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Co-Author: Jason WANG, Beijing East IP Law Firm
Co-Author: Yan ZHANG, Beijing East IP Law Firm

On August 30, 2013, China National People’s Congress enacted the amended the Chinese Trademark Law, and the new Chinese Trademark Law shall come into effect as of May 1, 2014. The current Chinese Trademark Law was enacted in 1982, and amended in 1993 and 2001 respectively. In December 2012, June 2013 and August 2013 respectively, the National People’s Congress has reviewed the draft amendments of the Chinese Trademark Law three times. We have sorted out the key amendments of new Chinese Trademark Law. Please see below the brief.

1. Time limitation is set for major matters of trademark prosecutions before Chinese Trademark Office (CTMO) and Trademark Review and Adjudication Board (TRAB).

For the first time, the new Chinese Trademark Law has set the time limitation for the following major matters of trademark prosecutions: 1) Preliminary examination for registration; 2) Rejection appeal; 3) Appeal against the CTMO invalidation decision regarding provisions of Article 10 (prohibition of using and registration as trademarks, such as name of country, deceptive signs, and geographical names well known to the public), Article 11 (lack of distinctiveness for two-dimensional marks), Article 12 (lack of distinctiveness for three-dimensional marks), or registration acquired by fraud or any other unfair means; 4) Cancellation based on generic names or three-year non-use; 5) Appeal against the CTMO cancelation decision; 6) Opposition; 7) Opposition appeal; and 8) Invalidation requested by the prior right holder or interested party. This provides a legal basis for the establishment of efficient trademark prosecution system. Trademark authorities (both the CTMO and the TRAB) have also attempted to accelerate trademark examination process by taking measures such as increasing personnel. However, as the amounts of trademark cases are hugely increasing, and trademark examination work is becoming more and more difficult, the public demand on shortening trademark prosecution periods also continues to increase.

In the new Chinese Trademark Law, three types of time limitations are set: 1) Nine Months; 2) Nine Months plus Three Months; and 3) Twelve Months plus Six Months.

2. Opposition and opposition appeal system is further optimized.

2.1 Qualification of the opponent is restricted in accordance to grounds of the opposition. Different from the Chinese Trademark Law 2001, where any entity may file the opposition based on various grounds, the new Chinese Trademark Law distinguishes the qualification of the opponent based on the different grounds of the opposition. [Article 33]

2.2 Opposition appeal procedure is partially cancelled in favor of the opposed party. Article 35 of the new Chinese Trademark Law partially cancelled the opposition appeal procedure in favor of the opposed party.

3. Well-known trademark protection system is further clarified.

3.1 Well-known trademark recognition is based on the request of the trademark right holder and a fact to be ascertained according to the necessity of the cases. [Paragraph 1, Article 14]

3.2 Types of cases involved and specific authorities governing well-known trademark recognition [Paragraph 2 to 4 of Article 14]

1) Opposition: the CTMO [Paragraph 2, Article 14];

2) Complaint before the the local Administration for Industry and Commerce (AIC) for trademark infringement disputes: the CTMO (reported by the local AIC) [Paragraph 2, Article 14];

3) Trademark dispute cases (opposition appeal, invalidation requested by the prior right holder or any interested party): the TRAB [Paragraph 3, Article 14];

4) Trademark infringement civil lawsuit: Courts designated by China Supreme Court (which means only limited courts will have the jurisdiction on trademark infringement civil lawsuits involving well-known mark protection) [Paragraph 4, Article 14];

5) Trademark administrative lawsuits: Courts designated by China Supreme Court (Beijing First Intermediate Court as the first instance court, Beijing High Court as the second instance court) [Paragraph 4, Article 14]

3.3 Prohibition of using the wording “well-known trademark” for commercial activities [Paragraph 5, Article 14]

4. Trademark protection is further strengthened.

4.1 Forms of trademark infringement are further clarified.

4.2 Conflict between trade name and registered mark or unregistered well-known mark is regulated.

4.3 Damages

1) Four ways and sequences of determining the damages are further clarified as follows: A) the actual losses of the rights holder; and then B) the infringer’s profits obtained from infringement; and then C) multiples of royalty fees; and then D) maximum statutory damages up to RMB 3 million (around US$ 490,000). [Paragraph 1, Article 63]

2) The maximum statutory damages are raised from RMB 500,000 (around US$ 81,000) to RMB 3 million (around US$ 490,000). [Paragraph 3, Article 63]

3) Punitive damages are adopted by the new Chinese Trademark Law. [Article 63]

4) The infringer is obliged to provide all available account books and data. [Paragraph 2, Article 63]

5) The trademark registrant will not be awarded with damages if such registered mark is not in actual use. [Paragraph 1, Article 64]

4.4 Penalty in the administrative complaint is further strengthened and clarified. [Paragraph 2, Article 60]

4.5 Fair use defense and prior use defense are added.

1) Fair use defense. [Paragraph 1, Article 59; Paragraph 2, Article 59]

2) Prior use defense. [Paragraph 3, Article 59]

5. Good faith principle of trademark filing is emphasized and bad faith filing is to be further cracked down

5.1 Catch-all provision of the good faith principle is added in the new Chinese Trademark Law. [Paragraph 1, Article 7]

5.2 Hijacking of another party’s unregistered mark with prior use based on the ground that the applicant is aware of such prior mark because the applicant has contractual, business or other relationships with the other party is prohibited. [Paragraph 2, Article 15]

5.3 Trademark agencies shall not accept the entrustment of new trademark application that falls into cybersquatting circumstances. [Article 19]

5.4 Other supporting measures are added. [Paragraph 1, Article 64; Paragraph 3, Article 59]

6. Regulations on trademark application and registration are enhanced.

6.1 Sound mark is accepted for registration. [Article 8]

6.2 Signs identical or similar to the national anthem, military emblem, military song, names and symbols of the Central and State organs, etc. are prohibited from using and registered as trademarks. [Paragraph 1(1), Article 10]

6.3 Deceptive signs which tend to mislead the public are prohibited from using and registered as trademarks. [Paragraph 1(7), Article 10]

6.4 Multi-classes registrations in one application are adopted. [Paragraph 2, Article 22]

6.5 E-filings are adopted. [Paragraph 3, Article 22]

6.6 Examination opinion is adopted. [Article 29]

6.7 Timeline for renewal formalities is advanced and prolonged. [Article 40]

6.8 Requirements for trademark assignment are clarified. [Paragraph 2 and 3, Article 42]

6.9 Procedure and nature of license recordation is further clarified. [Paragraph 3, Article 43]

7. Suspension of an action is added to review and invalidation cases by TRAB and trademark infringement cases by AICs. [Article 35; Article 45; Paragraph 3, Article 62]

8. Effectiveness dates and effects of decisions and adjudications of CTMO and TRAB are further defined.

1) Effectiveness of opposition and invalidation. [Article 36, 46, and 55]

2) Retroactive effect of a trademark approved for registration after opposition. [Article 36]

3) Retroactive effect of a registered trademark invalidated. [Paragraph 1 and 2 of Article 47; Paragraph 3 of Article 47]

4) Effectiveness date of a registered mark cancelled. [Article 55]

9. Administration on trademark use is further strengthened.

9.1 Definition of trademark use with the purpose of “identifying the sources of goods/services” is clarified. [Article 48]

9.2 Legal consequence of improper use and non-use for three consecutive years of the registered marks is clarified. [Paragraph 1, Article 49]

9.3 Amount of the fine imposed by the local AIC is further clarified.

1) Violation of compulsory requirements of registered trademarks on certain goods/services prescribed by laws and administrative regulations [Article 51]

2) For falsely presenting an unregistered trademark as registered, or using an unregistered trademark violates Article 10 of the new Chinese Trademark Law [Article 52]

3) For using the wording “well-known trademark” on commercial activities in violation of Paragraph 5 [Article 14]

9.4 Cancellation against trademark registration of generic terms is adopted. [Paragraph 2, Article 49]

10. Regulations on trademark agents are enhanced. [Article 19, Article 20]

Full Text: Key Amendments of New Chinese Trademark Law 2013
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