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Major Revisions of new Chinese Trademark Law

Section I Trademark Prosecution

1.       Sound mark is registerable (Article 8).

2.       Multi-class application is acceptable - In a multi-class application, if the application in one class is blocked by a citation mark, the applicant is entitled to apply to split the application, hence allowing the unblocked class(es) to proceed to registration and dealing with the blocked class separately (Article 22).

3.       Amendment during the application - According to old trademark law, an application was refused even for formality deficiencies and applicant had to file a new application. The revised law prescribes the applicant now can explain or amend his application (Article 29). 

4.       Electronic service - The Draft Regulations require e-filings to be made in a specific format designated by CTMO and expressly recognize electronic communications or service of all kinds of documents by CTMO and/or TRAB (Article 22).

5.       Partial acceptance - The applicant is allowed to split the application within 15 days upon receipt of the partial acceptance notification issued by CTMO;  

6.       Amendment / clarification - If amendment to or clarification of the trademark application is required, the applicant needs file the same within 15 days upon receipt of the notification issued by the CTMO.

7.       Time limit for examination:

a)         Preliminary examination of trademark application is requested to finish within 9 months (Article 28);  

b)         Opposition decision is requested to issue within 12 months after publication period lapses (Article 35);

c)         Review on refusal is required to finish within 9 months, which can be extended to 12 months upon the approval of the State Administration for Industry & Commerce (SAIC) (Article 34);

d)         Review on opposition is required to finish within 12 months, which can be extended to 1.5 years upon the approval of the SAIC (Article 35);

e)         Cancellation based on non-use in 3 consecutive years is required to finish within 9 months, which can be extended to 12 months upon the approval of the SACI (Article 49);

f)           In general, the procedures involving both parties are limited within 12months (6 months extendable), and those involving one party are limited within 9 moths (3 months extendable).

g)         As for registration, review, opposition, invalidation and cancellation procedures, the above-mentioned time limit will not cover the time required for certain special procedures, for example, if necessary documents serve through publication in a gazette, if amendment or clarification by the applicant, if extra round of evidence exchange is required; if submission of use evidence/ballot for same day applications is called for, etc.

h)         The first date is excluded in calculating all deadlines;

i)           If the deadlines calculated in months, the deadline falls on the corresponding date on that month;

j)           If the deadline falls on a statutory holiday, it will automatically be postponed to the next working date thereafter.

8.       Opposition:

a)         Time limit - The time for filing supplemental evidence is limited to 30 days after filing the opposition.

b)         Goods/service split - If the opposition is filed in respect of part of the designated goods/services only, the applicant is allowed to split its application within 15 days upon receipt of the Ground of Opposition from CTMO, hence allowing the mark to proceed to registration in respect of the unopposed goods/services.

c)         Opponent - Only “prior righter owner and interested party are allowed to file an opposition based on “relative grounds”, however, anybody may file an opposition based on “absolute forbidden ground”(Article 33).

d)         Simplifying opposition procedures - 1)“When opposition fails, the opponent may file an invalidation of the opposed mark, however is not allowed to review the opposition decision issued by the CTMO any longer(Article 35.2); 2) When opposition succeeds, the opposed party (trademark applicant) may file a review and proceed with an administrative litigation if the review fails.

e)         After an opposition fails, the opposed trademark is granted registration on the date that 3 month opposition period expires. Such registration shall have no retroactive effect on other party’s using of identical and similar marks before the opposed mark’s registration date unless the malice can be approved (Article 36).

9.       TRAB proceedings - The necessary amendments are required to file within 15 days upon receipt of the notification from TRAB. Supplementary supporting evidences are required to file within 30 days upon filing the application or response (three months in past practice).

10.    Trademark cancellation grounds (Article 49): 

a)         Where a trademark registrant alters a registered trademark, or the name, address, or other matters concerning the registrant without approval (ex officio);

b)         Where a registered trademark is becoming a generic name in a category of approved goods (by application);

c)         Non-use in three consecutive years (by application);

11.    Renewal - Renewal application can be filed 12 months in advance before the trademark lapses.

12.    Assignment - Under the Draft Regulations, assignment recordation is no longer the duty of the assignee only. Both assignor and assignee are jointly responsible for recording the assignment(Article 42). 

13.    Suspend procedures:

a)         In a review on an opposition decision, if relying on the outcome of an ongoing court action or other administrative action to determine the prior legal rights, the TRAB has right to suspend the review (Article 35.3);

b)         In an trademark invalidation procedure, if relying on the outcome of an ongoing court action or other administrative action to determine the prior legal rights, the TRAB has right to suspend the invalidation (Article 45.3);

c)         In a trademark infringement raid action, if any dispute arises with respected to the ownership of the trademark, or if the right owner files lawsuits of trademark infringement, the administrative authorities for industry and commerce may suspend the raid.

 

Section II Practice

1.       WKTM - Well known trademark is forbidden from being used as an advertising tool.

2.       Anti-trademark squatting measures:

a)       Application for registration and use of a trademark shall be based on the principal of good faith (Article 7);

b)       If a trademark applicant is an agent or representative, or has contractual or business contacts or other relations with the prior trademark user, if the prior user files an opposition, the trademark shall not be registered (Article 15.2);

3.       If a prior user has not registered an earlier trademark and even he cannot have the later registered trademark revoked, he can still use the earlier trademark within the original scope of its use. However, the trademark registrant has right to request to the prior user the addition of an indication of distinction to the prior mark. (Article 59.3).

 

Section III Enforcement

1.       Revision on damages:

a)         Damage calculation measures - Firstly calculated by the actual losses incurred by the right holder as a result of the infringement; Secondly, if the actual losses are difficult to determine, then the damage is calculated on the benefits obtained by the infringer; Thirdly, if the above losses or benefits are hard to determine, the damage shall be calculated reasonably as a multiple of the licensing fee (Article 63.1);

b)         If none of the above calculation measures can be applied, the court will adopt the statutory compensation, which is increased from CNY 0.5 million (US$83,000) to CNY 3 million (US$500,000) (Article 63.3);

c)         The new Trademark Law provides for the first time “punitive damages”. If the defendant has committed deliberate or repeated acts of IPR infringements, the court may increase the damages by up to three times the amount of compensatory damages. The amount of the increase depends on the malice, severity of the infringement, and also the reasonable cost for stopping infringement shall be covered (Article 63.1);

d)         For the purposes of determining the damages, the court may order the infringer to present account books and documentation relating to the infringement (Article 63.2);  

2.       Revision on administrative punishment:

a)         Heavier administrative fines - In cases of illegal business revenue of over CNY50,000 (US$8,300), the administrative fine up to five times the illegal business revenue can be imposed. In cases of illegal business revenue below or equal to CNY50,000, a fine up to CNY250,000 (US$41,700) can be imposed (Article 60.2);

b)         Production tools -The new trademark law has deleted the expression “specifically used to produce the infringing goods and to counterfeit the labels” and prescribes that “the administrative department shall order the infringer to destroy the tools used in producing such goods or forging logos of the registered trademark.” It seems that the tools refer to any manufacturing tool of the counterfeited products in addition to the molds containing the trademark impression (Article 60.2);  

c)         Advertising as a well-known trademark will be imposed a fine of CNY100,000 (US$16,700);