On April 23, the Thirteenth Standing Committee of the National People's Congress passed the fourth amendment to the Trademark Law of China. The new trademark law will come into effect Nov. 1, 2019. The revisions are designed to curb bad faith filings, willful infringements and counterfeit commodities. Businesses with brand interests in China will have stronger grounds to oppose and cancel bad faith applications and registrations under the new law; they will also be able to more effectively enforce their trademark rights in China. The most significant of the new revisions are described here.
Bad Faith Being Ground for Rejection, Opposition and Cancellation: Under the new trademark law, any application or registration for a mark that is not intended for use will be considered as a bad faith application or registration. Whereas bad faith had previously been predominantly used in the invalidation context, it is now a valid ground for rejection, opposition, and cancellation of trademark applications and registrations.
Trademark Agents Prohibited From Handling Bad Faith Filings and Punished for Violation: The new trademark law prohibits a trademark agent from assisting in any bad faith filing if the agent knows or should have known that the applied mark is not intended for use. Any trademark agent who files bad faith trademark applications will be subject to warnings, fines, administrative punishments and court sanctions based on the circumstances of the acts.
Counterfeit Commodities and Materials/Tools for Manufacture to Be Destroyed: Upon the request of the trademark owner, the court may order the destruction of any commodities bearing counterfeit trademarks and the destruction of the materials and tools mainly used for manufacturing counterfeit commodities without granting any indemnity. Under exceptional circumstances, such materials or tools will be forbidden from reentering the business channel without granting any indemnity. The counterfeit commodities shall not enter the business channel with the mere removal of the counterfeit trademarks from such commodities.
Punitive Damages and Statutory Damages to Be Increased: Under the new trademark law, the cap amount of punitive damages for willful trademark infringement will be increased from "three times" to "five times" the amount of the actual losses suffered by the right owner, the proceeds earned by the infringer or reasonable multiples of trademark license fee. The upper limit of statutory damages will be raised from RMB 3 million to 5 million yuan.
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