New Chinese Trademark Law to be implemented on May 1, 2014

Published with permission of Eagle IP Ltd, a Hong Kong and Chinese IP Firm.

The Chinese Government announced that the 3rd amendment to the 1982 Trademark Law, passed by the 12th meeting of The Standing Committee of the National People’s Congress, will be implemented as of May 1, 2014.

Below are some major highlights:

Multi-class applications
At present, multi-class application is not available. Under the new Trademark Law, applicants who wish to obtain protection for a trademark in more than one class is required to file multiple applications with the Chinese Trademark Office.

Multi-class applications will likely decrease application costs for companies with diversified business and need to protect their marks on a wide range of goods and/or services.

Sound marks will be registerable
The existing Trademark Law only provides for the registration of words, figures, letters, numerals, color combinations, 3-D symbols and any combination of the above. The amendment allows registration of sound marks.
Cell phone manufacturers, software companies and entertainment companies such as Sony Mobile, Microsoft, Twentieth Century Fox are likely to benefit from the new provision.

Time limit on examination procedures
Lengthy application process is a flaw known well to both applicants in China and abroad. The new Chinese trademark law set the time limit for preliminary examination from filing to publication to 9 months. The stipulated time limit for the Trademark Review and Adjudication Board to make a decision regarding a trademark review case of trademark rejection is also set at 9 months. The examination period for making a decision regarding an opposition case is 12 months. Time limit for examination might be extended by no more than 6 months only under exceptional circumstance with the approval of the relevant officials.
This means the trademark application process is expected to be shortened considerably.

Prior use of a trademark will be considered
Currently, China adopts first-to-file principle. This means a trademark that has successfully registered will defeat a trademark that has long been in use in China for a longer time but has not obtained registration.
Under the 3rd amendment, prior use of a mark will be recognized. Provided that a trademark has been in use in China for a long period of time and has established reputation, the trademark owner will be allowed to continue to use the mark within the original scope.

Increased protection against bad faith registration
The existing Trademark Law only prohibits bad faith registration of a trademark by agents and representatives of a trademark owner. The new Trademark Law now stipulates that any party who has commercial or contractual relationship with the trademark owner is prohibited from registering a trademark in bad faith if opposed by the owner.

Well-known trademark
Ever since “Well-Known trademark” protection is introduced in China in 2001, Chinese companies are very keen on trying every possible way to have their trademarks declared “Well-known”. “Well-Known trademark” has become a means of advertising and sales promotion. The new Trademark Law prohibits companies from putting the words “Well-Known trademark” on the packaging of their products. It also stops use of such status in advertising, exhibition and commercial activities.

Increased damages for trademark infringement
Under the current Trademark Law, the maximum statutory damages for trademark infringement are RMB 500,000. The new Trademark Law pushes the ceiling up six-fold to RMB 3,000,000. Punitive damages are also introduced where the trademark infringement is intentional and has serious consequences.

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