1. Amendments to Key IP Laws
On 23 April 2019 China passed amendments to two major IP laws – the Trademark Law and the Anti–Unfair Competition Law (AUCL).
Specifically, the Trademark Law has been amended in order to tackle bad faith trademark filings without an intent to use by way of clarifying Article 4 of the law. The newly amended Article 4 provides that a bad faith trademark application without intent to use should be rejected. A trademark agency which knows or should have known that an application is in violation of Article 4 should refuse to act for the applicant, and anyone (as opposed to an interested party) can oppose or apply to invalidate a published or registered trademark if it violates Article 4.
The amendments to the AUCL mainly improve the protection of trade secrets. Specifically, the amended law:
(i) broadens the definition of “trade secret” from “technical information and operational information” to also include “other business information”;
(ii) expands acts of infringing trade secrets to include obtaining trade secrets by “electronic intrusion” and also indirect infringement such as “solicitation, seduction and assistance”; and
(iii) extends the parties that can be held liable for trade secrets infringement to not only business operators but also other individuals (such as employees or former employees) and entities.
Most importantly, the amended law also reverses the burden of proof for trade secrets infringement by providing that the plaintiff is only required to produce prima facie evidence of infringement and that the defendant is then required to prove that the trade secret(s) at issue does not constitute a trade secret under the AUCL.
Notably, the amendments to both laws have also increased liabilities for trademark/trade secrets infringement by:
(i) providing punitive damages in the amount of up to five times the regular damages award; and
(ii) increasing statutory damages from RMB 3 million to 5 million.
These amendments significantly enhance IP protection in China and are quite encouraging news for those who have been watching this space. For further information, please see our recently published articles on the Amendments to the Trademark Law and Trade Secrets Protection regime.