On August 30, 2013, China National People’s Congress enacted the amended Chinese Trademark Law, and the new Chinese Trademark Law shall come into effect as of May 1, 2014.
The current Chinese Trademark Law was enacted in 1982 and amended in 1993 and 2001 respectively. The first amendment in 1993 is mainly to accommodate China’s market economy system, the second amendment in 2001 is mainly to adapt to China’s accession to the WTO, and the third amendment in 2013 is mainly to implement the national intellectual property strategy. In this paper, we have sorted out the key amendments of new Chinese Trademark Law.
1. Time limitation is set for major matters of trademark prosecutions before Chinese Trademark Office (CTMO) and Trademark Review and Adjudication Board (TRAB).
For the first time, the new Chinese Trademark Law has set the time limitation for the following major matters of trademark prosecutions: 1) Preliminary examination for registration; 2) Rejection appeal; 3) Appeal against the CTMO invalidation decision regarding provisions of Article 10 (prohibition of using and registration as trademarks, such as name of country, deceptive signs, and geographical names well known to the public), Article 11 (lack of distinctiveness for two-dimensional marks), Article 12 (lack of distinctiveness for three-dimensional marks), or registration acquired by fraud or any other unfair means; 4) Cancellation based on generic names or three-year non-use; 5) Appeal against the CTMO cancelation decision; 6) Opposition; 7) Opposition appeal; and 8) Invalidation requested by the prior right holder or interested party. This provides a legal basis for the establishment of efficient trademark prosecution system. Trademark authorities (both the CTMO and the TRAB) have also attempted to accelerate trademark examination process by taking measures such as increasing personnel. However, as the amounts of trademark cases are hugely increasing, and trademark examination work is becoming more and more difficult, the public demand on shortening trademark prosecution periods also continues to increase.
In the new Chinese Trademark Law, three types of time limitations are set: 1) Nine Months; 2) Nine Months plus Three Months; and 3) Twelve Months plus Six Months.
1.1 Nine Months
According to Article 28 of the new Chinese Trademark Law, the CTMO shall complete the preliminary examination for registration within 9 months after the receipt of trademark applications. The trademark prosecution period has been shortened to the current 10 months from 2-3 years before 2009. This provision is in line with current practices.
1.2 Nine Months plus Three Months
According to the new Chinese Trademark Law, the CTMO / TRAB shall render the decisions within 9 months after the receipt of the requests for rejection appeal, invalidation appeal, non-use cancellation and/or generic terms cancellation. Additional 3 months may be extended under special circumstances.
1) Rejection appeal before the TRAB [Article 34]
2) Appeal against the CTMO invalidation decision before the TRAB regarding provisions of Article 10 (prohibition of using and registration as trademarks, such as name of country, deceptive signs, and geographical names well known to the public), Article 11 (lack of distinctiveness for two-dimensional marks), Article 12 (lack of distinctiveness for three-dimensional marks), or registration acquired by fraud or any other unfair means [Paragraph 2, Article 44]
3) Invalidation filed by third parties other than the CTMO regarding the same ground prescribed by Paragraph 2, Article 44 before the TRAB [Paragraph 3, Article 44]
4) Cancellation based on generic names filed by any one before the CTMO [Article 49]
5) Cancellation based on three-year non-use filed by any one before the CTMO [Article 49]
6) Appeal against the CTMO cancelation decision regarding the same ground prescribed by Article 49 before the TRAB regarding cancellation based on generic names or three-year non-use [Article 54]
1.3 Twelve Months plus Six Months
According to the new Chinese Trademark Law, the CTMO shall render the decisions regarding opposition within 12 months after expiration of gazette of preliminary approval. The TRAB shall render the decisions regarding opposition appeal and invalidation requested by the prior right holder or interested party within 12 months after the receipt of the requests. Additional 3 months may be extended under special circumstances.
1) For the opposition before the CTMO: the CTMO shall render the decisions regarding opposition within 12 months after expiration of gazette of preliminary approval. [Paragraph 1, Article 35].
2) For the opposition appeal and invalidation requested by the prior right holder or interested party before the TRAB: the TRAB shall render the decisions within 12 months after the receipt of the requests. [Article 35; Paragraph 2, Article 45]
Given that the above matters involve grounds based on private rights (except the opposition based on the public interests), which are more complicated, the time limitation thereof is set longer than other matters.
The challenge, though, is that the trademark prosecution period is shortened, while the number of trademark examiners remains the same, how to ensure the examination quality. For parties and agencies concerned, it is about how to deal with skyrocketing caseload.
2. Opposition and opposition appeal system is further optimized.
2.1 Qualification of the opponent is restricted in accordance to grounds of the opposition.
Different from the Chinese Trademark Law 2001, where any entity may file the opposition based on various grounds, the new Chinese Trademark Law distinguishes the qualification of the opponent based on the different grounds of the opposition. [Article 33]
1) On the one hand, as the opponent, the prior right holder or interested party may file the opposition based on their private rights for Paragraph 2 and 3 of Article 13 (well-known mark), Article 15 (fully aware trademarks with prior use of others based on contracts, business relationships or other relationships), Paragraph 1 of Article 16 (geographic indication), Article 30 (identical or similar to prior trademark registrations/ preliminarily approved marks on identical or similar goods/services), and Article 31 (identical or similar to prior marks with prior preliminary approval and gazette).
2) On the other hand, any entity (including the prior right holder or interested party) may, as the opponent, file the opposition based on the public interests for Article 10 (prohibition of using and registration as trademarks, such as name of country, deceptive signs, and geographical names well known to the public), Article 11 (lack of distinctiveness for two-dimensional marks), and Article 12 (lack of distinctiveness for three-dimensional marks).
First, the above distinction is clearer and more reasonable in jurisprudential logic. Second, to combine the qualification of the opponent with grounds of the opposition may curb malicious opposition to some extent.
2.2 Opposition appeal procedure is partially cancelled in favor of the opposed party.
Article 35 of the new Chinese Trademark Law partially cancelled the opposition appeal procedure in favor of the opposed party.
1) On the one hand, if the opposed party wins the opposition, the losing opponent is not entitled to initiating the opposition appeal procedure before the TRAB, and the opposed mark will obtain registration. Instead, the losing opponent may seek to file invalidation against the registered trademark before the TRAB. [Paragraph 2, Article 35] This limits the right of the opponent but also protects their right to seek remedy.
2) On the other hand, if the opposed party loses the opposition, it may still appeal to the TRAB via the opposition appeal procedure before the TRAB. [Paragraph 3, Article 35]
This provision appropriately streamlines administrative examination and approval procedures in favor of the opposed party. For the opponent, it shall pay attention to setting forth adequate grounds for opposition and providing sufficient evidence materials in opposition proceedings.
3. Well-known trademark protection system is further clarified.
3.1 Well-known trademark recognition is based on the request of the trademark right holder and a fact to be ascertained according to the necessity of the cases.
The well-known status of a trademark shall be recognized upon the request of the party concerned and shall be deemed as a fact to be ascertained according to the necessity of the trademark cases. [Paragraph 1, Article 14] According to the intent of well-known trademark legislative protection, well-known trademark recognition is based on findings of fact, rather than relatively stable or even immutable legal conclusions or judgments; well-known status of a trademark shall be recognized upon the request of the parties concerned, and trademark authorities shall not “ex officio” recognize the well-known trademark; well-known status of a trademark shall be recognized according to the necessity of the trademark cases, and the recognition procedure shall not be initiated necessarily when there are sufficient remedies under other laws and regulations. This provision clarifies the passive protection, necessity and fact-finding principles of well-known trademarks.
3.2 Types of cases involved and specific authorities governing well-known trademark recognition
The paragraph 2 to 4 of Article 14 of the new Chinese Trademark Law expressly prescribes types of trademark cases involved and specific authorities governing well-known mark recognition in the following five specific disputes:
1) Opposition: the CTMO [Paragraph 2, Article 14];
2) Complaint before the the local Administration for Industry and Commerce (AIC) for trademark infringement disputes: the CTMO (reported by the local AIC) [Paragraph 2, Article 14];
3) Trademark dispute cases (opposition appeal, invalidation requested by the prior right holder or any interested party): the TRAB [Paragraph 3, Article 14];
4) Trademark infringement civil lawsuit: Courts designated by China Supreme Court (which means only limited courts will have the jurisdiction on trademark infringement civil lawsuits involving well-known mark protection) [Paragraph 4, Article 14];
5) Trademark administrative lawsuits: Courts designated by China Supreme Court (Beijing First Intermediate Court as the first instance court, Beijing High Court as the second instance court) [Paragraph 4, Article 14]
3.3 Prohibition of using the wording “well-known trademark” for commercial activities
Paragraph 5, Article 14 of the new Chinese Trademark Law adds the provision that “producers and operators shall not use the wording ‘well-known trademark’ on the products, packages or containers, or advertising promotion, exhibitions and other business activities.”
The “well-known trademark” is a legal concept, rather than a commercial concept or honor. The new Chinese Trademark Law clarifies the properties of the well-known trademark and defines the use of the wording “well-known trademark,” which will effectively curb the abnormal business needs, and get the legal demand for the well-known trademark back on track.
4. Trademark protection is further strengthened.
4.1 Forms of trademark infringement are further clarified.
1) The new Chinese Trademark Law further clarifies the criteria of trademark confusion among the public and separates Article 52 of the Chinese Trademark Law 2001 into two items: A) to use a trademark that is identical with a registered trademark on identical goods; B) to use a trademark that is similar to a registered trademark on identical goods or to use an identical or similar trademark on similar goods, that is likely to cause confusion. [Item 1 and Item 2, Article 57]According to provisions of the TRIPs Agreement, for identical marks/signs on identical goods/services, it is assumed as confusion, without proof of confusion; for similar marks/signs on identical goods/services or identical marks/signs on similar goods/services, confusion needs to be established.
2) The new Chinese Trademark Law adopts existing provision of Item 2, Article 50 of Implementing Regulations of Chinese Trademark Law 2001 and further defines the nature of contributory infringement, by providing that the act of “intentionally providing and facilitating conditions for infringement and assisting others to carry on the infringement” shall be deemed as trademark infringement. [Item 6, Article 57]
4.2 Conflict between trade name and registered mark or unregistered well-known mark is regulated.
1) The new Chinese Trademark Law adds the provision that “use of the registered trademark or unregistered well-known marks of others as a trade name contained in the enterprise name, which misleads the public and constitutes as unfair competition, shall be ruled under the Chinese Anti-Unfair Competition Law.” [Article 58] This provision clearly defines the nature of such act, which converges with the Chinese Anti-Unfair Competition Law.
2) Article 43 of Implementing Regulations of Chinese Trademark Law 2001 has already prescribed the complaint with local company registration authorities for conflict between registration of the trade name (enterprise name) and the well-known trademark, which prescribes as follows: “where a trademark owner believes that another person has registered his well-known trademark as a trade name, which is likely to deceive, or mislead, the public, he may file an application with the competent authority for the registration of trade names for cancellation of the registration of the trade name. The competent authority for the registration of trade names shall handle the matter pursuant to the Regulations for the Administration of Registration of Trade Names.” However, the “competent authority for the registration of trade names” prescribed in this provision apparently does not include the AIC and the court provided in Chinese Anti-Unfair Competition Law. Article 58 of the new Chinese Trademark Law expands the scope of competent enforcement authorities for the above unfair competition act.
3) Item 1, Article 1 of China Supreme Court’s Interpretations on Issues regarding the Application of Law in Civil Cases Involving Trademark Disputes (which has binding effects on all courts in China) has prescribed that “the use of words identical or similar to another’s registered trademark as a trade name in a distinctive manner on identical or similar goods, and thus causing possible confusion among the relative public” constitutes as trademark infringement. The use of trade name defined in Article 58 of the new Chinese Trademark Law may be deemed as the use of complete enterprise name or non-prominent use of the trade name, which constitutes unfair competition.
4) The new Chinese Trademark Law does not cover the conflict between the trade name and the registered well-known trademark. Thus, further discussions and clarifications on this issue may be needed in future administrative regulations, judicial interpretations and practices.
4.3 Damages
1) Four ways and sequences of determining the damages are further clarified as follows: A) the actual losses of the rights holder; and then B) the infringer’s profits obtained from infringement; and then C) multiples of royalty fees; and then D) maximum statutory damages up to RMB 3 million (around US$ 490,000). [Paragraph 1, Article 63]
2) The maximum statutory damages are raised from RMB 500,000 (around US$ 81,000) to RMB 3 million (around US$ 490,000). [Paragraph 3, Article 63] Compared with the maximum statutory damages RMB 500,000 (around US$ 81,000) prescribed in the current Chinese Copyright Law and RMB 1,000,000 (around US$162,000) prescribed in the current Chinese Patent Law, the new Chinese Trademark Law will undoubtedly step up the fight against trademark infringement.
3) Punitive damages are adopted by the new Chinese Trademark Law. Article 63 of the new Chinese Trademark Law prescribes that “where serious circumstances of infringement of exclusive trademark rights in bad faith arise,” the amount of damages may be determined with no less than double but no more than triple the abovementioned amount according to Paragraph 1, Article 63 of the new Chinese Trademark Law.
4) The infringer is obliged to provide all available account books and data. Paragraph 2, Article 63 of the new Chinese Trademark Law adds the provision that “where the rights holder has provided all available evidence, while the infringement related account books, data are held by the infringer,” the court may order the infringer to provide the relevant account books and data; where the infringer refuses to provide or provided false account books and data, the court may reference the claims of the rights holder and the evidence provided in determining the amount of damage. This provision substantially strengthens evidence hinder system in civil lawsuit practices, and solves problems of “difficulty to prove” of trademark right holders to some extent.
5) The trademark registrant will not be awarded with damages if such registered mark is not in actual use. Paragraph 1, Article 64 of the new Chinese Trademark Law adds the provision that “in case the rights holder fails to provide the evidence showing that the trademark had been used in the three years prior to the action brought, and fails to prove any other losses suffered from the infringement, the infringer shall not bear any liability for damages.” This provision converges with the non-use cancellation system and will also crack down on cybersquatting behaviors.
4.4 Penalty in the administrative complaint is further strengthened and clarified.
Paragraph 2, Article 60 of the new Chinese Trademark Law further clarifies the criteria for administrative penalty for trademark infringement and increases the penalties.
1) The new Chinese Trademark Law has stepped up the fight against trademark infringement, and extended scope of tools to be seized or destroyed, which are used to manufacture infringing goods, forge registered trademark labels, by changing the wording into “the primary tools” from “specially used tools” prescribed in Chinese Trademark Law 2001.
2) The new Chinese Trademark Law has prescribed the specific amount of the fine.
3) The new Chinese Trademark Law has prescribed situations where severer penalties shall be imposed, that is, “where two or more repetitive trademark infringements were found within five years or where other serious circumstances were found, the infringer shall be heavily punished.”
4.5 Fair use defense and prior use defense are added.
1) Fair use defense. Paragraph 1, Article 59 of the new Chinese Trademark Law adopts the provision in Article 49 of Implementing Regulations of Chinese Trademark Law 2001, that is, others may duly use “the generic name, shape or model of the goods in respect of which it is used, or directly indicates the quality, main raw material, function, use, weight, quantity and other features of the goods, or a place name contained in a registered trademark.” Further, Paragraph 2, Article 59 of the new Chinese Trademark Law adds the fair use for “any shape derived from the goods itself, product shape required to obtain the technical effect, or shape that gives a substantive value to the goods contained in a three-dimensional registered trademark.” The fair use defense is an important trademark infringement defense, and it is frequently adopted in judicial judgments. This provision reflects the basic issues of trademark right limit system.
2) Prior use defense. Paragraph 3, Article 59 of the new Chinese Trademark Law adds the provision that “where prior to an application of trademark registration by a trademark registrant, others have been using identical or similar trademark on identical or similar goods prior to the trademark registrant, and such trademark has acquired certain influence, the trademark registrant shall have no right to prohibit said trademark user from continuing to use that trademark within the original scope of use, but may require it to attach additional appropriate distinctions.” This provision, in fact, affirms the prior use system of an unregistered trademark. Also, the protection precedents of prior use already exist in China’s practices. This provision will be helpful to achieve the balance between the interests of the prior user of an unregistered trademark and the registered trademark owner, reflect the value of trademark use, and curb trademark cybersquatting.
5. Good faith principle of trademark filing is emphasized and bad faith filing is to be further cracked down
5.1 Catch-all provision of the good faith principle is added in the new Chinese Trademark Law. Paragraph 1, Article 7 of the new Chinese Trademark Law prescribes as follows: “The application for registration and use of the mark shall comply with the principle of good faith.” The principle of good faith is a fundamental principle of civil activities, and is also the “Imperial Clause” of the Chinese Civil Law and Chinese Anti-Unfair Competition Law. However, there are still a large number of malicious cybersquatting acts, for which we cannot find the specific provision in the Chinese Trademark Law 2001 as a legal basis, thereby having to apply other legal clauses instead (for instance, “registration acquired by fraud or any other unfair means” prescribed in Paragraph 1, Article 41 of the Chinese Trademark Law 2001 and other unhealthy influence prescribed in Paragraph 1 (8), Article 10 of the Chinese Trademark Law 2001) This provision has solved the legal “vacancy” problem. However, the application issue of such catch-all provision has yet to be refined in other laws and regulations, and also subject to theoretical and practical exploration.
5.2 Hijacking of another party’s unregistered mark with prior use based on the ground that the applicant is aware of such prior mark because the applicant has contractual, business or other relationships with the other party is prohibited. Paragraph 2, Article 15 of the new Chinese Trademark Law adopts the provision that “where a trademark application is identical or similar to the other party’s unregistered trademark with prior use on the identical or similar goods, and where the applicant is aware of the existence of such other party’s trademark because the applicant has contractual, business or other relationships with the other party beyond that provided in the preceding paragraph, if such other party raises an opposition, the trademark shall be rejected for registration.” This provision requires that there should be sufficient evidence to prove that the applicant of the opposed mark “is aware of” the existence of such other party’s trademark, while does not require a certain reputation prescribed in Article 32 of the new Chinese Trademark Law, thereby increasing crackdown against cybersquatters.
5.3 Trademark agencies shall not accept the entrustment of new trademark application that falls into cybersquatting circumstances. Article 19 of the new Chinese Trademark Law provides that “trademark agencies shall not accept the entrustment if it knows or should know that the principal’s trademark application falls into circumstances prescribed under Article 15 and Article 32 of this Law.”
5.4 Other supporting measures are added. As mentioned above, Paragraph 1, Article 64 of the new Chinese Trademark Law clarifies the system of “non use no claim”, and Paragraph 3, Article 59 adds the prior use defense. These provisions effectively discourage those copycats or trademark trolls.
6. Regulations on trademark application and registration are enhanced.
6.1 Sound mark is accepted for registration. Article 8 of the new Chinese Trademark Law adopts the sound mark, and expands the scope of trademark protection. Further, the word “etc.” is added after the “sound,” which has provided the legal basis for Implementing Regulations of Chinese Trademark Law or other administrative regulations including other elements into the scope of trademark protection.
6.2 Signs identical or similar to the national anthem, military emblem, military song, names and symbols of the Central and State organs, etc. are prohibited from using and registered as trademarks. Paragraph 1(1), Article 10 of the new Chinese Trademark Law adds the “national anthem”, “military emblem”, “military song”, as well as “names and symbols of the Central and State organs.” Further, Paragraph 1(1)-(3), Article 10 of the new Chinese Trademark Law adds the word “etc.”
6.3 Deceptive signs which tend to mislead the public are prohibited from using and registered as trademarks. Paragraph 1(7), Article 10 of the new Chinese Trademark Law amends “having the nature of exaggeration and fraud” of the Chinese Trademark Law 2001 to read as follows: “having the nature of fraud, which tends to mislead the public on the characteristics of quality and the like or the origins of productions,” which clearly defines the meaning of signs “having the nature of fraud.”
6.4 Multi-classes registrations in one application are adopted. Paragraph 2, Article 22 of the new Chinese Trademark Law adds the provision of “multi-classes registrations in one application,” which is a major change in our trademark application system in line with international standards.
6.5 E-filings are adopted. Paragraph 3, Article 22 of the new Chinese Trademark Law adds the provision that “documents including trademark applications for registration may be filed in writing or by data telex.” This provision not only provides electronic filing of trademark registration, but also provides a legal basis for other trademark matters involving evidence in electronic form.
6.6 Examination opinion is adopted. Article 29 of the new Chinese Trademark Law adds the provision that “if the CTMO deems that the contents of an application for registration need explanation or amendment, it may request the applicant to produce thereof.” This provision will help enhance the quality of examination, and also provide convenience for the right holders.
6.7 Timeline for renewal formalities is advanced and prolonged. Article 40 of the new Chinese Trademark Law provides that application for renewal of the registration shall be made within TWELVE months before the expiration date, extended from six months prescribed in the Chinese Trademark Law 2001. This provision provides convenience for the right holders, and is also helpful for the convergence of trademark renewal with Customs recordation, trademark license recordation, and other systems.
6.8 Requirements for trademark assignment are clarified. Paragraph 2 and 3, Article 42 of the new Chinese Trademark Law adopts the provision of Paragraph 2 and 3, Article 25 of Implementing Regulations of Chinese Trademark Law 2001, that is, “the trademark registrant shall assign all identical or similar trademarks registered in identical or similar goods,” and “any application of an assignment of a registered trademark that tends to mislead the public or cause confusion or have adverse affects shall not be approved by the CTMO.”
6.9 Procedure and nature of license recordation is further clarified. Paragraph 3, Article 43 of the new Chinese Trademark Law clarifies that “the licensor shall record its trademark license with the CTMO,” and the “trademark license” may be understood as including materials to prove the license, not having to be the license agreement or the copy of license agreement. Further, Paragraph 3, Article 43 of the new Chinese Trademark Law adopts the provision in Article 19 of China Supreme Court’s Interpretations on Issues regarding the Application of Law in Civil Cases Involving Trademark Disputes, and provides that “trademark license that are not recorded with the CTMO cannot be used against the good faith use of the registered trademark by a third party,” which is helpful to protect the interests of a good faith third party.
7. Suspension of an action is added to review and invalidation cases by TRAB and trademark infringement cases by AICs.
To avoid conflicting decisions for the same or related cases, and save administrative and judicial resources, the new Chinese Trademark Law adds the provisions of suspension of action for review and invalidation cases handled by the TRAB as well as trademark infringement cases handled by the AICs.
1) According to Article 35 and Article 45 of the new Chinese Trademark Law, the TRAB may stay a review and invalidation case where a determination of prior rights involved is based on the decision of a case pending before the court or before the administrative authority. First, the suspension of an action prescribed in this Law will affect the prosecution and examination time frame. Second, this new Law does not involve the suspension of an action during the opposition procedure before the CTMO. We believe one of the goals for this new Law is to reduce trademark persecution time frame, which will inevitably be affected if the suspension of an action is added to the opposition cases by the CTMO.
2) According to Paragraph 3, Article 62 of the new Chinese Trademark Law, the AIC may suspend the investigation and handling of a trademark infringement, where disputes arise regarding trademark ownership or the rights holders bring trademark infringement lawsuits before the court at the same time. Given that Article 150 of Chinese Civil Law has already provided suspension of the litigation, the new Chinese Trademark Law does not involve suspension of the litigation by the court handling trademark infringement cases.
3) The new Chinese Trademark Law provides that the TRAB and AICs “may” (not “shall”) suspend an action, which gives the TRAB and AICs plenty of discretions. This discretion shall be clarified with details in practice.
8. Effectiveness dates and effects of decisions and adjudications of CTMO and TRAB are further defined.
1) Effectiveness of opposition and invalidation. Article 36, 46, and 55 of the new Chinese Trademark Law expressly prescribes that the effective dates of decisions and adjudications of the CTMO and TRAB begins from the “expiration of statutory limitation,” not the date when the decisions and adjudications are made: (A) decision of rejection of an application for registration by the CTMO, and decision of review of an appeal by the TRAB; [Article 36] (B) invalidation of a trademark by the CTMO, decision of review of an invalidation by the TRAB and adjudication of review of an invalidation by the TRAB; [Article 46] (C) cancelation of a trademark by the CTMO, decision of review of cancelation appeal by the TRAB. [Article 55]These provisions have clarified some uncertain issues of the Chinese Trademark Law 2001.
2) Retroactive effect of a trademark approved for registration after opposition. Article 36 of the new Chinese Trademark Law adopts the provision in Paragraph 3, Article 23 of Implementing Regulations of Chinese Trademark Law 2001, that is, “the trademark approved for registration in an opposition adjudication shall not have the retroactive effect on another person’s act to use a sign identical with or similarly to the trademark on the same or similar goods from the date the period for trademark opposition expires and before the adjudication on the opposition takes effect; however, the losses inflicted to the trademark registrant due to the bad faith use of the sign shall be compensated. ”
3) Retroactive effect of a registered trademark invalidated. Paragraph 1 and 2 of Article 47 of the new Chinese Trademark Law adopts the provision in Article 36 of Implementing Regulations of Chinese Trademark Law 2001, that is, “the exclusive right to use of an invalidated registered trademark shall be deemed to be non-existence from the beginning. Any executed decisions, judgments, settlements by the Court, enforcement of trademark infringement decisions by the AIC, and trademark assignment, license or an agreement to use shall not have retroactive effect. However, in respect of damage done to any other person in bad faith by the trademark registrant, he shall compensate for the said damages.” Further, Paragraph 3 of Article 47 of this Law adds the provision that “where, pursuant to the preceding paragraph, no refund of trademark infringement compensation, trademark assignment fee, trademark royalty, or is obviously contrary to the principle of equity, the whole or part of the fee shall be repaid. ”
4) Effectiveness date of a registered mark cancelled. Article 55 of the new Chinese Trademark Law provides that “the registered mark cancelled will be published by the CTMO, and the exclusive rights thereof will be terminated on the date of publication,” which is modified from the provision in Article 40 of Implementing Regulations of Chinese Trademark Law 2001, that is, “the exclusive right in the registered trademarks shall terminate on the date of cancellation decision made by the CTMO.”
9. Administration on trademark use is further strengthened.
9.1 Definition of trademark use is clarified.
The new Chinese Trademark Law adopts the provision in Article 3 of Implementing Regulations of Chinese Trademark Law 2001, clarifies the definition of trademark use, and emphasizes the trademark use in the sense of Chinese Trademark Law with the purpose of “identifying the sources of goods/services.” This is of great guiding significance to handling trademark disputes in practice.
9.2 Legal consequence of improper use and non-use for three consecutive years of the registered marks is clarified.
Paragraph 1, Article 49 of the new Chinese Trademark Law adopts the provision in Paragraph 1, Article 39 of Implementing Regulations of Chinese Trademark Law 2001, and clarifies that the local AICs (instead of the CTMO prescribed in the Chinese Trademark Law 2001) have the power to order the rectification of unilaterally altering a registered trademark, name, address, or other registered matters, while the power to cancel the registered trademark remains with the CTMO. Where a trademark registrant during the process of registering a trademark unilaterally altered a registered trademark, name, address, or other registered matters, the local AIC shall order it or him to rectify it within a specified period; failing to rectify, the CTMO can cancel the registered trademark. This provision confers and increases managerial power to the local AICs. Moreover, Paragraph 1, Article 49 of this new Law adopts the provision in Paragraph 2, Article 39 of Implementing Regulations of Chinese Trademark Law 2001, and provides that any person may directly request to cancel a registered mark for non-use for three consecutive years, while the preceding procedure of “rectifying within the specified period” does not apply.
9.3 Amount of the fine imposed by the local AIC is further clarified.
1) For any violation of compulsory requirements of registered trademarks on certain goods/services prescribed by laws and administrative regulations, Article 51 of the new Chinese Trademark Law prescribes the specific amount of the fine.
2) For falsely presenting an unregistered trademark as registered, or using an unregistered trademark violates Article 10 of the new Chinese Trademark Law, Article 52 of the new Chinese Trademark Law prescribes the specific amount of the fine.
3) For using the wording “well-known trademark” on commercial activities in violation of Paragraph 5, Article 14 of the new Chinese Trademark Law will be ordered by local AIC to rectify the violation and impose a fine of RMB100,000 (around US$16,200), as prescribed by Article 53 of the new Chinese Trademark Law.
9.4 Cancellation against trademark registration of generic terms is adopted.
Paragraph 2, Article 49 of the new Chinese Trademark Law adopts the practice of cancellation against the trademark registration of generic terms. Like the cancellation against the three-year non-use cancellation, any entity is entitled to file cancellation against those registered marks where they have become generic terms.
10. Regulations on trademark agents are enhanced.
1) Article 19 of the new Chinese Trademark Law adds provisions of legal liabilities for trademark agencies, e.g., trademark agencies shall follow the principle of good faith; keep business secrets of the principal in confidence; expressly notify the principal where the principal’s trademark application may fall into circumstances prescribed under this Law that prevent its application from registration; not accept the entrustment if they know or should know that the principal’s trademark application falls into circumstances prescribed under Article 15 and Article 32 of this Law; not register marks beyond the scope of agency services.
2) The new Chinese Trademark Law adds penalties for breach of discipline and violation of laws. Article 20 of this Law adds regulations and penalties for trademark agency organization members. Article 68 of this Law adds penalties for trademark agencies as follows: the AIC shall order it to rectify within a specified period, give a warning, and fine; the person who are directly in charge and other persons who are directly responsible shall be given a warning and fine; in the case of criminal offense, the infringer will be held criminally responsible; the AIC will record any breach and violations into the credit archives; cease trademark agency services, etc.
Authors: Jason Wang and Yan Zhang
Beijing East IP Law Firm
http://www.beijingeastip.com
