On 1 May 2014, amendments to the Chinese trade mark laws came
into effect. Many of the changes are aimed at improving the
efficiency and effectiveness of the Chinese trade mark system. Most
of the changes will be welcome by all brand owners, such as the
good faith obligation for all new trade mark applications. It is
anticipated that the effect of some changes will take time to be
settled in practice. Importantly for Australian brand owners
manufacturing in China, the new laws do not settle the question of
whether manufacturing branded goods (but not selling those goods)
in China equates to trade mark use.
The changes include:
a new obligation of good faith for new trade mark filings and
all trade mark agents. This is aimed at deterring trade mark
pirates from seeking to register the brands of others, including in
the context where distributers or manufacturers register business
an increase in the maximum compensation available for trade
mark infringement. This has been increased to around US$500,000
which is substantially higher than the previously available amount
and is intended to further deter trade mark infringers;
multi-class trade mark applications will now be allowed, which
will be welcome by brand owners with trade marks that span goods
and services in multiple classes;
the ability to register new (non-traditional) trade marks such
the need to record a trade mark licence for the licence to be
enforced. It should continue to be considered a crucial step to
record any licence arrangements in China; and
stricter timelines for trade mark examinations, opposition
decisions and reviews, where these could previously take several
years. As a basic guide, examinations should occur within 9 months
of filing, and opposition decisions issued within 12 months (with
extensions available). Greater certainty around these time frames
will be welcome.
However, trade mark opponents will no longer be able to request
a review of an unsuccessful opposition decision. This highlights
the need to ensure an opposition is fully supported at the time of
filing, which may create additional frustrations for brand owners
given the short evidence gathering allowed before the Chinese Trade
Of particular interest to Australian brand owners who
manufacture in China, the new laws specifying that the use of a
trade mark includes the use of the trade mark on goods, packages,
containers or in trading documents, advertising, exhibitions or any
other business activities, which identify the source of the goods.
This will no doubt impact the ongoing debate in China as to whether
simply manufacturing your branded goods (but not selling those
goods) in China is trade mark use. This issue has not been settled
by the new laws, but Chinese commentators do generally note that
the prudent approach is to assume that application of a trade mark
in China on manufactured goods should be regarded as trade mark
use. Chinese sources do anticipate that this issue will be
clarified shortly as the Supreme People's Court issues its
rolling interpretations of the new laws.
From an Australian brand owners perspective, the changes are
generally positive and are aimed at creating greater certainty
within the Chinese Trade Marks Office. It will be interesting to
see how some of the changes are applied in practice, particularly
in relation to the need to record trade mark licences, and use of a
trade mark for manufacturing purposes. Norton Rose Fulbright has a
market leading Intellectual Property practice. Please contact
Frances Drummond or Cameron Harvey if you would like to know more
about the changes to the Chinese Trade Mark legislation and the
implications for your business.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
As a licensor or a licensee, here are some tips you should consider when negotiating your next licence agreement.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).