On 13 January this year, the China National Intellectual Property Administration (CNIPA) issued a notification on soliciting public opinions regarding the draft revision to the China Trademark Law. The draft is published on CNIPA's website (in Chinese) to solicit public opinions until 27 February 2023.
A comprehensive revision
This will be the fifth revision of the China Trademark Law since 1983. The proposed draft is a comprehensive revision, and the total number of provisions in the Law has increased from 73 articles to 101 articles.
However, there will still be a series of long procedures to go through before the draft becomes legislation. The current version is published for public opinions and further improvements and amendments will be made.
The revision aims to improve trademark protection. Efforts have been made to reshape the law to shift from the current registration-based system to be more use-focused.
Under the draft revision, a statement of trademark use will be required, and repeat trademark registration will be forbidden, except in certain circumstances.
Stronger protection will be given to well-known trademarks, either registered or unregistered in China. Bad faith trademark filings are strictly forbidden and compulsory transfer to the legitimate trademark holder will be possible. In addition, the draft revision aims to improve the efficiency of trademark examination, by shortening the opposition procedure.
Regulation of bad faith trademark filings
The banning of bad faith filing has been specifically added to the draft revision. The following situations are considered as constituting bad faith filing:
- Filing a large number of trademarks without the genuine purpose of use and disrupting the order of trademark registrations;
- Filing trademarks by fraud or other improper means;
- Filing trademarks which cause damage to the state interests, public interests, or may cause other substantial negative influence;
- Filing trademarks that are in violation of Articles 18 [well-known trademark], 19 [preemptive registration of agents, representatives, and interested parties] and 23 [preemptively register other people's trademark that is used and has certain influence], or intentionally damage other parties' interests and rights. The draft revision further lays down administrative punishment and civil compensation for bad faith trademark filings. The draft revision stipulates that parties that constitute bad faith filings will face a warning from the trademark law enforcement departments or will be subject to a fine of no more than 50,000 yuan.
For those with serious offences, a fine of 50,000 yuan to 250,000 yuan will be imposed and illegal gains will be confiscated.
For the bad faith filings that cause damage to other parties, parties may initiate a lawsuit with the courts and claim civil compensation. The compensation may cover reasonable expenses to stop the bad faith filings. For bad faith filings that cause damage to the state interests and public interests, the procuratorial authorities may initiate legal prosecution.
Compulsory transfer of trademarks registered in bad faith
The draft revision provides that, if a registered trademark violates the relevant provisions of the Trademark Law, the prior right holder or interested party may request the IP administrative department of the State Council to declare the registered trademark invalid.
For those who violate the provisions of Article 18 of this Law on the protection of well-known trademarks, and Article 19 of this Law on the preemptive registration of agents, representatives and interested parties, or violate the provisions of Article 23 of this Law to preemptively register another person's trademark that is used and has a certain influence, the prior right holder may request to transfer the registered trademark to his own name.
Establishment of credit and good faith
The draft clarifies that oppositions and invalidations can be filed based on bad faith filings and stipulates administrative punishments on dishonest behaviours in trademark filings such as providing false documents. The credit supervision has also been introduced in trademark registration and use.
The draft also strengthens the supervision and management of the trademark agencies, laying out the admission requirements and obligations.
Strengthening of well-known trademark protection
The draft reinforces the protection on unregistered well-known trademarks, adding anti-dilution protection to the well-known trademarks. It adds the principles on the protection of well-known trademarks, specifically the principles of determination on case-by-case basis, passive protection and on-demand recognition.
The draft stresses that the scope and level of protection of a well-known trademark shall be in line with the degree of distinctiveness and reputation of the trademark.
One of the major proposed amendments concerning well-known trademark protection is that a well-known trademark, which is unregistered in China, can enjoy protection on both identical and similar goods and dissimilar goods. Under the current law, an unregistered well-known trademark can only enjoy protection on the same or similar goods.
Emphasis on the obligation of trademark use
A statement of use shall be filed every five years after the registration of the mark. More circumstances are added as the basis of cancellation of a registered trademark, such as: the use of a registered trademark is misleading in respect to the quality or origin of goods.
Repeat trademark registration forbidden
The draft provides that the trademark registration applied for shall not be the same as one already applied for or registered by the same applicant on the same goods, or the same as a trademark that is removed, cancelled or declared invalid within one year, except if the applicant agrees to remove its prior registration, or under certain circumstances.
Cancellation of trademark registration
More circumstances are added for the cancellation of a registered trademark, in addition to the circumstances of generic name and three years' non-use as stipulated in the current law.
According to the draft, anyone can file a petition of cancellation, wherein the use of a registered trademark is misleading to the relevant public in respect to the quality or origin of goods; wherein the registrant of collective mark or certification mark violates the obligations of collective mark and certification mark, with extremely serious circumstances; and wherein the use or enforcement of a registered trademark severely damages the public interests and causes significant negative influences.
Trademark infringement related to e-commerce activities
The infringement of the exclusive right to use registered trademarks through e-commerce activities is added in the draft. The scope of trademark use covers the use of information networks such as the Internet.
The draft provides that trademark infringement activity includes using signs identical or similar to the registered trademarks of others in e-commerce related to the same or similar goods without the permission of the trademark registrant and causing consumers confusion.
Public interest litigation concerning trademark infringement
The procuratorial authorities may initiate litigation against the infringement of the exclusive right to use a registered trademark with the people's court according to the law under the conditions that:
- The infringement of the exclusive right to use a registered trademark causes damages to the interests of the State or the society and public;
- The holder of a right to exclusively use a registered trademark or the interested party does not initiate litigation against the trademark infringement; and
- The administration responsible for enforcement of the trademark law has not dealt with trademark infringement.
Counterclaim for malicious litigation
The people's court shall punish according to the law anyone who files trademark litigation maliciously. If this litigation causes losses to another party, there should be compensation for the losses.
The amount of compensation shall include reasonable expenses paid by the other party for stopping the trademark litigation in bad faith.
The draft intends to stipulate the admission requirements for trademark agencies and further regulates trademark agency behaviour. It strengthens the supervision and management of trademark agencies, clarifies the admission requirements of trademark agencies, and improves the quality of trademark agency services (Article 68).
It also strengthens the responsibilities and obligations on trademark agencies and practitioners, and standardises trademark agency behaviour (Article 69); improves the duties and obligations of the trademark agency industry organisation, and requires the organisation to better play the role of industry self-discipline (Article 70).
It further clarifies the illegal acts of a trademark agency, and increases the restrictive requirements on the person in charge of an illegal trademark agency, the person directly responsible, and the shareholder with management responsibility for new positions (Article 86).
Non-acceptance of trademarks found to have significant negative effects
The draft provides that if the IP administrative department of the State Council finds that the trademark applied for registration obviously has significant negative effects, it shall not accept the application during the formality examination stage.
Preliminary examination opinion
The draft provides that during the examination process, if the IP administrative department of the State Council believes that the content of the trademark registration application needs to be explained or amended, it may issue a preliminary examination opinion to require the applicant to make an explanation or amendment.
If the applicant fails to make an explanation or amendment, it will not affect the examination decision made by the IP administrative department of the State Council.
Revocation of publication of preliminary approval
For trademarks that are found to violate the provisions of Article 15 [signs not allowed to be used as trademarks] after the preliminary approval, the draft provides that the publication of the preliminary approval can be revoked ex officio.
The draft shortens the publication period of a preliminarily approved application to two months for filing opposition (Article 36).
The draft cancels the procedure of review of opposition totally. If the IP administrative department of the State Council makes a decision to disapprove of registration, and the opposed party is not satisfied, they may file a lawsuit in a people's court within 30 days from the date of receipt of the decision (Article 39).
Suspension of procedure
The draft unifies the provisions on the suspension of the procedure and adds provisions that the people's courts do not apply the principle of change of circumstances in the trial of administrative cases of trademark authorisation and confirmation.
In the processes of trademark examination and trial, the IP administrative department of the State Council may suspend the examination and review if the determination of the prior rights involved must be based on the results of another case that is being tried by the people's court or being handled by the administrative agency.
After the reasons for the suspension are eliminated, the examination and review procedures shall be resumed in a timely manner.
When the people's court hears the decision of refusal review, decision of non-registration or ruling of invalidation made by the IP administrative department of the State Council, it shall take the factual status at the time of the relevant decision or ruling being made as the basis.
If the status of the relevant trademark changes after the decision or ruling is made, it will not affect the trial of the decision or ruling by the people's court, unless it clearly violates the principle of fairness.
Watch this space
The current version of the draft is published for public opinions and further improvements and amendments will be made. Based on previous experiences, we expect the draft will be substantially improved after listening to and accepting the suggestions of all stakeholders.
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.