The Trademark Law of the People’s Republic of China, amended for the third time, has become effective as of May 1st, 2014. This article aims at probing into the provisions and changes thereof in relation to the recognition and protection of well-known trademarks.
- Changes in major legal provisions
The new Trademark Law includes some specification and clarification which were previously indicated in the former Implementation Regulations of the Trademark Law and Regulations on Determining Well-known Trademarks, which provides legal bases for the recognition and protection of well-known trademarks.
On the basis of the old law, definition of “well-known trademark” is added in Article 13 of the new Trademark Law: Where the holder of a trademark, which is well known to the relative public, deems that his rights to the trademark is infringed, he may request the protection of the trademark as a well- known trademark in accordance with the stipulations of this law.
Some new contents are added in Article 14 of the new Trademark Law: A well-known trademark shall, upon the request of the party concerned, be determined as one fact to be cognized in dealing with trademark related matters. The procedure of determination and the competent authorities in charge are also clearly specified in Article 14, which are the Trademark Office in the procedure of examining trademark registration or investigating and prosecuting the infringement of the exclusive right to use a registered trademark by the administrative authority for industry and commerce, the Trademark Review and Adjudication Board in handling trademark disputes, and the courts designated by the Supreme People’s Court in hearing civil or administrative trademark cases.
- Recognition of well-known trademarks under the new Trademark Law
- Principles of recognition
Pursuant to Article 13 of the new Trademark Law, principles of recognizing well-known trademarks may be summed up as passive protection, case-by-case recognition and necessity check. By Passive protection, only when a dispute over registration or use of a trademark occurs, can the trademark owner request the recognition and protection of his trademark as a well-known trademark, and the authorities do not actively recognize a mark as well-known but make examination and recognition upon the request of the mark owner. Case-by-case recognition means that the recognition of a well-known trademark shall be carried out in a specific case and the fact that a mark is recognized as a well-known trademark in one case does not mean that it shall consequently be recognized as well-known in other cases. Necessity check means that the competent authorities shall decide whether or not to examine a party’s request for recognition of a well-known trademark according to the need of the case.
One question concerning the necessity check recognition is how the competent authorities define “the need of a case”. In practice, the competent authorities generally will not make determination on whether a mark is well-known or not if the mark can be protected by other applicable provisions. In an opposition, for example, the opponent claims that the opposed mark is a reproduction, imitation or translation of his registered well-known trademark and thus violates Article 13 of the Trademark Law, and meanwhile, the opposed mark constitutes a similar mark on similar goods with his prior registered mark and thus violates Article 30 of the Trademark Law (Article 28 of the old law). If the Examiner holds the view that Article 30 is well grounded, he or she will no longer examine the request for recognition of a well-known trademark filed by the opponent pursuant to Article 13.
In other circumstances, however, the competent authorities, without examining whether the prior trademark is well-known or not, would adjudicate that the disputed mark has some differences from the prior trademark and is not likely to mislead the public and therefore does not violate Article 13 of the Trademark Law. It is possible that the competent authorities think that, even if the prior trademark is recognized as a well-known trademark, it will not support the claim of confusion and misleading and therefore it is not necessary to examine the request for recognition of a well-known trademark. However, this is not in compliance with the principle of “necessity check recognition”, because whether the prior mark is well-known or not has substantial influence on whether or not the disputed mark would give rise to confusion and mistaking, therefore, the precondition based on which Article 13 of the Trademark Law is applicable is that the prior mark is a well-known trademark, and that only on the basis of recognition of the well-known status of a mark can judgment be made. In respect of this issue, the Beijing Higher People’s Court issued on January 22, 2014 Guidelines for Trial of Administrative Cases Involving Granting and Determination of Trademark Rights, which provides that in making judgment on whether a trademark under dispute shall not be registered or used according to Paragraph (2) or (3) of Article 13 of the Trademark Law, whether the trademark for which protection is requested has already become well-known shall in principle be determined firstly; once it is determined, then whether the trademark under dispute is a reproduction, imitation or translation of the well-known trademark shall be judged; and finally, whether the trademark under dispute is likely to cause confusion and mislead the public and thus may cause damages to the interests of the owner of the well-known trademark shall be determined.
- Factors considered in determining well-known trademarks
Article 14 of the new Trademark Law provides for the factors that shall be considered in determining whether or not a mark is well-known, including reputation of the trademark in the relevant sector of the public, the duration of the use of the trademark, the duration, degree, and geographical scope of any publicity for the trademark, history of protection of the trademark as a well-known trademark, and other factors contributing to the reputation of the mark.
No change is made to the above factors in comparison with the old trademark law. In practice, major economic indicators such as market share, sales volumes, sales territory, profits and taxes, and advertising expenditure, etc. are generally required. The evidence shall be sufficient to prove that the mark is well-known in China before the application date of the disputed trademark.
Besides, it is stipulated, in the Guidelines for Trial of Administrative Cases Involving Granting and Determination of Trademark Rights issued by the Beijing Higher People’s Court on January 22, 2014, that the time points of the relevant evidence shall be prior to the application date of the disputed mark. Meanwhile, the Guidelines have also stipulated that the evidence submitted by the party concerned, which shows that the prior trademark is recognized as a well-known trademark after the application date of the disputed mark and can prove that the prior trademark has become well-known before the application date of the disputed mark, shall be adopted. This will consequently reduce, to some extent, the burden of proof of the party concerned in similar cases.
- Protection and use restrictions under the New Trademark Law
- Extended protection on goods / services
Paragraph 2 of Article 13 of the new Trademark Law provides for the protection of a well-known trademark unregistered in China, the scope of which covers identical or similar goods. Paragraph 3 provides for the protection of a well-known trademark which has been registered in China, the scope of which covers different or dissimilar goods. These provisions are corresponding to paragraphs 1 and 2 of Article 13 of the old law, with the same contents.
In practice, what the owner of a well-known trademark cares most is the protection of a registered well-known trademark on different or dissimilar goods, namely the so-called “cross class protection”. The factors to be considered are basically whether the trademark under dispute is a reproduction, imitation, or translation of the prior registered well-known trademark, which may mislead the public and cause damage to the interests of the owner of the well-known trademark. The examination and determination might be subjective to some extent, as it is difficult for the owner of the well-known trademark to provide evidence in respect of these factors and there are not strict standards as to how to determine “reproduction, imitation or translation” of a well-known trademark, on what goods/services shall broader protection be given and how to prove and determine “likely to mislead the public and damage the interests of the owner of the well-known trademark”.
- Extended protection period
Article 45 of the Trademark Law stipulates that where the registration of a trademark has been made in bad faith, the owner of a well-known trademark shall not be bound by the five-year time limit for filing invalidation action against it.
- Protection on trade names
Article 58 of the Trademark Law stipulates that any act of using a registered trademark or a non-registered well-known trademark of another person as the trade name of an enterprise name shall constitute an act of unfair competition and shall be dealt with in accordance with the Anti-unfair Competition Law of the People’s Republic of China, which provides the legal basis on which a well-known trademark copes with a trade name.
- Use restrictions
Article 14 of the new Trademark Law stipulates that the producers and the business operators shall not use the words “well-known trademark” on goods, packages or containers of the goods, or use the words in advertising, exhibition or any other business activities, and Article 53 of the new law stipulates that violation of the use restriction is subject to injunction and monetary penalty. This will help to prevent well-known trademarks from being abused as a promotional tool and to bring well-known trademarks back on the right track.
To sum up, the new Trademark Law clarifies the competent authorities, procedures and principles of recognizing well-known trademarks, regulates the use of well-known trademarks, and protects well-known trademarks in a broader scope, which helps to improve the protection of the rights and interests of the owners of well-known trademarks and the interests of consumers as well, maintain the fair market order and thus promote the development of the market economy.