CHINA TRADEMARKS
increased. Te new Article 59 states that “where the illegal turnover exceeds 50,000 Yuan ($8,000), the fine imposed shall be not more than five times of the illegal turnover; (2) where there is no illegal turnover or the illegal turnover is below 50,000 Yuan, the fine imposed shall be not more than 250,000 Yuan ($40,000)”. Te current thresholds are three times the illegal turnover and 100,000 Yuan ($16,000). Moreover, the same Article 59 provides that the AIC shall give a heavier punishment to those who have committed trademark infringement twice or more within five years and to those with other especially serious circumstances.
• Damages calculation. Te new Article 62 prescribes that the amount of damages shall be calculated as one to three times the loss suffered by the trademark owner or the profit made by the infringer, or the royalty. Te statutory damages limit is moved from the current 500,000 Yuan to 1,000,000 Yuan ($80,000 to $160,000). It still seems too low, especially when the infringer does not cooperate.
Such changes are welcome, but the modification looks like an adjustment in the light of rampant inflation, more than a strategic decision. Probably these changes (and the others contained in the enforcement paragraph) won’t be enough to stop infringers and counterfeiters. Brands will be damaged as usual and Chinese consumers will remain in the hands of these pirates.
Single colour signs and sound marks
Te new Article 8 requires for single colour signs that evidence of acquired distinctiveness is provided to the CTMO. It is not clear if this evidence can be provided during the examination procedure or only within the procedure for refusal in front of the TRAB (as happens now for three-dimensional trademarks).
Multi-class filing is allowed
Te change seems welcome by the industry since it might reduce the cost for trademark owners. Te official fee has not yet been disclosed, and neither is it yet clear what would be the benchmark for attorney fees in relation to trademark filing which involves—among other issues—dealing with the extremely complex sub- classification system.
Elimination of opposition appeals
Te right to appeal against an opposition decision is limited to the trademark applicant and not available any more to the opponent. If the opposition is rejected,
the trademark will
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“THE AIC SHALL GIVE A HEAVIER PUNISHMENT TO THOSE WHO HAVE COMMITTED TRADEMARK
INFRINGEMENT TWICE OR MORE WITHIN FIVE YEARS AND TO THOSE WITH OTHER ESPECIALLY SERIOUS CIRCUMSTANCES.”
be registered and enforceable. Te opponent whose opposition was rejected can initiate a cancellation action.
Deadlines for appeal
Te current deadline of 15 days to appeal a decision from CTMO is extended to 30 days. Te modification is welcomed by practitioners.
Examination opinion letter
According to the new Article 29, when the CTMO believes that examination should be supplemented with clarification or further documentation, an opinion letter will be issued. Te applicant must reply within 30 days. Te lack of reply will not cause withdrawal or rejection.
Concerns
Although the draſt moves in the right direction, many concerns remain about the Chinese trademark system.
• Too many trademarks registered with the CTMO. Te number of filings received by CTMO in 2012 was 1,502,540 and the number of registered trademarks was 919,951. Te accumulated number of
validly registered
trademarks, according to the CTMO annual report issued on March 22, 2012, was 5,510,100. Tis situation could be linked to the fact that by not giving much legal value to the use of trademarks but only to filing/ registration, even an entrepreneur with a local business needs to file and register a trademark with the Beijing Trademark Office.
• Too low burden of use. It is difficult to obtain the cancellation of a trademark due to its non-
Fabio Giacopello was winner of the ILO—Client Choice Award 2013, Trademark Category: China, is a recommended lawyer by Legal 500 and mentioned by MIP’s IP Handbook. He is a member of the anti- counterfeiting committee of INTA (China sub-committee), arbitrator at SHIAC (formerly called CIETAC Shanghai) and cooperates with institutions giving lectures about the Chinese and European IP systems.
World Intellectual Property Review Annual 2013 19
use. While the People’s Court has proved a fair judge in this regard, the CTMO and TRAB hold a ‘pro-trademark’ approach. It only requires a small amount of evidence of use to save the trademark from cancellation, with the effect that only no evidence of use will result in non-use cancellation.
• Too strict recognition of well-known trademarks. Due to the fact that in the past several companies have misused the recognition
of well-known trademark
provision, officers from the trademark office and judges have been very cautious in granting such status.
• Too many bad faith applications/ registrations. Strict
interpretation of the
existing insufficient provisions from the CTMO and courts has greatly contributed to the development of a flourishing industry.
• Too many fake products. Chinese consumers are frightened by
fake and low quality
products. Te streets of China and the rest of the world are inundated by goods originating from China which have unfortunately escaped scrutiny of the AIC and customs.
• Decisions from the CTMO and TRAB are too simple. Te legal reasoning cannot be understood and assessed.
Fabio Giacopello is a partner at HFG. He can be contacted at
giacopello@hfgip.com
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