The intention of this new Act is inter alia to go after trademark infringers and strengthen the position and ensure a fair market for trademark holders. This blog will mainly focus on some of the changes in the application procedure.
Some of the more significant changes are:
- the introduction of a multiple class application system
- increased protection for well known marks
- an increase in statutory damages
- shortening of the application procedure
- possibility to protect more types of signs
The possibility to include more than one class in a trademark application is of course a significant improvement compared to the previous single class system. This will most likely lower costs and speed up the application process. Due to the multiple class system the principle of a reexamination notice is reintroduced. The reexamination notice allows the applicant, upon request from the examiner, to describe or amend the application. If obstacles then remain and the application is partially rejected a divisional filing can be made, which will allow an applicant to move forward with a new amended application but with the original filing date intact.
Further, protection for well known marks is strengthened, as it is now possible for a holder of a well known mark to prohibit use of the mark even on dissimilar goods if the use is likely to cause confusion, i.e. ban others from registering their trademark or using similar ones. A trademark can, based on the holder’s request, be defined as well known, when the facts of the relevant case supports such a conclusion. It is no longer allowed to use the phrases “well-known trademark” or “renowned trademark” on goods, packages, in advertising or other commercial activities. This amendment makes the “well-known” criteria open only to them who can actually show that their trademark is well known to the relevant consumers. Bearing in mind that Chinas’ population is well over 1.3 billion people, it could be rather tricky for producers of consumer goods to establish that their mark is well known.
In close connection to the above it is now also regulated in the new act that the use of other’s registered trademarks as trade name is prohibited. There is now also a connection between the trademark act and the unfair competition law, and combined they regulate that the use by a third party of a registered trademark or a well-known unregistered mark as trade name constitutes unfair competition.
In order to raise the stake for intruders the maximum amount of compensation for statutory infringement is raised to RMB 3 million (slightly below USD 500 000) which is six times the previous maximum amount. The burden of trademark holders to provide proof of infringement is mitigated and instead the alleged infringers must now at the court’s request provide documents, such as e.g. account books, to assist the determination of damages. Otherwise, they are facing the risk that the compensation could be determined according to amounts proposed by the trademark holders. This of course indicates that the Chinese authorities are getting increasingly serious in dealing with trademark infringements and they will be more consistent with international practice.
A statutory time limit for examination has been implemented. The Chinese Trademark Office’s (“CTMO”) preliminary examination period of a trademark application is shortened and should now not take longer than 9 months, followed by a possible review (within an additional time frame of 9 months) by the Trademark Review Adjudication Board (“TRAB”) of the CTMO’s rejection of a trademark application. Similar time limits are also in place for oppositions, invalidations and cancellations.
Further, it is now possible to register sound as a trademark, as long as they can be recognizable and distinguish mark owner’s goods from others. An applicant however, must provide a musical sample together with an explanation how the sound mark is used and also describe the sound mark by either a staff or numbered musical notation with literal explanation. The act expressly mentions sounds as an example but this is followed by the Chinese sign equivalent to “etc”, hence, this is not exhaustive and another example mentioned is registration of single colour marks. And just in case anyone should come to think of trying to register certain hymns as sound marks: the list of prohibited signs is expanded with the Chinese “national anthem” and “military song”. In line with the explanation of a sound mark an applicant of a 3-D mark must also explain how the 3-D mark is used inter alia by submit a specimen by which the 3-D shape can be determined, the specimen must contain at least three view drawings of the 3-D mark.
All the above noted changes in the new trademark act is as mentioned done to strengthen the position of trademark owners and speed up and otherwise promote the application process. It remains yet to be seen how the new trademark act will be handled in practice by authorities and courts.
Peter Hermansson, Attorney at Law