Trademark Law draft amendments: A snapshot

Application and examination procedure

The draft makes provision for the filing of applications online. It also makes provision for the filing of multiple class applications: applicants will be able to apply, in a single application, for registration of the mark in more than one class. The State Council has the power to formulate relevant rules at a later stage.

In the course of examining an application, the Trademark Office may issue an 'Examiners' Opinion', seeking further explanation or amendment. The applicant may respond, but failure to do so will not affect the determination of the China Trademark Office (CTMO).

Bad faith applications

The draft removed the general 'principle of good faith' from the second draft in filing an application. The draft maintains the current language of the law, and sets out what acts and scenarios will constitute damage to prior rights. The scenarios are narrow, and by no means exhaustive of all bad faith acts.

Well-known trade marks

The draft does not remove the difficulties currently experienced by owners of well-known trade marks. To amount to infringement of a well-known mark, a mark must be a “copy, imitation or translation”, rather than “identical, similar or a translation”, which is generally considered to be preferable . Whereas the 2010 draft indicated that an infringing mark used in relation to dissimilar goods is one that “unfairly exploits or damages the distinctiveness or fame of the well-known mark”, the current draft goes back to the original 'mislead the public' test.

Oppositions

The draft provides that only prior rights owners or interested parties are allowed to file oppositions. It also removes an opponent's right to appeal a Trademark Office decision in opposition proceedings. The opponent's only recourse will be to apply to the Trademark Review and Adjudication Board (Trab) for cancellation of the registration. If the applicant is unsuccessful, however, it will retain the right to appeal to the Trab or the courts.

Enforcement

Unfortunately, the draft does not remove the uncertainty that currently exists in relation to what constitutes trade mark 'use'. It does, however, introduce heavier penalties for 'repeat infringers', although what constitutes a 'repeat' infringer is not entirely clear. It also introduces increased statutory damages for trade mark infringement - from Rmb500,000 to Rmb1 million (US$80,000 to US$160,000).

A new requirement is introduced in relation to compensation for infringement: in order to make a claim for compensation, the trade mark owner must provide evidence that the registered mark has been used during the previous three years. While this is presumably intended to prevent the enforcement of bad faith registrations, it places burdens on legitimate rights owners. Compensation should be available as a matter of right.

The draft codifies the power of local administrative enforcement authorities to mediate questions of compensation incidental to their handling of administrative complaints.

Provisions are included for relief in relation to the unauthorised use of trade marks in registered company names, but they relate only to the use of well-known marks. It will continue to be difficult to prevent such use of other registered trade marks.

Final thoughts

Although the amendments are to be welcomed, they are not as comprehensive or as far-reaching as many had hoped. There is, however, an opportunity for public comment and interested parties are encouraged to make their views known to the State Council's Legislative Affairs Office by October 8 2011

Trade mark group, Rouse