(Sept. 13, 2013) On August 30, 2013, the Standing Committee of the National People’s Congress (NPC) amended the Trademark Law of the People’s Republic of China (PRC); the amendments will become effective on May 1, 2014. (Decision of the NPC Standing Committee on Revising the PRC Trademark Law [in Chinese], NPC website (Aug. 31, 2013).)
The PRC Trademark Law was first adopted by the NPC Standing Committee on August 23, 1982, and entered into force on March 1, 1983. The Law was revised in 1993 and in 2001 by the NPC Standing Committee. (For an English translation of the Law amended as of 2001, see World Intellectual Property Organization website.) The 2013 amendment revises 34 articles out of the 64 of the existing Law, adds 13 new articles and six new provisions, and deletes three articles. (Decision of the NPC Standing Committee on Revising the PRC Trademark Law, supra.)
Highlights of the amended law are:
- expanded trademark eligibility: the amended law expands allowable trademarks to include sounds (id. art. 8), except for the national anthem and military songs (id. art. 10.);
- passive protection of well-known marks: well-known marks will not be recognized until specific disputes arise. Only three authorities may recognize well-known marks: the Trademark Office, the Trademark Review and Adjudication Board (Trademark Board), and the people’s courts (id. art. 14.) Well-known mark owners may not use the term “well-known mark” on the product, product packaging, or product containers, nor may owners use the term “well-known mark” in promotions, advertising, exhibitions, or other commercial activities (id.);
- simplified application proceedings: an applicant may apply one trademark for multiple-mark classes in one file (id. art. 22 (2)), and electronic application is permitted (id. art. 22 (3));
- added time limits on the Trademark Office and Trademark Board examinations: the preliminary examination should take no longer than nine months (id. art. 28). Reviews of application rejections should be no longer than nine months (id. art. 34). Examination of an objection to a trademark registration should last no longer than 12 months (id. art. 35 (1)). Review of approval of an objection to a trademark registration should be no longer than 12 months (id. art. 35 (3)). A decision to maintain or cancel a registered trademark should be made within either 9 or 12 months from the date the request to cancel was filed, with the difference depending on the reason alleged for cancellation (id. arts. 44-45); extension of this period is available upon approval by the State Administration for Industry and Commerce (SAIC). The nine-month limit may be extended by three months, and the 12-month limit may be extended by six months (id. arts. 28, 34-35, 44-45);
- revised objection proceeding against trademark registration: under current law and the new law, after the registration application is preliminarily approved and before final registration, there is a three-month period in which the public may raise objections. In addition to the current grounds for objection, the amended law allows an objection when the applicant learned of the mark through business contacts with the trademark owner (id. art. 15). While expanding the bases to object, the new law limits the objecting party to the trademark owner and interested parties, when the objection is not based on illegibility, a ground on which anyone could object under current law (id. art. 33). Moreover, the new law for the first time permits the Trademark Board to suspend a review process if the outcome of the review depends upon the decision of a pending judicial proceeding or a pending administrative proceeding (id. art. 35); and
- heightened protection of the exclusive rights of trademark owners: the new law strengthens protection of trademark owners by prohibiting unfair competition, regulating trademark agents, and imposing harsher punishments on trademark infringers.
- first, the use of another person’s or company’s registered trademark or unregistered well-known mark in the name of a business, which could mislead the public, may violate the Unfair Competition Law of the People’s Republic of China (id. art. 58; Unfair Competition Law, arts. 5, 21, [in Chinese], the Central People’s Government website (Aug. 31, 2005));
- second, the new law explicitly prohibits trademark agents from registering marks in bad faith. It clarifies that the agent has a duty to keep the principal’s trade secrets (Decision of the NPC Standing Committee on Revising the PRC Trademark Law, supra, art. 19). Fraudulent conduct may be entered on the agent’s credit record (id. arts. 20 & 68); and
- third, remedial measures are more favorable to a plaintiff in an infringement claim: to deter infringements effectively, the new law raises the maximum statutory damages from RMB500,000 (about US$81,000) to RMB3 million (about US$486,000), newly permits punitive damages, and imposes a heavier burden to prove lack of infringement upon defendants (id. art. 63). But if the defendant can prove that the plaintiff-registrant has not used the trademark for the proceeding three years and the plaintiff cannot prove the suffering of any harm due to infringing actions, compensation may be rejected (id. art. 64).
Prepared by Bing Jia, Law Library Intern, under the guidance of Laney Zhang, Senior Foreign Law Specialist.