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China Amends Trade Mark Law 08 Oct 2014

In August 2013, China’s Standing Committee of the National People’s Congress, the country’s highest legislative body, made their third amendment to China’s Trademark Law. The amendment, which comes into effect on May 1, 2014, makes a number of important changes for those looking to register their trade marks in China. These changes include:

Time Limits

Procedurally, one of the most important changes is the introduction of time limits to respond for the Chinese Trademark Office (CTMO). Currently, the law imposes no time limits for the CTMO to respond and, as a result, trade mark registration in China can be, and often is, a lengthy process. Under the new law preliminary examinations will be determined in 9 months while oppositions are to be determined in 12 to 18 months. 

The introduction of time limits should greatly reduce the potential time it takes to register a trade mark in China. Furthermore, the time limits introduce an element of certainty for trade mark applicants, providing a clearer timeline for trade mark applications.

However, it should be noted that China’s desire for faster trade mark prosecution comes at a cost.  Deadlines for responding or filing with the CTMO has been shortened considerably. The deadline for responding to office actions issued by the CMTO will be reduced from 30 days to 15 days. The deadline for filing supplemental evidence and submissions in support of an opposition or a review of a refused application will be shortened from 3 months to 30 days. These new time frames impose significant time pressures on those wishing to file or oppose Chinese trade mark applications.

Multi-class and electronic filing

The new legislation codifies a number a practices that are already slowly becoming features of Chinese trade mark applications.

Under the new legislation, multi-class filings will be allowed. Under the current law (excluding filings made through the Madrid Protocol), if the goods or services sought for registration fall into more than one class then separate applications must be made for each class. The introduction of this rule will result in fewer filings and a more simplified process for those wishing to file in multiple classes.

While already currently possible, the new law recognises electronic filing as an acceptable way of filing applications.

Trade mark infringement

The new law significantly raises the amount available for statutory damages for trade mark infringement within China. Damages are generally to be linked to actual loss; however punitive damages have also been introduced where infringement is intentional and serious. Furthermore, where damages calculation is impractical or difficult, judges have discretionary power to award damages of up to 3 million CNY (approximately NZ$600,000).

Interestingly, the new law provides a defence to damages if the trade mark owner has not used the mark three years prior to date of filing an action based on infringement.

Bad faith issues

The new law introduces new mechanisms to deal with acts of bad faith, particularly in situations where the infringing parties have a pre-existing relationship with the rightful owner of the trade mark. Applications made where a pre-existing relation exists or the applicant should have known the trade mark is owned by another will be refused.

Infringement defence

The new laws introduce a defence for alleged infringement. Where a trade mark owner cannot show use of a registered trade mark in the past three years and damages cannot be evidence, the infringer will not be liable for any damages.

Well-known trade marks

The term “well-known trade mark” is frequently in China as a laudatory phrase, implying quality goods or services. The new law prohibits all use of the term on all products, packaging and advertisement. This even extends to trade marks that have been judicially determined to be “well known”.

Conclusion

On the whole the amendments are step in the right direction, once effected in May 2014.

The reality remains that registering, defend and enforcing your trade mark rights in China can be a time-consuming, overly-bureaucratic and costly process. However, the new amendments, in particular the new timeframes for examination, give an added certainty to the registration process that has been missing from the Chinese trade mark scene until now.

However, the reduced response time frames for responding to the CMTO put significant pressure on Applicants and Opponents to be prompt and vigilant. The issues involved in registering, defending and enforcing trade marks in China underline the need to obtain sound legal and business advice prior to entering the Chinese market. 

Zone Law can assist you in registering, defending and enforcing your trade marks in China.

Daniel Nicholson, Lawyer