In August 2007, the Chinese Trade Mark Office (CTMO) circulated its draft changes to the Trade Mark Law for comments. According to this draft, there will be substantial changes to the current law, including the following proposals to expedite application and registration procedures:

• There is no examination on similarity with prior marks such that an application will not be rejected by relative grounds of refusal;
• Opposition proceedings are to be initiated at the Trade Mark Review & Adjudication Board (TRAB), cutting the number of opposition proceedings at the administrative level from two (from the CTMO and on review to the TRAB) to one;
• Trademark examination must be completed within 12 months; and
• The TRAB has the discretion to issue a decision directly without notifying the opposed party if it believes that the opposition grounds are untenable.

To discourage unjustified oppositions and invalidations CTMO has proposed that the losing party to an opposition or invalidation be liable to pay to the winning party its reasonable costs incurred. In addition, the losing party conducting an opposition in bad faith is liable to compensate any loss suffered by the other side.

Concerns about tight deadlines have also been addressed to some extent. Foreign applicants are given an extra 30 days to respond to an office action for correction, making it 60 days. The time period for filing a review on a refusal of an application is extended from 15 days to 30 days.

The current law has serious limitations on sanctions against bad faith use and registrations. Unregistered owners have little protection. Means to tackle these include introducing good faith principles such that trade mark applications and use must conform to the principles of honesty and trustworthiness. Stating that the owner of an unregistered mark need not prove reputation of its mark and bad faith on the part of the applicant to prevent registration of the same or a similar mark in respect of the same or similar goods – proof of bad faith alone will suffice. For a mark intended to be registered in respect of dissimilar goods, the owner need only prove that his mark is somewhat reputable, as opposed to well known, provided that that there is a likelihood of confusion.

The owner of an unregistered mark is given other protection. He is entitled to recover damages from a malicious infringer. Moreover, prior use of a mark is a valid defence to infringement even though the mark is not registered. Statutory damages for infringement are raised from the maximum of Rmb500,000 ($68,000) to Rmb1 million ($135,000).

Other miscellaneous changes include:

• Rules regulating trade mark agencies will be introduced by the State Council;
• Trade marks will include sounds, scents, motions, and combinations thereof;
• Multi-class applications in a single document will be allowed;
• Trademark registration certificates will only be issued upon request;
• The winning opposing party in a trademark opposition may request that the mark in question be directly transferred to him, thus saving time and costs of refiling;
• Recordal of licence is no longer mandatory, but is still recommended because an unrecorded licence may not be used against a third party acting in good faith. In addition, production of a licence contract (and hence a Chinese translation if in a foreign language) will no longer be required; and
• Dilution of the distinctiveness of a well-known mark is a ground for prohibiting the use or registration of a mark.

Howard Tsang

Wilkinson & Grist
6/F, Prince’s Building, 10 Chater Rd
Central, Hong Kong
Tel: +852 2524 6011
Fax: +852 2520 2090
iprop@wilgrist.com
www.wilgrist.com