Major amendments to Trademark Law proposed

The Chinese Trademark Office has circulated its draft amendments to the Trademark Law for comments. The draft proposes substantial changes to the law.

As there is a heavy backlog of pending applications, expediting the registration procedure is a main priority. Key proposals include the following:

• Applications will no longer be examined on relative grounds;
  
  
• Opposition proceedings will be initiated before the Trademark Review and Adjudication Board (TRAB), thereby cutting the number of opposition proceedings at the administrative level;
  
  
• Trademark examinations will have to be completed within 12 months; and
  
  
• The TRAB will have discretion to issue a decision without notifying the applicant that its mark has been opposed if it believes that the opposition grounds are untenable.

Many opposition and invalidation proceedings lack merit and waste resources, thereby causing delays and injuring legitimate interests. The draft amendments thus propose the following changes:

• The losing party in opposition or invalidation proceedings will be liable to pay the costs incurred by the winning party; and
  
  
• A losing party which has opposed a registration in bad faith will be liable to compensate the other party for any loss suffered.

With regard to time limits, the draft amendments propose that:

• foreign applicants be given an additional 30 days to respond to an action for correction (ie, a period of 60 days in total); and
  
  
• the time period to apply for a review of refusal be extended from 15 to 30 days.

Moreover, as the existing sanctions against bad-faith use and registrations are limited, unregistered owners have little protection. The Trademark Office proposes the following amendments, among others:

• Trademark applications and use will have to comply with principles of good faith.
  
  
• The owner of an unregistered mark will no longer have to prove the reputation of its mark, as well as bad faith on the part of the applicant, to prevent the registration of an identical or similar mark in respect of identical or similar goods; proof of bad faith alone will suffice. If the mark is to be registered in respect of dissimilar goods, the owner will have to prove only that its mark is reputable (as opposed to well known), provided that there is a likelihood of confusion.
  
  
• The owner of an unregistered mark will be entitled to recover damages for wilful infringement.
  
  
• Prior use of a mark will be a valid defence against a claim of infringement, even where the mark is unregistered.

In addition, the office proposes that statutory damages for infringement be increased from a maximum of Rmb500,000 to Rmb1 million.

Other proposed amendments include the following:

• The State Council will introduce rules to regulate trademark agencies.
  
  
• It will be possible to register sounds, scents, motions and combinations thereof as trademarks.
  
  
• Multi-class applications in a single document will be allowed.
  
  
• Trademark registration certificates will be issued only on request.
  
  
• The winning party in opposition proceedings will be entitled to request that the mark in question be transferred directly to it, thus saving time and money.
  
  
• It will no longer be mandatory to register licensing agreements. However, it is still recommended, as an unregistered licensing agreement may not be used against a third party acting in good faith. In addition, production of the original licensing agreement (or a Chinese translation) will no longer be required.
  
  
• It will be possible to prohibit the use or registration of a mark on grounds of dilution.

Howard Tsang, Wilkinson & Grist, Beijing