China IPR

The Brave New World of Chinese IP Legislation – Trademarks

One thing is for certain about the current crop of revised IP laws in China: they are primarily being drafted to accommodate and anticipate China’s own needs, and not in response to international pressure or WTO accession.  A second important theme is harmonization with China’s own new laws and optimization of experience already learned, such as the revised Civil Procedure Law and Tort Law, as well as emerging doctrines and experience in antitrust and standardization laws.  These motivations are quite different from the drafting efforts of a decade ago.  The shift was clearly evidenced in the 2008 Patent Law amendments.

The draft revised Trademark Law is part of this trend. The draft law was just sent by the State Council Legislative Affairs Office (SCLAO) to the National Peoples Congress on October 31.    According to a speech by DG Zhang Jianhua of the SCLAO at the 2012 “Annual Trademark Conference” in Kunming in September, the amendments were drafted specifically as a legislative response to issues identified in trademark practice.  DG Zhang identified three significant areas of change in this draft –

  1. Trademark Registration:  trademarks may be registered for sound and single color trademarks. Trademark applicants may now file one application for multiple classifications of goods.  Amendments of trademark applications will be more liberally granted, and there will be fewer rejections based on minor deficiencies in the application.  Finally, the opposition system will be limited and narrowed in order to limit purported abuse of the opposition system.
  2. Unfair Acts in Registration: Additional steps will be taken against squatting or malicious registrations, which are a pervasive problem.  Additional controls will be provided over misuse of “well known trademark” recognition, which has been improperly used for promotional purposes.  In addition, the use of “well-known trademark” will be banned in   advertisements, and there will be a link on misusing the trademark as an enterprise name.
  3. Infringements: There will be an expansion in the definition of infringing acts, to include using trademarks as enterprise name or the name of commodity without permission, as well as aiding or abetting or others on trademark infringement (which many expect to include landlord liability).  Statutory damages will increase from 500,000 to 1 million RMB.  Increased penalties will be imposed for repeated infringement.  The burden of producing evidence may also be shifted to the infringer to provide relevant evidence such as accounts, materials, etc.

In recent discussions I had with academics and officials, there also seems to be an interest in removing provisions on provisional measures (preliminary injunctions, evidence and asset preservation) from the new IP laws in light of the Civil Procedure Law amendments.  In addition, policy makers have also been showing increased interest in adopting certain limited aspects of US discovery type procedures to encourage more effective evidence exchange, which may also be reflected in new amendments to the IP laws.

With the Trademark Law out of the hands of the SCLAO, my guess is that the Copyright Law may be the next major law undergoing revision by it.  Let’s see how Chinese interests are reflected in this law as well as amendments to the patent law, service inventor remuneration regulations, anti-unfair compeition law, antitrust and IP, IP/standardization rules, and forthcoming judicial interpretation(s) and related research efforts.

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