China, Sweden and New Zealand have all amended their trade mark laws or made proposals to do so in the past few months. The news was good for patent owners in the latter two countries, but less so in China. The latest draft of amendments to its Trade Mark Act disappointed brand owners, who had hoped that officials would use the law to get tougher on bad faith registrations.
A section introducing the principle of good faith was removed and the right to appeal an unsuccessful opposition to a bad faith trade mark application taken away. "It seems like they went back to the drawing board and removed a few provisions that were slightly controversial," said Deanna Wong, a partner of Hogan Lovells.
China passed its Trade Mark Act in 1982 and amended it in 1993 and 2001. Attempts to pass a third set of amendments have proved contentious, and various drafts have been circulating since 2006.
A 2009 draft from the State Administration for Industry and Commerce was hailed by brand owners as "very positive", given that it would allow brand owners to apply to register more non-traditional trade marks, make multiple class applications and increase statutory damages from Rmb500,000 to Rmb1 million ($78,000 to $156,000) .
While these provisions have been retained in the latest draft (although provisions on smell marks have been removed), brand owners say the latest draft is a step backwards when it comes to dealing with bad faith trade marks.
China is a first-to-file jurisdiction. Low filing fees have led to the problem of so-called trade mark squatters filing trade marks covering foreign brands that have either not yet protected their rights in China or have not filed in enough subclasses. Opposing these applications or trying to cancel a successful registration can be time consuming, and foreign brand owners often end up paying to settle cases.
Apple and Land Rover
The highest profile example of this involved Apple paying $3.65 million to recover the iPhone trade mark after it had filed a mark, but not in the correct subclass. Some people believe that the publicity surrounding this payment has led to trade mark squatters increasing the amount of money they ask for.
British car maker Land Rover has also faced a long and expensive battle to recover a trade mark that it was using, but which was registered first by Chinese rival Geely.
"Bad faith registrations are still a huge problem," said Wong. This is particularly true for a number of small- and medium-sized businesses that are now trying to move into China's domestic market for the first time, but are finding their way blocked, she said.
George Chan, a partner of Rouse in Beijing, said that the section dealing with good faith may have been removed because that phrase is a novel concept in China, although he described this as "throwing the baby out with the bathwater".
Fewer appeals
In a further blow to brand owners, the latest draft streamlines the process available to oppose bad faith trade mark marks.
Under the present system, a brand owner can oppose an application made in bad faith at the Chinese Trade Mark Office (CTMO). If unsuccessful it can then appeal to the Trade Mark Review and Adjudication Board (TRAB) and then to the courts.
But, under the latest draft, if an opposition at the CTMO is unsuccessful, the mark is granted and the brand owner then has to file a revocation action at the TRAB.
Trade mark owners argue that this change is driven primarily by the SAIC's desire to reduce the backlog of oppositions and appeals at the CTMO and TRAB. They argue that trying to revoke a granted trade mark is more difficult than opposing an application, and are worried that trade mark squatters will be able to assert their registered mark immediately.
The language protecting owners of well-known marks has also been weakened in the draft. The previous draft said that an infringing mark had to be "identical or similar" to the well-known mark in question, but the threshold has now been raised so that an infringing mark must be a "copy, imitation, or translation".
Other complaints mentioned by brand owners include a requirement that a brand owners has to provide evidence of use of a mark in the previous three years before it can make a claim for compensation.
"I do not think these trade mark law amendments have gone as far or have dealt with as many issues of concern to foreign brand owners as the patent law amendments did for foreign patentees," said Chan.
New Zealand: Good news on counterfeits |
In addition to paving the way for entry to the Madrid Protocol, New Zealand's latest amendments to its Trade Mark Law will help the country crack down on counterfeits. After three years in Parliament, the Trade Marks (International Treaties and Enforcement) Bill was split into two bills – the Trade Marks Amendment Bill 2008 and the Copyright Amendment Bill No 2. Both passed their third reading with cross-party support and were expected to receive royal assent in September. "This law sends a strong message that New Zealand is not an easy target for illicit trade in counterfeit goods and pirated works," said Simon Power, New Zealand's Minister for Economic Development. The Bill gives new powers to the National Enforcement Unit of the Ministry of Economic Development and the Customs Service to investigate and prosecute people involved in the manufacture, importation, and sale of illegal goods. Amendments include allowing Customs to take action without requiring notice from a brand owner. "It's a very interesting development," said Sheana Wheeldon, a partner of Kensington Swann, who said it will make it easier for the criminal provisions in the Trade Mark Law to be invoked. The amendments also make it harder for brand owners to deter parallel imports. The law now states: "A registered trade mark is not infringed by the use of the trade mark (including use for the purpose of advertising) in relation to goods that have been put on the market anywhere in the world under that trade mark under any 1 or more of the following circumstances: (a) by the owner; (b) with the owner's express or implied consent: (c) by an associated person of the owner." The "associated person" section has been added to prevent brand owners restricting parallel importation by transferring the mark to the local distributor and claiming infringement. "There will be no ways of escaping the parallel importation defence to infringement," said Wheeldon. In addition to paving the way for New Zealand to join the Madrid Protocol, the Bill also allows New Zealand to join the Singapore Treaty and the Nice Agreement. Trade marks registered in New Zealand before 1941 will need to be reclassified. Licensees will no longer be able to voluntarily their licences against trade marks. Existing entries will be removed when the Bill comes into force. IPONZ has stated that it will "announce an enactment date for the Bill and a consultation timetable for the regulations in due course". |
Sweden: New law creates delays |
New proceedings have put pressure on the Swedish Patent Office, increasing trade mark filing times from eight to 14 weeks. Head of the design and trade mark department Helena Morgonsköld told Managing IP that this is temporary, however, and she predicts pendency will be back to eight weeks by the beginning of 2012. Amendments to the Trademark Act in Sweden came into force on July 1. Most of the changes were designed to bring Sweden into line with Community trade mark practice across the rest of Europe, and allow it to accede to the Singapore Treaty. The two biggest changes are the introduction of an administrative procedure for revocation of marks for non-use (previously it had to be done through the courts) and partial registration of a mark in just some of the classes applied for (previously an application could only be rejected or accepted in full). Other changes are: the opposition period has been extended from two to three months; marks can be transferred to a party with a stronger right without using the courts; and a closed application can be resumed under certain conditions. Managing IP spoke to Helena Morgonsköld about the first few weeks of implementation. How successful has the administrative revocation procedure been?We have only had five applications so far, but I think this is partly due to the summer holidays and people just starting to understand the new process. Did you expect more?Yes, we think there is a lot of potential for clearing up the register of unused marks, but that may come in time. Has the system of partial registrations been hard to adapt to?It took a lot of education and training in advance, and I think now our examiners are just getting used to the idea of registering marks in just some classes. The effect of that and the new revocations has pushed back the timeline for trade mark applications, from eight to 14 weeks, but I expect it will be back to normal in the New Year once everyone is up to speed. You haven't taken on any more staff?No, we are a fee-financed office so at this stage we can't afford to take on any more staff. We also believe that anyone should have the opportunity to oppose a mark or have it revoked, so the former is free and the latter only costs SKr450 ($68). It was deliberately set quite low. But that fee should cover the costs of the extra work?Yes, depending on how many such applications we end up with. So far we are finding that each takes 12 to 14 hours of work to complete, but there haven't been that many to go on. More staff probably won't be needed to cope with the partial registrations, unless we see an increase in applications overall. What else is changing at the Office?Our big project is improving the online trade mark application process. We are aligning it with the new OHIM EuroClass system, which should make it easier for applicants to select classes of goods and services, and the payment process is being improved as well. Around 80% of applications are made online at the moment. We want that number to be even higher. Simon Crompton |
