Shanghai boosts brand owners with famous mark system

China is notorious for testing its policies before enacting them. However, sixteen years is exceptional and from 1997 to 2011, sixteen batches of famous trademarks were recognised.

Two minor changes from the draft version appear in the forthcoming Measures. These include removing a requirement that a company has not made a financial loss in the past and taking away famous brand status due to quality degradation.

Article 20 of the Measures provides for strengthened inspection and punishment for infringers of famous trademarks. Article 21 authorises the Shanghai Administration for Industry and Commerce (AIC) to prohibit and punish the use of identical or similar name packaging of a famous trademark.

Articles 22 and 23 protect famous trademarks, as AICs cannot approve similar registrations and shall coordinate with AICs from different places over infringement occurring outside of the region where the famous brand is registered.

These four articles offer unparalleled protection to trademark owners. They go beyond the Trademark Law and protect the interests of all brand owners.

“International companies could theoretically apply for famous trademark status if they are purely a Chinese subsidiary who owns the trademark,” said Papageorgiou.

According to Shen Wenping, head of famous trademark recognition at Shanghai AIC: “a foreign-owned Shanghai company qualifies for famous mark status under certain conditions”.

These conditions refer to companies that are Sino-Foreign equity joint ventures, Sino-Foreign cooperative joint ventures and wholly-foreign owned enterprises (WFOE) established in Shanghai.

OraVacs is an example of a WFOE with Shanghai famous trademark recognition. The vaccination company received its mark during the sixteenth round of recognitions last year. Armorlink, another WFOE specialising in electronics manufacturing, also has famous trademark recognition.

Famous trademarks provide an additional and more protective route for brand recognition. As is the case with well-known trademarks, a reward of around Rmb200,000 ($31,732) is offered to those who successfully obtain famous trademark status.

While famous trademarks offer greater protection under the Measures, they do not have the same reputation or reward as well-known trademarks. Well-known status is the ultimate accolade for a domestic company on the international stage, but for those companies not seeking business outside of China, a famous trademark could be the perfect solution.

Well-known trademarks are also the only route for foreign companies that do not fall into to three categories available for famous recognition.

The April issue of China Law & Practice considered Three Ways to Rescue the Trademark Law and well-known trademarks were one aspect in desperate need of revision. If the Law were to mirror Articles 20-23 of the Shanghai Measures, brand owners would receive heightened protection.

By David Tring

Further reading:

China question: How do I get my trademark recognised as well known?

Why trademark due diligence matters

PRC Trademark Law (2nd Revision) 中华人民共和国商标法（第二次修正）

Three Ways to Rescue the Trademark Law