In order to promote the implementation of brand strategy and regulate the activities of brand evaluation and protection in the commercial field, the Ministry of Commerce (MOFCOM) issued the Measures on the Evaluation and Protection of Brands in Commercial Sector (Trial) (the “Measures”) on 8 January 2007, which took effect on the same day.

The Measures mainly provide following issues:

1. Application Criteria

The applicants shall meet the following conditions:

i) the applicant shall be legally incorporated and validly existing within China, and also have good economic and social performances;

ii) the brand applied for shall be created within China, its ownership shall belong to the applicant; it shall have been used for three (3) years or more and also have been registered as a trademark or under legal protection with similar effect in the major domestic or overseas markets. The brand shall be first registered in China;

iii) the brand shall also have rather strong competitiveness, influence, and fairly high popularity, whose quality reaches the leading level of China or the advanced level of the world.

2. Application and Granting Procedures

According to the Measures, MOFCOM shall conduct the evaluations periodically and issue a notice stipulating the scope, procedures, and time limit of the current evaluation in advance. The applicant shall fill in the application documents truly and submit authentic, effective, and integrated evidential materials and necessary channels for verification to competent department of commerce of the place where it is located or the relevant industrial organizations before the prescribed time limit.

The local competent department of commerce or industrial organizations shall examine and verify the authenticity, effectiveness, and integrity of the application materials and file the said materials together with its opinions to MOFCOM within the prescribed time limit.

MOFCOM shall establish several expert working groups to examine and evaluate the participating brands and entrust professional organs and public media to conduct social investigation on the participating brands.

Then, MOFCOM shall publicize the list of bands to be evaluated to the public, grant corresponding brand name and brand mark use right to an enterprise in light of the publication situation, and publicize the relevant situation to the public.

3. Brands Use and Protection

According to the Measures, a brand evaluated and recognized by MOFCOM could be transferred, pledged, evaluated and contributed as investment and should be filed with MOFCOM within 30 days.

The Measures provide that where the actual control power of the enterprise that owns a brand evaluated and recognized by MOFCOM is transferred because of merger and acquisition, the parties concerned shall report the situation to MOFCOM. The Measures, in view of different situations, provide various ways to deal with infringements to the intellectual property rights of the brand enterprises or any violence of the provisions of the Measures.

Furthermore, the Measures also provide that MOFCOM shall establish a pre-warning system and an service platform for the overseas protection of intellectual property rights to strengthen the brands protection abroad.