Overview on Amendments to China’s Trademark Law

Amendments to China’s Trademark Law

On February 20, 2023, China Briefing reported on significant amendments to China’s Trademark Law. These proposed changes aim to modernize the existing law, streamline registration processes, and improve protections against anti-competitive behaviors, thereby enhancing the overall business environment in China. The China National Intellectual Property Administration (CNIPA) has opened these amendments for public comment until February 27, 2023. Below, we explore the main proposed changes and their potential impacts.

Expanded Scope of Trademarks

The draft amendment broadens the scope of elements eligible for trademark registration. Article 4 maintains the current list of symbols (text, graphics, letters, numbers, three-dimensional symbols, color combinations, and sounds) while adding “other elements.” This inclusion potentially allows unconventional elements like smells or flavors to be registered as trademarks, reflecting a more flexible approach to what constitutes a trademark.

Restrictions on Repeat Applications and Trademark Hoarding

To combat trademark hoarding and repeat applications, Article 14 of the draft amendment restricts applicants from registering identical trademarks for the same goods or services. Article 21 further prohibits re-registration of a trademark within one year of its cancellation, revocation, or invalidation. Exceptions to these rules include minor improvements, unintentional failures to renew, and the cessation of conflicting prior rights. These measures aim to strengthen trademark legitimacy and reduce consumer confusion.

Defining and Penalizing “Bad Faith” Applications

For the first time, the draft amendment explicitly defines “bad faith” trademark registrations and introduces penalties for such actions. Article 22 describes bad faith as registrations without intent to use, deceptive practices, or those harmful to national and public interests. Violations can result in fines up to RMB 250,000 (US$36,402) and confiscation of illegal gains, as outlined in Article 67. Impacted parties can file lawsuits for compensation, enhancing legal recourse against anti-competitive behaviors.

Shortened Opposition Period for Trademark Registrations

To expedite trademark registration processes, the draft amendment shortens the objection period from three months to two (Article 36). The amendment also removes the review procedure for objections, requiring applicants to file lawsuits directly if their registration is denied. This change aims to improve efficiency and reduce administrative costs.

Enhanced Provisions for Trademark Revocation

The draft amendments introduce new scenarios for trademark revocation to enforce the “use” principle more strictly. Article 49 allows for revocation if a trademark misleads the public about product quality, violates collective trademark rules, or seriously damages public interest. These additions are designed to eliminate idle or improperly used trademarks, fostering a healthier business environment.

Increased Obligations for Trademark Owners

Trademark owners will face higher obligations to prove the necessity of their trademarks. Article 61 mandates that registrants explain their trademark use every five years, with failure to comply resulting in cancellation. This aligns with international practices and emphasizes active use and maintenance of trademarks.

Clarification on Trademark Use Rights

The draft amendments provide clearer guidelines on when trademark holders can or cannot prohibit others from using their trademarks. Article 62 specifies that legitimate use of personal names, product descriptions, and common terms cannot be restricted by trademark holders. This prevents abuse of trademark rights and promotes fair competition.

Inclusion of E-commerce and Online Trademark Protections

Recognizing the digital shift, the amendments extend trademark protections to e-commerce and online platforms. Article 72 considers unauthorized online use of trademarks as infringement, providing a stronger legal basis for addressing digital violations. This update ensures that online trademark activity carries the same legal weight as offline use.

Conclusion

The proposed amendments to China’s Trademark Law represent significant strides towards improving the business environment. By addressing anti-competitive practices, streamlining registration processes, and expanding protections to the digital realm, these changes aim to create a fairer and more competitive market. These efforts are expected to enhance the credibility of trademarks, boost consumer trust, and lower administrative burdens, ultimately fostering a more dynamic business landscape in China.