Halving of Chinese trademark fees provides immediate costs benefit for counsel, but raises squatting concerns 13 Apr 17
Reversing a trend towards increases seen across several Asian jurisdictions of late, the China Trademark Office of the State Administration of Industry and Commerce (SAIC) has slashed user fees by half. While the reduction is welcome in terms of budgets, many trademark counsel will be concerned about a potential increase in indirect enforcement costs should squatters try to take advantage of the lower fees.
Effective from the start of April, fees for a whole range of trademark office services have been reduced by 50% (SAIC’s own notification can be viewed here, in Chinese). This appears to correspond with the Chinese government’s IP policy initiatives set forth as part of its 13th Five-Year Plan. An outline of the new fee schedule is given below, with prices in Chinese yuan and their approximate conversion to US dollars at current exchange rates:
|Service||Original fee||New fee as of April 1 2017|
|Application for trademark registration (up to 10 items in one class)||Rmb600 ($90)||Rmb300 ($45)|
|Surcharge for each additional item in specification above 10 items||Rmb60 ($10)||Rmb30 ($5)|
|Recordal of trademark assignment||Rmb1,000 ($150)||Rmb500 ($75)|
|Application for trademark renewal (single registration)||Rmb2,000 ($300)||Rmb1,000 ($150)|
|Late filing charges for renewal (single registration)||Rmb500 ($80)||Rmb250 ($40)|
|Application for trademark review (refusal appeal, opposition appeal, non-use cancellation appeal, invalidation)||Rmb1,500 ($220)||Rmb750 ($110)|
|Recordal of change of name, address or agent (single registration)||Rmb500 ($80)||Rmb250 ($40)|
|Application for collective trademark||Rmb3,000 ($440)||Rmb1,500 ($220)|
|Application for certification trademark||Rmb3,000 ($440)||Rmb1,500 ($220)|
|Trademark opposition||Rmb1,000 ($150)||Rmb500 ($75)|
|Rectification of one pending application or one registration; non-use cancellation||Rmb1,000 ($150)||Rmb500 ($75)|
|Recordal of trademark licence agreement||Rmb300 ($45)||Rmb150 ($22)|
In a client note, China-based Bird & Bird partners David Allison, Rieko Michishita and Alison Wong highlight the change to the official fee for recording a change of local trademark agent as being of particular significance for international brand owners. “Rights owners have long complained about the high official fees imposed to change agents”, they write, “which created a significant barrier to trademark owners moving their portfolios to new agents.” With the domestic Chinese IP services market now offering a substantial range in terms of price, expertise and reach – and reports of unscrupulous trademark agents by no means uncommon – it is clear to see why such a reduction could prove beneficial to many rights holders.
However, some commentators have warned that the change in fees could also lead to some less welcome results for brand owners. In a country where trademark squatting has been a persistent and large-scale issue, there is concern that such a significant reduction in fees might encourage more bad faith filings. “From a cost perspective, no doubt all brand owners will welcome lower official fees,” say Amanda Yang and Rachel Tan of Rouse in Beijing. “However, another consequence of lower official fees… is the expected increase in the number of new trademark filings – which may reach a new peak this year. Since less investment is required, trademark squatters are likely to be even more willing to file bad-faith applications.”
They also point out that other initiatives at the trademark office, such as the opening of more local trademark filing centres, could have a negative impact on the quality of decisions and on the trademark ecosystem as a whole. “Over time, improvements will be made, but uncertainty in the short term will prove unsatisfactory for legitimate brand owners,” they conclude.
And that’s before taking the agency’s rapidly mushrooming workload into account. In 2016 alone, it received a record-breaking 3.7 million applications – a massive year-on-year increase of 28.4%. China’s commitment to creating a world-leading IP system is to be commended. But while it still tackles problems like widespread trademark squatting and the world’s largest counterfeiting industry, it is understandable that many brand owners will only feel partly gratified by this latest round of fee reductions.
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