Having garnered wi de attention and repeated discussions from all parts of the IP community over the past ten years, the third revision of the Trademark Law is now complete.
Regarding the complicated procedure of trademark application and registration, the lengthy time period required to determine the ownership of a trademark, and the failure to restrain frequent intentional malicious infringements. This overhaul of the existing Trademark Law was made to make it convenient for applicants to apply for and maintain their trademark rights, streamline the trademark opposition procedure, prevent malicious registration of trademarks, strengthen the protection of trademarks, and emphasize the obligations of trademark usage.
Review of the background and process of the Revision
In China, the Trademark Law was the first intellectual property-related law made by the Standing Committee of the National People’s Congress and became effective on March 1st 1983. It provides the essential protection of trademark registration rights necessary to develop the national economy. Following China’s accession to the Paris Convention for the Protection of Industrial Property and the Madrid Agreement Concerning the International Registration of Marks, to match international practices and meet the demands of the market economy, the Law was revised by the Standing Committee of the National People’s Congress for the first time on February 22nd 1993. This amendment introduced service marks, place geographical appellations that cannot be used as trademarks, the cancellation of registered trademarks by the Trademark Office ex officio (if the registration was obtained in violation of prohibitory clauses or through fraudulent means), and the classification of trademark infringements and crimes. To further enhance the protection of trademark-related proprietary rights and accommodate to the demands following China’s accession to the World Trade Organization, the second revision was made on October 27th 2001. This amendment enlarged the scope of subjects and objects of trademark rights, added the protection of prior rights and well-known marks, and introduced the judiciary in examining administrative decisions of trademark ownership.
In the past few years, with the dramatic increase of trademark registrations, the existing law became unsuitable for the practice in some aspects, such as: the complicated registration procedure, the lengthy time period required to determine trademark ownership, the dissimilation of the well-known mark system, the trademark squatting that has becomes increasingly serious, the trademark agent service that does not comply with relevant provisions, the failure to contain malicious infringements, and the inadequate compensation for infringements. Regarding these outstanding issues, it becomes particularly urgent and essential to revise the Trademark Law for the third time, for the furtherance of the intellectual property law system.
Therefore, as commissioned by the State Council, in 2003 the State Administration for Industry and Commerce (SAIC) began and prepared more than ten drafts of the Trademark Law (Revised) (for Comments), and finally formed and submitted the Trademark Law (Revised for Submission) to the State Council on November 18th, 2009. On September 1st, 2011, the Legislative Affairs Office of the State Council began to solicit comments publicly for the Trademark Law (Revision Draft for Comments) and on that basis, formed the Trademark Law Revision (Draft). This Draft was discussed and adopted by the Executive Meeting of the State Council on October 31st 2012, and read to the Standing Committee of the National People’s Congress for the first time on December 24th and then published for comments. Thereafter, it was read to the Standing Committee of the National People’s Congress for the second time on June 27th 2013.
On August 30th 2013, the Fourth Session of the Standing Committee of the 12th National People’s Congress conducted the third reading and adopted the Resolution on the Revision of the Trademark Law of the People’s Republic of China, stating that the revised Trademark Law will become effective formally on May 1st 2014. On that date, after ten years’ continuous efforts, the third revision of the Trademark Law will officially be successfully completed. The new revision contains 73 articles, an expansion from the 64 articles in the previous revision. The changes are made essentially in the following six aspects: (1). the addition of provisions on the time limitation for trademark examination; (2). the enhancement of the trademark registration challenge system; (3). the clarification of the well-known mark protection system; (4). the enhancement of the protection of trademark-related proprietary rights; (5). the regulation of trademark application and usage, to prohibit trademark squatting and protect fair competition in the market; and (6). the regulation of trademark agents.
Good faith, a basic rule for trademark registration and usage
In the new revision, Article 7 provides that “anyone who registers or uses a trademark shall comply with the doctrine of good faith.” As believed by insiders, the inclusion of this basic rule for civil activities is intended to encourage market players to act in good faith in trademarkrelated activities and curb trademark squatting, a problem that has become increasingly rampant. It is expected that this provision will be applied frequently as a catch-all clause in trademark-related ownership determination and rights protection.
According to Huang Hui, a senior partner of Beijing Wanhuida Intellectual Property Agents Co., Ltd., in addition to incorporating the doctrine in a general way, its embodiment can be found in the following provisions, “If a trademark for which one applies is identical with or similar to a mark that another person used without registration, and if the applicant knows about the existence of such other mark by virtue of any contractual or business relationship or otherwise with such other person, other than provided for in the previous paragraph, and if such other person opposes the registration of the trademark, then the trademark shall not be registered” (Article 15(2)). However, it is still unclear whether, as one of the conditions, the prior mark has to be used in China. The new revision states that “in the case of malicious registration of a well-known mark, the proprietor of the mark is not subject to the five-year limitation” (Article 45); any malicious user (Article 36) or registrant (Article 60) of a mark shall be liable for damages; any repeat infringer may be subject to heavier penalties by the industrial and commercial administration (Article 60); for any malicious infringement, the amount of damages may be one to three times the gain of the infringer from the infringement or the royalties (Article 63); trademark agents are required to comply with the good faith doctrine (Article 19), or may suffer from legal consequences for the violation (Article 68).
