Hong Kong: Well-Known Marks Under The New Chinese Trade Mark Law

The new Trade Mark Law of China came into force on 1 May 2014. One of the key changes is the provision of clearer guidance on recognition and protection of well-known trade marks in China.

Clearer guidance on Well-known Trade Marks under the new Trade Mark Law

The concept of a well-known trade mark is not new. Under the old Trade Mark Law, a well-known trade mark would be assessed and determined based on the following criteria:

• The extent of the fame and reputation of the trade mark among the relevant public;
• The duration of use of the trade mark;
• The duration, extent and geographical reach of any advertisements for the trade mark;
• Any prior records of well-known status recognition; and
• Any other factors contributing to the well-known status of the trade mark.

According to statistics from the Chinese Trade Mark Office, out of 1,300 trade marks being endorsed as well-known trade marks between 2012 and 2013, only about 20 marks were foreign brands. This suggests that in practice a strong local presence of the trade mark in China was required in order to earn the well-known mark status in China.

The new Trade Mark Law does not relax the requirements on recognition of a well-known trade mark as such. However, the new law clarifies the recognition procedure for well-known trade marks and how well-known trade marks should be used in practice. We set out below the clarifications offered under the new law:

i. Circumstances in which the well-known trade mark status may be recognised:

• During the examination of a trade mark application, and at the request of the trade mark applicant, the Chinese Trade Mark Office (CTMO) may determine and conclude the well-known status of a trade mark in accordance with the facts of the case;
• In the course of investigating a trade mark infringement case conducted by the administration departments for industry and commerce, and at the request of the trade mark owner, the CTMO may determine and conclude the well-known status of a trade mark in accordance with the facts of the case;
• In the course of handling a trade mark dispute matter (such as an opposition or cancellation), and at the request of the trade mark owner, the Trademark Review and Adjudication Board (TRAB) may determine and conclude the well-known status of a trade mark in accordance with the facts of the case;
• In the course of adjudicating a trade mark case or an administrative appeal, and at the request of the trade mark owner, the Chinese court may determine and conclude the well-known status of a trade mark in accordance with the facts of the case.

In essence, the new law has provided clearer guidance as to the avenues through which a well-known trade mark can be applied for. The new law aims to curb abuse of the well-known trade mark regime by stemming out the unhealthy practice of recognition of well-known trade marks which is unnecessary for the dispute in question or by unqualified authorities.

ii. Restrictions on the commercial use of "Well-known Trade Mark":

Draft Provisions on the Recognition and Protection of Well-known Trade Marks (馳名商標認定和保護規定–修訂征求意見稿)

In April 2014, the State Administration for Industry and Commerce (SAIC) put forward draft provisions on the recognition and protection of well-known trade marks (for consultation) to bring the 2003 provisions in line with the new Trade Mark Law. The provisions are intended to supplement the new law in the definition and recognition of well-known trade marks. The major changes include:

• Rise in threshold in definition of well-known trade mark, as shown below:

• Evidence to be adduced for marks with or without registration in China

• Reinforcing the principle that well-known trade mark recognition should be granted on a case-by-case basis and in the form of passive protection.

The new provisions are expected to be finalised and implemented soon by the SAIC.

Conclusion

The new Trade Mark Law tightens up the procedure and raises the threshold for obtaining a well-known trade mark recognition in China. This probably presents a mixed bag for foreign trade mark owners. On the one hand, the new law is to be applauded for trying to deter abusive and indiscriminate recognition and use of the "well-known trade mark" badge especially by local Chinese entities. On the other, the more restrictive procedures and threshold will make it even more difficult for foreign trade mark owners to obtain a well-known trade mark status in China.

Originally published Second Quarter 2014

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