October 2, 2014
Bucerius Law School, Hamburg, Germany

Professor Dr. Alexandra von Bismarck (Field Fisher Waterhouse LLP)
China's New Trademark Law

On August 30, 2013, the People's Republic of China passed a decision to amend China's trademark law. The third revision of China's trademark law was eagerly anticipated by intellectual property practitioners and academics as well as foreign and domestic trademark owners, government officials and trademark agencies. The presentation will give a summary of the key changes introduced by China's new trademark law, which has come into effect on May 1, 2014.

The new law modernises the trademark application process. Electronic files are now officially recognized, multi-class applications allowed, and registrations of sound marks are from now on accepted.

To streamline trademark opposition procedures, the new law requires that from now on, only owners of prior rights or interested parties are allowed to file an opposition based on relative grounds. Oppositions based on absolute grounds may still be filed by anyone. The opposition procedures are shortened since the losing opponent has no longer the right to appeal to the Trademark Review and Adjudication Board (TRAB) but can only challenge the registration by filing an invalidation petition with TRAB.

Due to the statutory time limits introduced for the trademark registration, review, opposition, invalidation and cancellation procedures, the examination time will speed up. Given the shortened deadlines for trademark prosecution, applicants are well-advised to ensure evidence in support of a trademark application (likely to face a refusal) or an opposition is gathered well in advance of the actual filing. New examination time frames are set on examiners to address the long examination time of Chinese trademark applications.

The new law expressly confirms the case-by-case recognition principle for well-known marks, and the use of the phrase "well-known trademark" is prohibited under the new law.

To strengthen trademark enforcement, the new law implements a wide range of penalties and expands the definition of trademark infringement to intentionally facilitating trademark infringements and helping others to conduct infringing activities. Infringers will from now on be obliged to disclose their account books or other information for the purpose of assessing damages. For in series infringement cases, the court is empowered to order punitive damages up to three times of the damages assessed based on losses suffered by the trademark owner, profits gained by the infringer or notional royalty.

To regulate the trademark agency profession, legal obligations of trademark agencies are introduced, and the new law sets out a number of provisions which include the qualifications of a trademark agency and a trademark attorney and requirements for trademark agency's activities and how cases are handled etc.

To tackle trademark squatting, the new law expressly lays down that all trademarks must be applied for, and used in accordance with the principles of honesty and integrity - to avoid bad faith applications. Remedies for trademark owners against bad faith registrants are introduced.

Specialised IP courts are established by the National People's Congress Standing Committee. The specialized IP courts are based in Beijing, Shanghai and Guangzhou. The establishment of IP courts is expected to improve the consistency of IP judgments, which will address increasing concerns about contradictory judgements made by different Chinese courts.

The implementation of the new Chinese trademark law signifies another big step towards the harmonised and fair trademark system in the world's largest developing economy. Substantial changes to the trademark practice, as those to CTMO and TRAB proceedings, court proceedings and AIC penalties together with the introduction of time limits for CTMO and TRAB will substantially increase satisfaction with the new trademark system. The expansion of China's trademark scope to sound marks will be well-achieved by foreign companies, same as the acceptance of multi-class applications which will be beneficial for foreign multinationals. Finally, foreign companies, especially U.S. companies, will be thrilled by the increase of statutory damages.