Trade mark applications in China: new approach to letters of consent to note

In this blog we discuss some very recent and very significant changes in China to the treatment of letters of consent in overcoming objections to the registration of trade marks.

Background
 
For a long time, we have advised clients that letters of consent would be constructive to overcome objections caused by similar marks in the Review on refusal proceedings.  The China Trade Mark Office used to be very cautious in considering and accepting a letter of consent in such cases.  However, in the past decade more and more marks have been allowed to be registered by submitting a letter of consent.   The criterion of the Trade Mark Office in accepting a letter of consent has also become more applicant-friendly.  In the beginning, the letter of consent would only be allowed where the marks had differences.  After Google's Nexus case, the Trade Mark Office even agreed to accept a letter of consent for identical marks in more cases. 
 
Google's Nexus case
 
Google Inc. applied for the trade mark "nexus" under No. 11709161 in class 9 (laptop computers). The mark was blocked by Shimano Inc.'s prior trade mark NEXUS under Reg. No. 1465863 in class 9 (bicycle computer).  Google submitted a letter of consent issued by Shimano to overcome the citation; however, the TRAB and two instance courts refused to grant the registration. The mark finally got approved through a retrial by the Supreme Court in December 2016.
 
Recent developments
 
A few weeks ago, many trade mark attorneys started receiving surprising decisions in their Review of refusal cases. The letter of consent submitted had not been considered and accepted in their Reviews on refusal cases, including those issued by the associated companies.  According to an unofficial resource, the China Trade Mark Office has changed its attitude to the validity of the letter of consent after an internal meeting. 
 
Although we learned that the China Trade Mark Office was not saying that no letter of consent will be considered, it appears their new approach is quite considerably different from previous practice. 
 
We also received an unfavourable decision in mid-September in a case we had optimistically predicted the outcome as a mark with a similar situation had been allowed to proceed to registration by submitting letters of consent.  The decision stated that "in addition to protecting prior trademarks and avoiding conflicts of trademark rights, the legislative purpose of Article 30 of the Trademark Law should also protect the interests of consumers, that is, to prevent identical or similar trademarks from appearing in the market and causing consumer confusion". 
 
We also note from several recent judgments issued by the Beijing High Court that the applicants were unsuccessful in obtaining their registrations by submitting a letter of consent.  
 
For example, Volkswagen Aktiengesellschaft filed a court appeal for its application No. 30191626 for TAYRON in class 12, relying on a letter of consent issued by the owner of the cited mark TYRON.  In the judgment made towards the end of August, the Beijing High Court held that as there is only one letter difference between the two marks, the letter of consent is insufficient to avoid the likelihood of confusion that it might cause to the public.
 
Comment and proposed action
 
Although the official guidelines are not available, we can foresee from recent decisions and judgments that it will be more challenging to overcome a cited mark by submitting a letter of consent. To applicants with pending cases relying on letters of consent, we would highly suggest having a back-up strategy in advance.