Key revisions to the Trade Mark Law finally arrive

After a process lasting ten years, China has recently revised its Trade Mark Law, which will take effect on May 1 2014. At an opinion-collecting meeting hosted by the Law Committee of the National People's Congress and the Legislative Affairs of the Standing Committee of the National People's Congress and Legislature of China last year, changes in the new law, and the need for such changes were discussed. Such changes are summarised below.

The new law prohibits the use of the term well-known trade mark for commodities, packaging, and containers of the commodities, and its use in advertisements, promotional activities,and expositions as well as in other commercial activities. This new provision will quench the abnormal desires of quite a few trade mark owners for obtaining recognition of the well-known status of their marks from the Chinese authorities. At one time, obtaining the well-known status was such an overheated process which caused wide debate, as certain trade mark owners pursued the status by unfair means with the sole purpose of gaining an unfair advantage in business competition. This eventually led to the degeneration of the status Prohibiting the commercial use of the status will definitely reduce the overheated enthusiasm, and will also benefit owners of real famous marks. (See article 14 of the new law).

The new law explicitly provides that the basic principle of honesty and credibility should be observed throughout the process of either applying or using a trade mark, and should also be observed by the trade mark agency. It signals that bad faith will be examined more closely by the authorities in the future. (See article 7 of the new law).

The new law sets up qualification limits to eligible opponents whenever a trade mark opposition is brought on the basis of infringing others' prior rights. In this situation, the opponent must be the owner of the prior right, or the interested party. (See article 33 of the new law).

The new law makes great changes to relief routes of opposition in order to speed up the registration procedure and to prohibit the abuse of the opposition procedure. The new law states that opposition to an application is still be filed with the Trademark Office (TMO), but when the TMO decides to grant registration to the opposed trade mark and dismiss the opposition, the TMO will immediately issue the Certificate of Trademark Registration. The opponent is no longer entitled to file a review and appeal against such decision. The opponent can only file an invalidation request with the Trademark Review and Adjudication Board (TRAB) to invalidate the registration of the opposed mark. On the other hand, if the application is not approved, the applicant, unlike the opponent, is entitled to file a review and then an appeal with the court if TRAB's decision still rejects the application. (See article 35 of the new law).

The new law stipulates new statutory time limits for examining different trade mark matters, such as trade mark applications, opposition, reviews and invalidation procedures, from six to 12 months.

The new law admits priority of trade mark use. An owner of a registered mark may not prevent such prior user from using a mark similar or identical to the registered one and in respect of similar or identical goods, in the same way and within the same scope as the law has previously permitted. But the owner of the registered mark can ask the prior user to add distinguishable marks in a reasonable way. (See article 59 of the new law).

The new law increases the amount of compensation for damages for a trade mark infringement; the statutory compensation for damages is up to Rmb3 million ($496,000). (See article 63 of the new law).

The new law enlarges the scope of the registration elements by including sound trade mark, it makes one application for a multi-class of goods possible, and electronic applications may be filed.

Wen Zhong, Liu Shen & Associates