CHINA TRADEMARK LAW
However, under the new law, only the owner of a pre-existing right or an ‘interested party’ can fi le an opposition. T is is a positive amendment for applicants who have fi led in good faith.
Higher penalties for infringers
Under both the existing and new laws, damages are determined by reference to the actual losses suff ered by a trademark owner. When it is not possible to calculate damages this way, they will be calculated on the basis of a reasonable royalty rate.
Under the new law, where there is evidence of bad faith by the infringer, or other ‘serious circumstances’ exist, damages can be tripled. In addition, in a further attempt to decrease infringement, statutory damages of up to around $500,000 can be imposed—a sixfold increase over the current level of statutory damages.
Multiclass applications and e-fi ling
T e new law allows trademark owners to fi le applications classes.
electronically and in multiple
E-fi ling is undoubtedly a welcome change which, it is hoped, will increase the speed and effi ciency of the prosecution process.
Multiclass fi lings may, however, be a double- edged sword, and their success may depend on how strictly the ‘honesty’ and ‘good faith’ provisions are enforced. On the one hand, it will increase effi ciency and reduce costs in managing a Chinese trademark portfolio, making it easier and more cost-eff ective
“OPPOSITION
PROCEEDINGS WILL BECOME VERY MUCH THE FIRST AND LAST CHANCE A BRAND OWNER HAS TO DEFEAT A TRADEMARK SQUATTER—A CHALLENGING
CONCEPT FOR MANY WESTERN BRAND OWNERS.”
a mark should proceed to registration in 12 months.
for genuine brand
owners to protect their brands. On the other hand, it opens up the possibility for trademark squatters to register more brands in more classes and at a reduced cost.
Splitting trademark applications
With multiclass applications being allowed for the fi rst time, the Chinese authorities will allow applicants to split their trademark applications in certain defi ned cases, such as in the case where an application in one class is blocked by a cited mark, enabling registration in the classes that are not blocked.
Streamlined time-frame Currently,
prosecuting a straightforward
trademark application in China takes at least 18 months. T e new law imposes tighter timing requirements. For instance, the CTMO must complete its examination within nine months, meaning that, provided no oppositions are fi led within the three-month opposition period,
56 Trademarks & Brands Online
Any decision by the TRAB on the CTMO’s rejection of a mark on absolute or relative grounds must be given within nine months; historically, this has taken anywhere from 12 to 24 months.
While these strict time limits all look good on paper, it remains to be seen whether the focus on speed will have an adverse impact on the quality of the decisions.
Supplemental evidence
T e period for fi ling supplemental evidence in opposition
proceedings is proposed to
be shortened from three months to 30 days following the fi ling of the opposition itself. If implemented, this amendment would have signifi cant
implications, as brand owners
would face a much tighter deadline when gathering evidence to support oppositions. Brand owners are therefore advised to start collecting good records to illustrate issues such as use, registration, fame and reputation so that materials are at hand when needed.
Volume 3, Issue 2
Edward Chatterton is a partner in the IP and technology team based in DLA Piper's Hong Kong offi ce. He advises on the full range of intellectual property, including trademarks, patents, copyright, and registered and unregistered designs. He also specialises in providing litigation and transactional IP advice.
Trademark licences
Under the current law, a trademark licence has to be recorded with the CTMO within three months of its execution. However, neither the law nor the rules set out the consequence for failing to do so. As a result, many companies choose not to record their licences. T e draſt implementing regulations propose that
an application to
record a licence that is fi led late will no longer be processed by the CTMO. Although a failure to record a trademark licence does not aff ect its validity, the licence cannot be enforced against a third party acting in good faith. Brand owners should therefore review their trademark licences and take appropriate action.
T e new law introduces a number of welcome amendments, with the most notable being the requirement to fi le applications in ‘honesty’ and ‘good faith’. Other amendments may prove challenging. Time will tell how this all works in practice for those that are eager to protect their brands in China.
Edward Chatterton is a partner at DLA Piper in Hong Kong. He can be contacted at:
edward.chatterton@
dlapiper.com
www.trademarksandbrandsonline.com
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