Key changes of the new PRC Trademark Law

Written ByCherry (Qiaoye) Zhang, Paralegals

 

The Standing Committee of the National People’s Congress passed the third amendment to the Trademark Law of the PRC (Trademark Law) on 30th August 2013 and it came into effect on 1st May 2014. There are total 53 changes in the amended Trademark Law, which include the trademark registration range in China, the application and appeals procedures and deadlines and trademark protection. This article will introduce the key changes that needed to be aware of.

 

1. The registration application of sound trademarks

Sounds are allowed to be registered as trademarks in China according to the new Trademark Law. Because visibility is not a mandatory condition for the registration application of any signs any more, including sounds, as long as they are capable of distinguishing goods or services from others, then such signs could be registered as trademarks. As for other non-visual signs, such as scents, they still could not be able to register as trademark under the new law, since the authority considers that scents would be confusing to the Chinese public.

As a member of TRIPS, this is consistent with China’s obligations under various conventions and agreements related IP area and China will try to apply the provisions thereof in legislation and administration. Since the definition of trademark in TRIPS is so board that sounds and scents are capable of constituting trademarks, it could be considered as a progress that China does not consider visibility as a mandatory condition for registering trademark and allows sounds to be registered under the new law.

However, in order to adapt the new change, the requirements of submitting application will be modified as well which may cause new obligation to the sound trademark application. Because according to the Implementing Regulations of Trademark Law, applying for sounds trademark will need to submit the stave or numbered musical notes and literal introduction.

 

2. The Procedures: more convenience in applications and shorter time

        2.1 Simplified filing

The new Trademark Law allows multiple categories filing of applications and electronic filing as well. It means that one application could cover more than one category, which may cause additional convenience for new applications covering multiple categories, but it remains unclear whether it will cause more fees.

    2.2 Procedural deadlines

The new Trademark Law for the first time establishes deadlines for filing applications for new trademarks, oppositions, invalidations and so on, which means that procedures should be completed more swiftly.

Procedural Deadlines to Chinese Trademark Office (CTO) and Trademark Review and Adjudication Board (TRAB) to file Applications under the PRC Trademark Law
Procedure Time-limit (months) Extension (if granted by SAIC)
Trademark application 9 n/a
Review on rejection 9 3
Opposition 12 6
Review on opposition (filed by trademark applicant) 12 6
Invalidation on relative grounds (e.g. conflict with prior rights) 9 3
Invalidation on absolute grounds (e.g. lack of distinctiveness) 9 3
Review on invalidation decision by CTMO on absolute grounds 12 6
Cancellation 9 3
Review on Decision of Cancellation  (TRAB) 9 3

 

  3. Prohibition on trademark squatters

Registration and use of trademark must be based on the good faith, which is considered as a fundamental principle and the application lack of good faith will be refused. Except with prohibiting squat by trademark dealers, distributors, agents, a new sub-Article is also added to prohibit those who have business contacts with the brand owners to register the same or similar trademarks on same or similar goods.

 

  4. Calculation of the actual losses for trademark infringement

The new law specifies methods of calculating actual losses and adds punitive compensation.

1)      The compensation shall be determined by actual losses, the proceeds obtained by the infringer form the infringement and the multiples of the trademark utilization fee.

2)      For serious infringement upon the right of using trademarks in bad faith, the new law added the punitive compensation, which means that the amount of compensation may be determined as one to three times the amount of normal infringement. This is the first time that punitive damages are introduced.

3)      The court may decide the compensation based on the request of the claimer and the evidence. The court can order the defendant in a trademark infringement lawsuit to submit the accounting books to prove the scale of use, if the defendant refuses then the court can use the figures proposed by the claimer.

4)      If damages cannot be calculated based on the actual losses, the proceeds obtained by the infringer from the infringement or the registered trademark license fee, the court can award statutory damages based on his own view of the infringement – to a maximum of RMB 3 million.