On April 23, the Standing Committee of the National People's Congress, China's top legislature, approved revisions to eight laws, on construction, fire protection, electronic signature, urban-rural planning, vehicle and vessel tax, trademark, anti-unfair competition and administrative permission.
The fourth amended Trademark Law will come into effect on November 1, 2019. The amendment aims at combating bad faith application without actual intention to use, strengthening punishments on trademark infringement and raising the statutory damage from maximum 3 million yuan to maximum 5 million, curbing the number of bad faith applications or litigations by giving more responsibilities to Chinese trademark agencies, etc.
Traditionally, the pirated trademarks can be opposed when they are preliminarily approved and published and can be invalidated when they are registered. However, such procedures are slower and more costly for the opposition or invalidation applicants. The amended law gives the examiner more legal bases to combat bad faith bulk applications without intention to use in the early stage of examination so that the bad faith applications can be restricted more effectively and economically.
However, how to implement the amended articles, e.g., “bad faith application without intention to use the mark shall be rejected”, requires further specific implementing regulations and law interpretations. We look forward to them.
The previous three amendments underwent longer processes. The fourth amendment was quite faster. We believe it was promoted by circumstances, both domestically and internationally.
The articles with the amendments underlined are as follows.
Article 4. Any natural person, legal person or other organization, intending to acquire the exclusive right to use a mark for his goods or services in his production and business operations, shall apply for registration of the mark to the Trademark Office. Bad faith application without intention to use the mark shall be rejected.
Article 19. The trademark agency shall follow the principle of good faith, comply with the provisions of laws and administrative regulations and handle the applications for trademark registrations and other trademark matters according to the instruction of its clients. In respect of the commercial secrets of the clients learned in the procedure of acting on behalf of the clients, the agency shall bear the obligation to keep them confidential.
If a trademark for which the registration is applied by the client is possibly under the circumstances of not being approved registration as required in this law, the trademark agency shall inform the client of this explicitly.
If a trademark agency knows or shall know that the trademark for which the client intends to apply belongs to the circumstances provided in Article 4, Article 15 and Article 32 of this law, the trademark agency shall not accept the entrustment.
Article 33. The prior right owner or any interested party may, within three months from the date of preliminary publication of a mark, files an opposition to it if he finds that the application stands in violation of the provisions of the second and the third paragraphs of Article 13, Article 15, the first paragraph of Article 16, Article 30, Article 31 or Article 32 of this law, or any person may file an opposition to it within the same three-month period if he finds that the application stands in violation of the provisions of Article 4, Article 10, Article 11, Article 12, or the fourth paragraph of Article 19 of this law. If no opposition is filed within the specified period, the trademark shall be registered, a certificate of registration shall be issued, and the registration shall be published.
Article 44. Where a registered trademark stands in violation of the provisions of Article 4, Article 10, Article 11, Article 12, or the fourth paragraph of Article 19 of this Law, or the registration of a trademark has been acquired by fraud or any other unfair means, the Trademark Office shall declare the registered trademark invalid; any other organization or individual may request the Trademark Review and Adjudication Board to declare such a registered trademark invalid.
Article 63. The amount of damage for infringement on the exclusive right to use a registered trademark shall be determined on the basis of the actual losses suffered by the right holder because of the infringement; where it is difficult to determine the actual loss, the amount of damage may be determined on the basis of the profits the infringer has earned because of the infringement. Where it is difficult to determine the losses the right holder has suffered or the profits the infringer has earned, the amount of damage may be determined by reference to the appropriate multiple of the amount for using the registered trademark under a contractual license. Where the infringement of the exclusive right to use a registered trademark is committed in bad faith and the circumstance is serious, the amount of damage shall be more than one time but less than five times of the amount determined by referring to the above calculation. The amount of the damage shall also cover the reasonable expenses paid by the right holder for stopping the infringing act.
Where it is difficult to determine the actual loss suffered by the right holder, the profits gained by infringer, or the fees from licensing a registered trademark, the People's court shall render a judgment awarding damage in an amount not more than RMB 5,000,000 yuan, according to the circumstances of the act of infringement.
In handling trademark disputes, the People's court shall, at the request of the right holder, order the destruction of commodities bearing counterfeit registered trademarks, except under special circumstances; order the destruction of materials and tools mainly used to manufacture commodities bearing counterfeit registered trademarks without compensation; or, under special circumstances, order the prohibition of the aforementioned materials and tools from entering commercial channels without compensation.
Commodities bearing counterfeiting registered trademarks shall not enter commercial channels after only having the counterfeit registered trademarks removed.
Article 68. Where a trademark agency commits any of the following acts, the administrative authority for industry and commerce shall order it to rectify within specified time limit, give a warning, or impose a fine of more than RMB10,000 yuan but less than 100,000 yuan, and shall give warnings to the executives directly responsible and other staff directly responsible and impose them a fine of more than RMB5,000 yuan but less than RMB50,000 yuan, and if a crime is constituted, a criminal liability shall be investigated according to the provisions of the criminal law:
(1) to forge, alter or use forged or altered legal documents, seals or signatures in handling trademark matters;
(2) To attract trademark business by defaming other trademark agencies or to disturb the trademark agency market order by other unfair means; or
(3) To violate the provisions of Article 4, the third and the fourth paragraphs of Article 19.
Administrative penalties such as warnings and fines shall be imposed on a trademark agency who handles bad faith applications according to the circumstances; the people's court shall impose penalties on malicious trademark litigations according to law.