On August 30, 2013, the Standing Committee of the National People's Congress passed the Amendment to the Trademark Law (the “Amendment”). The Amendment will become effective on May 1st, 2014. Some key changes are as follows.
- Sounds can be registered as trademarks. (Article 8)
The Amendment does not provide specifically for the tests of the capacity for registration of sound marks. As such, sound marks should satisfy the general absolute and relative registration requirements that apply to other kinds of marks.
- Multi-Class applications will be made available. (Article 22)
This will ease administrative work in relation to trademark portfolio management. We have yet to know whether and how the official filing fees will be adjusted accordingly. It can be expected that the costs for applying for and renewing trademark registrations should be reduced.
- Trademark applications can be filed electronically. (Article 22)
The practice of e-filing has been in operation but it is now expressly provided for in the Amendment. Notably, to file an application electronically, the specification must consist of standard descriptions of goods/services and no priority claim can be made. It remains to be seen if the online services will be enhanced by May 1st to allow for non-standard items and priority claims.
- An application to renew a registration can be filed 12 months before the expiry date. (Article 40)
Currently, the application to renew can be filed 6 months in advance.
Assignment of Families of Marks
- When assigning a mark, other similar marks for identical goods or identical/similar marks for similar goods would need to be assigned at the same time. (Article 42(2))
Prohibition on the exploitation of Well-known Mark Status
- It is not permitted to use the wording “well-known mark” on products, product packaging or containers or in advertisements, exhibitions or other commercial activities. (Article 12(5))
This prevents companies from taking advantage of the well-known mark recognition and this may discourage certain trademark owners from unnecessarily seeking the well-known mark status. The Amendment makes it clear that the declaration of a mark being well-known can be sought when there is a dispute as to the registration or use of a mark.
Bad Faith Applications
- The registration and use of trademarks should follow the principles of honesty and trustworthiness. (Article 7)
- Article 15(2) prohibits the registration of the other person’s unregistered mark that has been previously used on identical or similar goods, where there is evidence showing that the applicant has clear knowledge of that other person’s mark through contractual, business or other relationships.
- Trademark Agencies have a duty to act in accordance with the principles of honesty and trustworthiness (Article 19(1)), and except for applying for registration of the mark for its agency service, trademark agencies shall not apply for registration of any other marks. (Article 19(4))
- Specific time-limits are set for the Chinese Trademark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB) to examine cases:
Click here to view table.
The above time-limits are a vast improvement from the current practice, but the only question is whether the quality of the decisions will be compromised by such quantitative performance targets.
- The opponent who relies on relative grounds must be the owner of the earlier right or an interested person. Any person may file an opposition on the absolute grounds under Articles 10, 11 and 12. (Article 33)
- If CTMO rejects the opposition, the mark will be registered. The opponent may file an application with TRAB to invalidate the registered mark. (Article 35(2))
- With this amendment, the opponent can no longer file a Review with TRAB so that the opposed mark will remain unregistered. This could cause great difficulty to brand owners who are unable to register their own marks in the PRC because of prior bad faith applications. If brand owners are unable to oppose the bad faith applications, they would run the risk of trademark infringement if they use their marks in the PRC.
- If the CTMO allows the opposition, the applicant may file a Review on opposition with TRAB and TRAB’s decision can be further appealed to the court. (Article 35(3))
- Any person may file a cancellation against a registered mark if the mark has become a generic name of its designated goods/services. (Article 49(2))
To prevent the dilution of the distinctiveness of one’s registered mark, the right owner should use the symbol “®” alongside the registered mark, monitor the use of the mark in the market, especially in not using the same as a noun and enforce against infringements.
- In a Review on opposition, if the earlier right needs to be determined on basis of the decision of the court or the administrative authority in another case, the Review can be suspended. The proceedings can be restored when the reason for the suspension no longer exists. (Article 35(4))
- In an invalidation handled by TRAB, if the earlier right needs to be determined on basis of the decision of the court or the administrative authority in another case, the invalidation can be suspended. The proceedings can be restored when the reason for the suspension no longer exists. (Article 45(3))
- In an AIC action; if there is a dispute on the trademark right ownership or the right owner has also taken out a trademark infringement action with the court, AIC may suspend the action. The proceedings can be restored when the reason for the suspension no longer exists. (Article 62(2))
Act of Infringement
- A person is liable for trademark infringement if they intentionally facilitate the trademark infringement of another person. (Article 57(6))
The existing Article 50(2) of the Implementing Regulations of the PRC Trademark Law contains a similar provision and Article 50(2) specifically sets out such acts of facilitation as storage, transportation, postage, concealment etc. It remains to be seen whether the new Article 57(6) would cover any other acts of facilitation.
- The use of another person’s well-known trademark as a trade name which misleads the public amounts to unfair competition and shall be dealt with pursuant to the Anti-Unfair Competition Law. (Article 58)
More Severe Punishment against Trademark Infringement
- Punitive damages are available where the infringement is “serious”. The amount would be one to three times the plaintiff’s loss or the defendant’s gain or the licensing fee (if any). (Article 63(1))
- The Amendment increases the maximum amount of statutory damages from RMB500,000 (US$80,000) to RMB3,000,000 (approximately US$485,000). (Article 63(3))
- In AIC action, the AIC may impose a fine equal to five times the illegal turnover, if the turnover is more than RMB50,000. Where the turnover is less than RMB50, 000 or there is no illegal turnover, the AIC may impose a fine no more than RMB250,000. More severe penalty will be imposed if the infringement is repeated (twice or more) in five years or the circumstances of the case are “serious”. (Article 60(2))
The above are examples of the PRC’s efforts to try to curb trademark infringement.
Burden of Proof in Determination of Damages
- For determining the amount of damages and where the plaintiff has already adduced evidence to the best of their ability and the relevant account books and materials are in the control of the defendant; the court may order the defendant to submit the account books and materials in relation to the infringement. If the Defendant refuses to do so or provides false account books and materials, the court may determine the amount by reference to the plaintiff’s claim and evidence. (Article 63(2))
- The Amendment defines trademark use as follows:-
- Where damages are sought in the case of trademark infringement and where the defendant alleges that the registered mark has not been used; the court may require the plaintiff to produce evidence of use for the three preceding years. If there is no evidence of use and there is no evidence that there is loss as a result of the infringement, no compensation will be granted even if infringement is found. (Article 64)
- If, before the filing date of a registered mark, another person has used an identical or similar mark for identical or similar goods and the mark has acquired a certain level of influence, the registered mark owner does not have the right to stop that other person from using the mark in the original scope, but may ask that other person to use an additional sign to distinguish the marks. (Article 59(3))
There is still some uncertainty in the implementation of the amendments. We expect that the Implementing Regulations of the Trademark Law will be revised. In time, with the whole new trademark regime in place and operating, we would see if the PRC’s efforts in furthering intellectual rights protection are fruitful.