New Trademark Law finally promulgated

The new Chinese Trademark Law was promulgated on 30th August 2013 after many years of discussion. It will come into effect on 1st May 2014, replacing the previous law, which was enacted in 1982 and has twice been amended. Important changes in the new law include the following:

  • The new law has taken a further step to combat bad-faith applications by regulating trademark agents. It explicitly provides as follows:
    • Trademark agents are under a duty to inform their clients where a mark is not registrable according to the law.
    • Trademark agents should refuse to act where they know or ought to know that their clients are making a bad-faith pre-emptive application of others’ marks or an application that would infringe others’ prior rights.
    • Trademark agents are not allowed to apply for marks in their own names for the purpose of making profits.
    • The Chinese Trademark Office and the Trademark Review and Adjudication Board may blacklist and refuse to accept applications filed by trademark agents which are found to have seriously breached the law and principle of honesty.
  • The maximum statutory damages for infringement has been increased six times from Rmb500,000 to Rmb3 million, and up to three times the normal damages may be awarded for serious bad-faith infringement.
  • For the first time, China has officially regulated the time taken by the trademark authorities to examine a mark. Any extension of time is permitted only in special circumstances. The new law provides that the time limits for trademark application preliminary examinations and opposition determinations are nine months and 12 months, respectively. The Trademark Review and Adjudication Board has only nine months to review the rejection of a trademark application. These changes result in significant improvement to the existing system in which trademark authorities have no time restraints and the examination time for a straightforward trademark application may take up to three years in the past. However, in recent years the authorities have made a major effort to shorten the examination time. At present, it takes about two years for a straightforward application to be approved and one to two years to deliver an opposition decision.
  • The new law prevents the owner of a well-known mark in China from using the well-known mark designation on packaging or in advertisements, in order to prevent the well-known mark system from being abused as a tool to confuse consumers and enhance recognition of the products. Originally intended to protect successful brands, the designation does not necessarily guarantee product quality or reputation, and has been defined differently in regulations and judicial interpretations.
  • The new law introduces the concept of right of prior use. A party may continue to use its mark even if an identical or similar mark has been registered in respect of identical or similar goods or services if it can show that it has used the mark previously and that the mark has attained a certain level of reputation through use. However, the mark owner can require the prior user to add a distinctive sign to its goods. 

It is clear that the new law refines China’s trademark protection and introduces for the first time new concepts such as prior use rights and liability for trademark agents. The promulgation of the new law is a step in the right direction to protect trademark rights and prevent abuse of the trademark system. 

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

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