On September 2, 2011, the Legislative Affairs Office of
China's State Council released a circular seeking public
comments on proposed revisions to the Trademark Law of the
People's Republic of China (the "Draft
The most notable amendments in the Draft Revisions are
provisions aimed at preventing bad faith filings and changes to the
trademark opposition procedures.
The Draft Revisions provide that if a trademark applicant, due
to a contractual relationship, business contacts, geographic
location, or other relationship, obtains knowledge of an
owner's prior rightful use of a trademark in Mainland China and
nonetheless applies to register that same trademark in bad faith,
such an applicantion may be rejected or have its registration
canceled. Such rejection or cancellation may occur even if the
rightful owner's trademark has not gained the required
influence through use by the filing date of the bad faith
trademark. Moreover, if the rightful owner's trademark is
strongly distinctive and gained a certain level of influence, the
bad faith filing of a confusingly similar trademark may be refused
for registration even on dissimilar goods. Thus, the Draft
Revisions may serve to reduce the numerous bad faith trademark
filings that violate basic principles of honesty and credibility,
but in our view such changes will not entirely prevent such
violations in the future.
The Draft Revisions have also simplified China's trademark
opposition procedures, though such matters still have to be
accepted and heard by the China Trademark Office (CTMO). If the
CTMO approves the opposed trademark for registration, the opposing
party is no longer entitled to request an appeal; the CTMO's
decision will be final. Whereas, if the CTMO refuses to register
the opposed party's trademark, the opposed party is entitled to
further appeal to the China Trademark Review & Adjudication
Board (TRAB), and if still dissatisfied with the TRAB's
decision, may further appeal to the courts. Clearly these
provisions are contrary to the basic principle of judicial
supervision over administrative activities, as well as the
principle of equal procedural rights being offered to all involved
parties, which we think makes this procedure unfeasible.
Other important amendments include:
colors (instead of color combinations) and sounds would be
permitted as registrable trademarks for the first time;
famous trademarks that have not achieved the level of
recognition that would qualify them to be well-known trademarks
would nonetheless receive certain protections in the law for the
first time, which would be recognized by the Administration for
Industry and Commerce (AIC) at the provincial level;
if the CTMO finds that the registration of a trademark violates
the law, or that the trademark was obtained through fraudulent or
other improper means, the CTMO would have the power to cancel the
preliminary approval and publication of such a trademark;
the maximum amount of statutory compensation for trademark
infringement would increase from RMB 500,000 to RMB 1,000,000;
if the infringer commits more than two acts of trademark
infringement within a five year period, heavier penalties would be
infringement complainants must claim compensation based on
their losses during the infringing period; only if such losses are
difficult to determine, may they claim relief based on the profit
of the infringer during the infringing period (disgorgement);
although the decision to cancel a registered trademark is not
retroactive to the date that the judgment, ruling or decision comes
into force, if the compensation for trademark infringement, the
royalty and the assignment fee are not refunded to the injured
party, the basic principle of fairness will be violated - such
payment should be wholly or partially refunded; and
the time period for appealing against the CTMO's decision
to the TRAB would be extended from 15 days to 30 days.
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.
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