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Legal Highlights

Significant Revisions in the New PRC Trademark Law

2013.09.09

On August 18, 2013, James Luo, Managing Partner of Lawjay, represented Trademark Law Professional Committee of Beijing Lawyers Association and provided legal opinion to Legislative Affairs Commission of the NPC Standing Committee on the draft of the new amendment to the PRC Trademark Law (“the  Amendment”) . On August 30th, 2013, the Standing Committee of National People's Congress approved the Amendment in its 4th Meeting of the 12th Session. We are glad that Lawjay made contributions in the process leading to the Amendment.

The Amendment will be implemented on May 1st, 2014. Compared with Trademark Law 2001, the Amendment made the following significant changes:

  • Trademark owner’s burden of proof is significantly reduced. The amount of compensation of trademark infringement is determined according to the proceeds obtained from the infringement during the period of infringement, or the losses suffered by the infringed due to the infringement. Trademark Law 2001 provides that where it is difficult to determine through the aforementioned approaches, the court shall determine a compensation of RMB 500,000 (Statutory Damages) or below according to the circumstances of the infringing acts.

    The Amendment not only reduces trademark owner’s burden to prove the proceeds or losses, but also takes into account the subjective malice of the infringer. The Amendment provides that where it is difficult to determine the amount of proceeds or losses, the court may consider the royalty of the asserted trademark. If the alleged infringer refuses to provide account books, the court may consider the evidence provided by the trademark owner in determining the compensation. For willful infringement, the compensation shall be one to three times of such royalty.

  • Statutory Damages is remarkably improved. The statutory damages under Trademark Law 2001 was RMB 500,000. The Amendment improves it to RMB 3 million, five times higher than that under the old law.

     The Amendment provides that if it is difficult to determine the proceeds obtained from the infringement, or it is difficult to determine the losses suffered by the infringed due to the infringement, or it is difficult to determine the royalty, the people's court shall determine a compensation of RMB 3 million or below according to the circumstances of the infringing acts.

  • Trademark application and review is accelerated. The Amendment sets time lines for TMO and TRAB to handle trademark applications and review procedure:

    • The time line for TMO’s examination of new application is 9 months (Art.28);

    • The time line for TRAB’s review of appeals from refusal is 9 months, with an extension of 3 months (Art. 34);

    • The time line for TMO’s examination of trademark oppositions is 12 months, with an extension of 6 months (Art. 35.1);

    • The time line for the TRAB’s review of appeals from rejection decisions in opposition proceedings is 12 months, with an extension of 6 months (Art. 35.3);

    • The time line for TRAB’s review of appeals from cancellation decisions is 9 months, with an extension of 3 months (Art. 44).

  • Besides the time line, the Amendment also allows electronic applications, which will also accelerate the application and review process.

    • Principle of honesty and good faith is to be observed. The Amendment requires that in trademark registration and use, the principle of honesty and good faith shall be observed. Accordingly, trade mark agencies shall also bear the obligation to inform the applicant of any possibility where the application may violate the law. The Amendment also imposes upon trademark agencies the obligation to refuse the entrustment of any false representation or any application infringes others’ prior rights.

    • Apart from the above revisions, there are also important changes including the following:

      • Well-know trademark cannot be used in commercial advertising. The Amendment provides that well-known trademark recognition can only be used for protection. It is not allowed to be used on the product, container or package of the product, advertising, exhibition and other commercial activities;

      • An application for a trademark may cover more than one class. The applicant may apply for a trademark registration in different classes in one application, which will considerably improve the efficiency of TMO and reduce the cost of applicant;

      • “Sound” is allowed to be registered. Sound, as a unique identification of the commercial origin of products or services is allowed to be registered for the first time in the history of PRC Trademark Law. Sound branding is increasingly becoming a vehicle for conveying a memorable message to targeted consumers, taking advantage of the powerful memory sense of sound. After the Amendment takes effect, we are expecting “sound-based” trademarks like MGM lion roar and Intel welcoming tone to be registered in China.