In August 1996 the Trade Mark Office of the People's Republic of China published long-awaited regulations setting up the procedures for foreign and domestic entities to obtain confirmation that their trade mark is 'well-known' in China.

China undertook to provide for this under the Action Plan agreed with the United States under a Memorandum of Understanding dated 26 February 1995.

The regulations provide a mechanism for obtaining confirmation of a trade mark's 'well-known' status. Such a confirmation lasts for three years, and can be renewed by a further submission.

To establish 'well-known' status, the regulations require evidence to be put forward detailing:

  • the volume and areas of sale for relevant products both within China and outside China;
  • equivalent information regarding advertisement and promotion of the trade mark;
  • the earliest date of use and proof of continuous use of the trade mark in China;
  • the extent to which the mark has been registered in China and elsewhere; and
  • a statistical analysis of the applicant's economic ranking as against other entities in the same business (giving such details as annual sales volume, profits and market share) over the previous three years.

Additional evidence may be submitted to demonstrate the 'well-known' status of the trade mark if the applicant wishes. It seems likely that the Registry will be flexible in allowing the submission of "best available evidence" which falls short of the listed criteria but still demonstrates that the mark is 'well-known'.

If a mark is approved as 'well-known', this confirmation will be published by the Trade Mark Office in its official journal.

The regulations apply as much to 'well-known' service marks as they do to 'well-known' trade marks for goods.

Once the mark is confirmed as 'well-known', the owner of the mark enjoys a significant extension of its rights in the mark, including:

1 Entitlement to prevent registration by others of trade marks which are identical or similar, even though registration is sought in respect of dissimilar goods or services. This right extends to obtaining cancellation of registrations which have been on the register for five years or more. (Where bad faith can be shown, there is no time limit for cancelling existing registrations.)

2 Preventing use of a trade mark which is identical or similar in respect of dissimilar goods or services. (There is a two-year limitation period for initiating such action, calculated from the date when the owner of the well-known mark knew or should have known of the acts in question.)

3 The prevention of other parties using or registering an enterprise name which is identical or similar to the 'well-known' mark. (Where the name has already been registered as an enterprise name, there is a similar two-year limitation period within which to seek cancellation of the registration.)

4 The regulations also provide for punishment of persons who make unauthorized claims that their trade mark is well-known (i.e. without having obtained the confirmation from the Trade Mark Office), with fines of up to the equivalent of US$3,700.

Also, whilst these new regulations may help to clarify the position on how well-known marks can be protected in China, it is not clear how these regulations will affect claims under the Unfair Competition Law. This law, which has been in force since 1993, permits actions to be taken through administrative agencies or through the People's Court to protect well-known trade marks even where they are not registered in China. It is to be hoped that this will continue to be the case.

The Trade Mark Office is reputedly drafting supplementary rules to clarify the regulations. These rules should be published shortly. The Trade Mark Law itself may also soon be amended to make express provision for the protection of 'well-known' marks. One significant area for clarification is the extent to which the trade mark must already be registered in China or elsewhere. The regulations suggest that the Trade Mark Office will only confirm a mark as well-known where it has already been registered in China. The Action Plan made no mention of such a pre-condition.

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c Linklaters & Paines 1996 - Tel +852 2842 4888