Amendment to the Chinese Trademark Law was reviewed for the third time and adopted by the Fourth Session of the Standing Committee of the 12th National People’s Congress on August 30, 2013, and will be effective and enforced as of May 1, 2014. The amendment aims at implementing the National Intellectual Property Strategy and bringing the Trademark Law system into full play. The existing Trademark Law of the People’s Republic of China (hereafter referred Trademark Law) was enacted in 1982 and amended respectively in 1993 and 2001, and is the first special law on intellectual property enacted after China adopted the reform and open policy.

Up to the first half-year of 2013, the cumulative numbers of trademark application and registration in China are respectively 12.21 million and 8.174 million, which ranked first in the world. In recent years, China has begun to realize that some provisions of the existing Trademark Law are no longer suitable for the practical needs of development of socialist market economy. The problem shows in many ways, mainly that the trademark registration procedures are cumbersome, that the examination of trademark for confirmation and authorization costs too much time, that the phenomenon of malicious registration often happens, that trademark infringement is hard to prevent, and so on. In light of these circumstances, the amended Trademark Law shows the following progress.

  1.  It defines and shortens the examination time limit of trademark cases.
  1. To shorten examination time limit of trademark registration

At present, from filing an application for a trademark to the publication of preliminary approval, it takes about 12 to 18 months, or even longer. According to the amended Trademark Law, the Trademark Office shall complete examination within 9 months after receiving a trademark registration application. Applications that conform to the relevant provisions in this law shall be preliminarily examined and approved, and the Trademark Office shall make a publication thereon. To legislate 9 months as the legal time limit of trademark registration examination, it substantially shortens the examination period.

  1. To define the review and adjudication time of review of refusal of an application

The Trademark Review and Adjudication Board shall make a decision within 9 months after receiving an application for review of refusal of application for trademark issued by the Trademark Office, and notify the applicant in writing. If the term needs to be extended due to special circumstances, it may be extended for 3 months upon approval of the State Council’s Administrative Department for Industry and Commerce. At present, though the Trademark Review and Adjudication Board has increased the number of examiners and tried to enhance its efficiency, such kind of cases usually cost one or two years, or even longer. Through legally defining the review time limit, the efficiency of review of refusal will be enhanced.

However, the time limit of filing a review of refusal is the same as it is, that is, the applicant should file an application for review within 15 days after receiving the notice of refusal from the Trademark Office. Within such a short period, applicants, especially foreign applicants cannot make decision on applying for review with good preparation. What’s worse, they sometimes even lose the opportunity for filing the review of refusal. 

  1. To shorten the examination time limit of opposition

Where an opposition is filed against a preliminarily approved and published trademark application, the Trademark Office shall hear the facts and grounds stated by the opponent and the respondent. Upon investigation and verification, the Office shall make a decision on whether it approves the registration within 12 months of the expiration of the publication, and shall notify the opponent and the respondent. If the term needs to be extended due to special circumstances, it may be extended for 6 months upon approval of the State Council’s Administrative Department for Industry and Commerce.

  1. To define the examination time limit of declaration of invalidation

Firstly, as for cases of declaration of invalidation raised on absolute conditions, if a registered trademark violates Article10 (legality), Article11 (distinctiveness), or Article12 (functionality) of the Trademark Law, or for which registration was obtained by deceptive or other improper means, the Trademark Office shall declare the invalidity of the registered trademark. Other organizations and individuals may file a request with the Trademark Review and Adjudication Board for a decision to declare the invalidity of the registered trademark.

If the Trademark Office decides to declare the invalidity of the registered trademark, it shall notify the parties in writing. If a party concerned is dissatisfied with the decision, the party may, within 15 days of receiving the notification, apply to the Trademark Review and Adjudication Board for review. The Trademark Review and Adjudication Board shall make a decision within 9 months of receiving the application for review, and notify the parties in writing. If the term needs to be extended due to special circumstances, it may be extended for 3 months upon approval of the State Council’s Administrative Department for Industry and Commerce. A party concerned who is dissatisfied with the decision made by the Trademark Review and Adjudication Board may file a lawsuit to the court within 30 days of receiving the decision.

If other organizations or individuals file a request with the Trademark Review and Adjudication Board for a decision to declare the invalidity of the registered trademark, the Trademark Review and Adjudication Board shall, upon receiving the application, notify the relevant party and specify a time limit for the party to submit a response. The Trademark Review and Adjudication Board shall make a decision of maintaining the registered trademark or declaring the invalidity of the registered trademark within 9 months of receiving the application, and shall notify the parties in writing. If the term needs to be extended due to special circumstances, it may be extended for 3 months upon approval of the State Council’s Administrative Department for Industry and Commerce. A party concerned who is dissatisfied with the decision made by the Trademark Review and Adjudication Board may file a lawsuit to the court within 30 days of receiving the decision. The court shall notify the other party concerned to participate in the litigation as the third party.     

Secondly, as for cases of declaration of invalidation raised on relative conditions, if a registered trademark violates paragraph 2 and paragraph 3 of Article13 (well-known trademark), Article15 (principal’s trademark), paragraph 1 of Article16 (geographical indication), Article30 (pre-existing trademark), Article31 (applications filed at the same time by two or more applicants), Article32 (pre-existing mark in use and reputable, pre-existing rights) of the Trademark Law, the pre-existing trademark owner or an interested party may, within 5 years of the trademark registration date, may file a request with the Trademark Review and Adjudication Board for a decision to declare the invalidity of the registered trademark. In the case of malicious registration, the owner of the relevant well-known trademark shall not be subject to the 5-year time limit.

The Trademark Review and Adjudication Board shall, upon receiving the application for a decision to declare the invalidity of the registered trademark, notify the relevant party in writing and specify a time limit for the party to submit a response. The Trademark Review and Adjudication Board shall, within 12 months of receiving the application, make a decision of maintaining the validity or declaring the invalidity of the registered trademark and notify the parties concerned in writing. If the term needs to be extended due to special circumstances, it may be extended for 6 months upon approval of the State Council’s Administrative Department for Industry and Commerce. A party concerned who is dissatisfied with the decision made by the Trademark Review and Adjudication Board may file a lawsuit to the court within 30 days of receiving the decision. The court shall notify the other party concerned to participate in the litigation as the third party.

At the same time, during the review of an application for declaration of invalidity of a registered trademark carried out by the Trademark Review and Adjudication Board according to the provision of the preceding paragraph, where the definition of a relevant pre-existing right should be in accordance with the result of another case which is being tried in court or being dealt with by the administrative authorities, the review may be suspended. After the cause for suspension of review disappears, the review shall be resumed.

The amended Trademark Law shortens and defines the administrative examination and review period through legislation, which aims at improving the efficiency of the administrative authorities, simplifying the administrative procedure and facilitating the applicant and parties on their administrative application for confirmation and authorization.

  1.  It simplifies the procedure of trademark for confirmation and authorization.
  1. To add to multiple class application

The amended Trademark Law allows multiple class application under trademark application, providing that the trademark registration applicant may, with one application, apply to register one trademark on multiple classes. The multiple class application serves the applicants with more choice of filing applications, which improves application approach, lowers the registration cost for the applicants, simplifies the trademark application procedures and is consistent with the Madrid System of international trademark registration.

  1. To add the procedure of examiner’s advice

During the review, if the Trademark Office considers that the content of a trademark registration application should be explained or modified, it may request the applicant to give an explanation or modification. Where the applicant doesn’t give an explanation or modification, the decision on the examination made by the Trademark Office shall not be affected. This approach facilitates the applicants to communicate with the Trademark Office in time to modify the content of the trademark application, through which the trademark refusal may be avoided and the trademark application may pass the examination without problem.

  1. To improve the trademark registration opposition system

The amended Trademark Law divides the trademark opposition into two types, namely the absolute conditions and the relative conditions. The opponent of the opposition on absolute conditions can be anyone, and the grounds are restricted to be in violation of Article10 (legality), Article11 (distinctiveness), or Article12 (functionality) of the Trademark Law. The opponent of the opposition on relative conditions should be pre-existing right owners and other interested parties, and the grounds are restricted to be in violation of paragraph 2 and paragraph 3 of Article13 (well-known trademark), Article15 (principal’s trademark), paragraph 1 of Article16 (geographical indication), Article30 (pre-existing trademark), Article31 (applications filed at the same time by two or more applicants), or Article32 (pre-existing mark in use and reputable, pre-existing rights) of the Trademark Law. The existing trademark opposition system has no limitation on qualification of the opponent, so that anyone can raise an opposition on a trademark application with any reason, which may lead to the abuse of the opposition and result in that the opposed trademark cannot be registered in time.

The Trademark Office shall examine the trademark registration opposition, and then directly make a decision of approval or rejection of registration. If the Trademark Office doesn’t affirm the opposition but approves the registration, it shall issue the Trademark Registration Certificate, and shall make a publication thereon. If the opponent is dissatisfied with the decision of the Trademark Office, he/she may claim for relief through filing an application for declaration on invalidity of the registered trademark before the Trademark Review and Adjudication Board. If the Trademark Office affirms the opposition and does not approve the opposed mark, the opposed party may apply for review before the Trademark Review and Adjudication Board

The amended Trademark Law improves the opposition system and may help reduce the filing of malicious opposition and the behavior of abusing the opposition procedure.

  1. To add to the registration of sound trademark

In the United States, Australia, the European Union, and other countries and regions, there are precedents of sound trademark. For example, the "Intel inside musical jingle" of the American Intel Company, and the sound of lion’s roar of the American Metro-Goldwyn-Mayer Company. Article 8 of the amended Trademark Law provides that any signs, including words, devices, letters, numbers, three-dimensional marks, color combinations, sounds, and combinations of the aforesaid elements, which are capable of distinguishing goods of one natural person, legal person, or other organization from those of another, can be registered as trademarks through application.

That the amended Trademark Law brings sound into the list of trademarks fully reflects trademark’s basic function of distinctiveness, fully admits the experience of other countries on protecting sound trademark by legislation, provides legal protection on the owners of sound trademark, and also protects the legal rights of customers who buys goods with recognition of sounds. The Trademark Office still needs more time to do preparation work, to establish supporting examination system, and to technically solve the problem on recording modes, audio formats, duration, search and storage mechanisms, and so on.

  1. A trademark renewal application can be filed within one year prior to the expiration of validity term

Where a registered trademark needs to be used after the expiration of its validity term, the registrant shall file a renewal application within 12 months prior to the expiration of validity term. If an application fails to be filed within the period, a 6-month grace period shall be granted. The existing Trademark Law provides a 6-month period for filing a renewal application, and but the amended Trademark Law allows more time for the registrant to apply for registration renewal, which helps avoid cancellation of trademark registration that may cause by ill management, or negligence on renewal application.

  1. It distinguishes the declaration of invalidation on trademark and trademark cancellation.
  1. To establish the procedure for declaration of invalidation

Firstly, as for the procedure for declaration of invalidation raised on absolute conditions, if a registered trademark violates Article10 (legality), Article11 (distinctiveness), or Article12 (functionality) of the Trademark Law, or for which registration was obtained by deceptive or other improper means, the Trademark Office shall declare the invalidity of the registered trademark. Other organizations and individuals may file a request with the Trademark Review and Adjudication Board for a decision to declare the invalidity of the registered trademark.

Secondly, as for procedure for declaration of invalidation raised on relative conditions, if a registered trademark violates paragraph 2 and paragraph 3 of Article 13 (well-known trademark), Article 15 (principal’s trademark), paragraph 1 of Article 16 (geographical indication), Article 30 (pre-existing trademark), Article 31 (applications filed at the same time by two or more applicants), Article 32 (pre-existing mark in use and reputable, pre-existing rights) of the Trademark Law, the pre-existing trademark owner or an interested party may, within 5 years of the trademark registration date, file a request with the Trademark Review and Adjudication Board for a decision to declare the invalidity of the registered trademark. In the case of malicious registration, the owner of the relevant well-known trademark shall not be subject to the 5-year time limit.

Thirdly, the registered trademark that was declared invalidity shall be published thereon by the Trademark Office, and the exclusive right to use this registered trademark shall be deemed non-existent from the beginning.

  1. To define the procedure of cancellation

Where the registered trademark becomes the generic name of the approved goods which can use the trademark, or where, without a reasonable excuse, the use of the registered trademark has ceased for three consecutive years, any organizations or individuals may file a request to the Trademark Office for cancellation of the registered trademark. The cancelled registered trademark shall be published thereon by the Trademark Office, and the exclusive right to use this registered trademark shall be terminated from the date of publication.

The existing Trademark Law does not distinguish the invalidity and cancellation, which were both called cancellation. According to foreign trademark laws and principles of law, cancellation of trademark is made due to facts and causes occurred after registration. For example, the trademark becomes generic name, nonuse or improper use of the trademark, and so on. Comparatively, declaration of validity is caused by defects existing when the trademark is registered. For example, the trademark is lack of legality, distinctiveness, functionality, or it conflicts with a pre-existing right, and so on.

Besides the cancellation on the condition that the use of the registered trademark has ceased for three consecutive years without a reasonable excuse, it is worth noting that pursuant to the amended Trademark Law, if the registered trademark becomes the generic name of the approved goods, any organizations or individuals may file a request to the Trademark Office for cancellation of the registered trademark.

  1. It regularizes the market competition behavior.
  1. To clarify the well-known mark

The amended Trademark Law provides that producers and operators are not allowed to put words of “well-known mark” on goods, packaging or containers of goods, nor shall they use words of “well-known mark” in the advertisements, exhibitions or other commercial activities. To clarify the protecting system of well-known marks, the amended Trademark Law follows the principle of “case by case, passive protection”, explicitly stipulates that only after the party concerned in a trademark case has applied for protection of his/her well-known mark shall the Trademark Office, the Trademark Review and Adjudication Board or the court apply the relevant provisions, and the decision effective to the very case per se.

In the practice of the existing Trademark Law, a phenomenon has occurred that a well-known mark has been taken as a symbol of reputation or social status. Enterprises and regional governments blindly chase recognition of well-known marks, and some of them even falsify for it. The amended Trademark Law prevents advertising in the name of well-known marks, which avoids misleading customers. Where the producers or operators advertise in the name of well-known marks, the local Administrative Department for Industry and Commerce shall have them make corrections, and shall impose a fine of 100000 RMB.

  1. To limit the filing for trademark registration in bad-faith

The amended Trademark Law prevents malicious filing for trademark registration by using business relationship. Where the trademark applied for registration on identical goods or similar goods is identical with or similar to a pre-used unregistered trademark, and the applicant has contract or business contact or other relationships with the owner of the pre-used trademark, which makes him/her fully aware of the existence of the pre-used trademark, if the owner of the pre-used trademark raises an opposition, the trademark shall not be registered. This provision shows that trademark is legally protected for being used, and restricts malicious filing for trademark registration in bad-faith through the opposition procedure.

  1. To prevent the behavior of using trademark of others as enterprise name

The amended Trademark Law provides that where a registered trademark or an unregistered well-known trademark owned by other people is used in the name of an enterprise, which may mislead the public and commits unfair competition, the Anti-Unfair Competition Law of the People’s Republic of China shall apply. This provision obviously helps to prevent taking free ride of reputation of other’s brands.

  1. To bring in the principle of honest and credibility

The application for registration or use of trademark should follow the principle of honest and credibility. This provision is to prevent trademark applicants who are fully aware of or should have known the pre-used trademark, for purpose of commercial profits, violate the principle of honest and credibility, prejudice legal interests of others, disturb fair-competing market order, and use improper means to apply for registration of a pre-existing trademark.

  1. It strengthens the protection on the exclusive right to use trademark.
  1. To define likelihood of confusion as a standard of infringement

The amended Trademark Law provides that without permission of the trademark registrant, where a similar trademark is used on identical goods, or where an identical or similar trademark is used on similar goods, which may be likely to cause confusion, a trademark infringement shall be defined. Obviously, it is a progress to legislatively define the likelihood of confusion as a standard of infringement.

  1. To increase administrative punishment

The amended Trademark Law provides that if the Administrative Department for Industry and Commerce defines that a trademark infringement is committed and the amount of profits made from the infringement is more than 50,000 RMB, a fine less than 5 times the profits may be imposed. If no profits have been made, or the profit is less than 50,000 RMB, a fine not more than 250,000RMB may be imposed. If one commits trademark infringement for more than two times within 5 years, or there are other serious circumstances, a more severe punishment shall be applied.

  1. To increase the amount of infringement compensation

The amount of damages for infringement of the exclusive right to use a trademark shall be determined according to the losses suffered by the infringed party caused by the infringement. If it is hard to determine the losses, it can be determined according to the benefits gained by the infringing party. If it is difficult to determine the amount of the losses suffered by the infringed party or the benefits gained by the infringing party, the amount of damages can be reasonable times of the trademark license royalty. As for malicious infringement on the exclusive right to use a trademark, if the circumstance is serious, the amount of compensation may be more than one time and less than three times of the amount determined above. The reasonable expenses caused when the trademark owner tries to stop the infringement should be included in the amount of damages.

  1. To increase the statuary damage

If it is difficult to determine the amount of losses suffered by the infringed party, or of the benefits gained by the infringing party, or the trademark license royalty, the court shall, considering the circumstance of the infringement, render a judgment awarding damages no more than 3,000,000 RMB.

The amended Trademark Law strengthens punishment on infringement, which shows on the increase of the amount of the administrative fine, the damages, especially the punitive statuary damage.

  1. To mitigate the obligee’s burden of proof

Given that the trademark owner has tried his/her best to prove the infringement, while the infringing party mainly controls the account books and other relevant materials, on purpose of determining the amount of damage, the court shall order the infringing party to provide the relevant account books and other materials. If the infringing party refuses to provide or provides false account books and other materials, the court shall determine the amount of damage according to the trademark owner’s claim and proof. The amended Trademark Law greatly mitigates the trademark owner’s burden of proof in trademark infringement.

  1. It regularizes the behavior of trademark agencies.
  1. To define the legal responsibility of the agencies

The amended Trademark Law provides that trademark agencies should follow the principle of honest and credibility, comply with the laws and regulations, and deal with trademark registration applications or other things related to trademarks according to the authorization of the principal. The trademark agencies should keep all commercial secrets received from the principal as secret and confidential. If there exists a circumstance that the trademark that the principal intends to apply for registration is legislatively not allowed, the trademark agency should definitely inform the principal. If the trademark agency knows or should have known that the trademark that the principal intends to apply for registration complies with circumstances provided in Article 15 (Principal’s trademark) and 32 (pre-existing mark in use and reputable or pre-existing right) of the Trademark Law, the trademark agency shall not accept the authorization. Except for application of trademark registration on the authorized services, the trademark agency is not allowed to apply for registration of other trademarks. These newly added provisions provide guides and limitations on the behavior of trademark agencies.

  1. To establish the good faith file for trademark agencies

The amended Trademark Law brings in the credibility record system, and the above illegal activities shall be recorded in the file. Where the circumstance is severe, the Trademark Office or the Trademark Review and Adjudication Board may also decides to stop accepting applications raised by this trademark agency, and shall make a publication thereon.

The amended Trademark Law shows the legislative measures and progress on solving problems that the trademark registration procedures are cumbersome, that the examination of trademark confirmation cases and authorization cases costs too much time, that the phenomenon of malicious registration often happens, that trademark infringement is hard to prevent, and so on. However, inadequacies still exist, such as lack in provisions on well-known marks and anti-dilution, and prohibition of use of well-known mark in other manner than advertisement, use of trademark in the Internet, etc.. In conclusion, the amended Trademark Law can basically help resolve main problems occurring in the trademark field in recent years, and will provide sufficient legal ground in trademark practice, confirmation and authorization of trademark, and strengthen the protection on trademarks.