On 30 August 2013, the Standing Committee of the National People’s Congress passed amendments to the PRC Trademark Law (“Trademark Law”), which amendments are the most significant revision to the Trademark Law since it was last amended in 2001. The new law is more in line with major international trademark laws and will be implemented on 1 May 2014. Its salient features are below :-
1. Sound Trademark
Sound mark is now registrable as trademark under Article 8. However, the examination criteria and procedures will only be announced later and interested applicants will then be able to assess its viability.
2. Multi-Class Applications
Article 22 allows multi-class applications of a trademark. Currently, only a single class application is allowed in each trademark application. It remains to be seen whether the new arrangement will reduce application costs.
3. Faster Application
To facilitate the examination process, the new law now provides for various statutory time limits for trademark registration, review, opposition, invalidation and cancellation proceeding and some of the limits are as follows :-
(i) Trademark Application
The new law sets down a period of 9 months for the PRC Trademark Office to complete the examination of a trademark after receiving the registration documents. No extension of time is allowed.
If the trademark application complies with the legal requirements, the PRC Trademark Office should issue a preliminary examination announcement. Within 3 months of the preliminary examination announcement, interested parties may raise opposition to the registration of the trademark by filing arguments and adducing evidence. Otherwise, the application will be approved and the certificate of trademark registration will be issued and the PRC Trademark Office will make an announcement accordingly.
(ii) Review on Refusal Decision
The applicant can within 15 days of the notice of refusal apply for review of the refusal decision. The PRC Trademark Office should complete the review within 9 months of receiving the review request and provide written decision to the applicant. Under special circumstances and upon approval by the Administration of Industry and Commerce, the review can take 3 more months.
The new law allows trademark renewal to be filed within 12 months of the expiration of the mark. An extension of 6 months is allowed if the renewal is not made within the 12-month period.
4. Well Known Trademark
Article 14 of the Trademark Law now expressly forbids the use of the words “well known trademark” on products, advertisements, promotions, exhibitions and other commercial activities. A breach of this section will attract a fine of up to RMB100,000.
5. Trademark Registration in Bad Faith
It is now codified that the application of trademark registration and its use should comply with the principle of good faith (Article 7).
The existing law only forbids a trademark holder’s agent or representative to register the mark in his own name in bad faith without authorization; the new law has widened the class of restricted persons to cover an applicant who is aware of the other party’s mark (albeit unregistered in China) through a contractual relationship, business dealings and other relationship. An application to register a trademark identical or similar to another party’s mark for the same or similar goods or services will be rejected if it is opposed by the said other party who has prior use. This new provision should be a comfort to foreign investors against trademark squatters.
6. More Infringement Damages
The statutory limit for trademark infringement compensation has been raised from RMB500,000 to RMB3 million. Moreover, a new concept of punitive damages for wilful infringement of up to three times the actual compensatory damages has been added.
In assessing damages, the Court is allowed to refer to the following factors set out under Article 63 (in order) :-
(i) actual loss of the trademark holder;
(ii) profits of the infringer arising from the trademark infringement; or
(iii) reasonable license royalty.
In response to rampant problems of trademark squatting and bad faith registration in China, a number of significant changes have been made to the Trademark Law to enhance trademark protection for owners. It is interesting how these new provisions will be implemented in practice after detailed regulations are released. It is expected that an implementation regulation will be released soon to clarify how these new measures will work.
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