On August 30, 2013, the Standing Committee of China's National People's Congress passed a new Trademark Law (the "New Law"), which will come into effect on May 1, 2014. The New Law makes extensive amendments to the current People's Republic of China (PRC) Trademark Law, which was promulgated in 1982.
1) Trademark Registration
In addition to the previously eligible marks, the New Law adds "sound" as a mark that qualifies for legal protection as a trademark. The New Law also allows prospective owners to apply for trademarks in multiple classes through one trademark application, instead of having to submit an application for each class. In addition, the New Law extends the registration renewal period from six to 12 months prior to the trademark's expiration.
2) Protection of Well-Known Trademarks
For the first time, the New Law explicitly provides that a trademark can be recognized as "well-known" by the Trademark Office (CTMO), the Trademark Review and Adjudication Board (TRAB) and the people's courts designated by the Supreme People's Court. However, the New Law provides an explicit prohibition on the use of the phrase "well-known trademark" for commercial advertising purpose.
3) Deadlines Imposed on the Authorities
In order to accelerate the trademark prosecution process, the New Law creates a deadline of nine months each for the examination of an application, an application appeal, a non-use cancellation and an appeal for non-use cancellation, as well as a deadline of 12 months each for an examination of an opposition and opposition appeal.
4) Trademark Opposition
A trademark that survives an opposition in CTMO will be deemed as registered, and an opponent's option of filing an appeal to TRAB or the court has been removed under the New Law. Instead, a fresh cancellation petition to TRAB is the newly provided mechanism for appeal.
5) The Doctrine of Good Faith
The doctrine of good faith is one of the fundamental principles of civil law and is more deeply integrated into PRC trademark jurisprudence by the New Law. The filing of a trademark application and the use of a trademark is now required to comply with the doctrine of good faith, and any trademark agent who violates this doctrine may face fines or even criminal charges.
6) Trademark Enforcement
The New Law provides for dramatic increases in the administrative fines and compensation for trademark infringement. The new maximum level of statutory damages has risen to RMB 3,000,000, (about $50,000 U.S.), and the new maximum amount for administrative fines is five times the illegal gains, up to RMB 250,000 (about $40,000 U.S.). In addition, if a party commits trademark infringement on two or more occasions within five years, there may be heavier administrative punishments.
There are also some protections for defendants in private enforcement actions. The New Law allows an accused infringer to require a trademark owner to prove the use of the trademarks in contention within the three-year period prior to the filing of the lawsuit. If a right holder is unable to prove such use and is also unable to prove any other losses suffered as result of the alleged infringing behavior, the defendant would not be liable.
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.
