments, sales channel, and consumer group. In reviewing the issue of the consent letter, the SPC identified two conflicting issues:<\/p>\n\n\n\n