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03

MAY

2019

Decision to Amend 8 Laws Including Trademark Law of PRC, Anti-unfair Competition Law of PRC,

etc. Made by the Standing Committee of the National People's Congress of PRC

(Passed by the 10th Meeting of the Standing Committee of the 13th National People's Congress of PRC on April 23, 2019)

The following decision is made in the 10th meeting of the Standing Committee of the 13th

National People's Congress:

……

6. To make the following amendments to the Trademark Law of PRC:

(1) The Article 4 (1) of the Trademark Law is amended to:

Any natural person, legal entity or other organization intending to acquire the exclusive right to use a trademark for the goods in the production and operation activities, shall file an application for the registration of the trademark with the Trademark Office. A malicious application for registration of trademark that is not intended for use shall be rejected.

(2) The Article 19 (3) of the Trademark Law is amended to:

Where the trademark agency knows or should know the trademark applied for registration from the entrusted party is in violation of Article 4, Article 15 and Article 32 prescribed in this law, the trademark agency shall not accept the entrust.

(3) The Article 33 of the Trademark Law is amended to:

Where the holder of the prior right or the interested party who considers a preliminarily approved and published trademark is in violation of Article 13(2) and 13(3), Article 15, Article 16(1), Article 30, Article 31, and Article 32 of this law, or where any person considers it is in violation of Article 4, Article 10, Article 11, Article 12, and Article 19(4) of this law, he may, within three months from the date of the publication, file an opposition against the trademark. If no opposition has been filed after the expiration of the time limit from the publication, the registration shall be approved, a certificate of trademark registration shall be issued and the trademark shall be published.

(4) The Article 44 (1) of the Trademark Law is amended to:

Where a registered trademark stands in violation of the provisions of Article 4, 10, 11, 12, and 19 (4) of this Law, or the registration of a trademark was acquired by fraud or any other unfair means, the Trademark Office shall invalidate the registered trademark; and any other organization or individual may request the Trademark Review and Adjudication Board to invalidate such a registered trademark.

(5) The “within 1 to 3 times” of the Article 63 (1) of the Trademark Law is amended to “within 1 to 5 times”. The Article 63 (3)” no more than RMB 3,000, 000 Yuan” is amended to “no more than RMB 5,000, 000 Yuan”. The following (4) and (5) paragraphs are added:

In the trial of trademark infringement dispute cases by the People’s Court, at the request of the infringee, the People’s Count shall order to destroy the goods bearing counterfeited registered trademarks except in some special circumstances; the materials and tools that are mainly used for manufacturing counterfeited goods shall be destroyed and no compensation shall be given. In some special circumstances, the aforesaid materials and tools shall not be allowed to enter commercial channels and no compensation shall be given.

Goods bearing counterfeited registered trademarks shall not be allowed to enter the commercial channels by merely removing these counterfeited trademarks.

(6) The Article 68 (1) (iii) of the Trademark Law is amended to: to violate Article 4, Article 19 (3) and

19(4) of this law. The paragraph 4 is added:

For malicious application of trademark registration, administrative penalties such as warnings and fines shall be given according to the circumstance. For filing malicious trademark litigations, the People's Court shall impose penalty according to law.

7. Amendments for Law of the People's Republic of China against Unfair Competition

(1)Article 9 is amended to “Business operators shall not engage in any of the following infringements upon trade secrets.

a) obtain an obligee's trade secrets by theft, bribery, fraud, intimidation, electronical hacking or other improper means;

b) disclose, use, or allow others to use an obligee's trade secrets obtained by the aforesaid means;

c) disclose, use or allow others to use trade secrets in breach of an obligation of confidentiality or the obligee's requirements on keeping such trade secrets confidential;

d) instigate, induce, assist others to others to breach an obligation of confidentiality or the obligee's requirements on keeping such trade secrets confidential, obtain, disclose, use or allow the others to use an obligee's trade secrets.

Other than a business operator, any natural person or legal person or other unincorporated organization engages in any of the illegal acts specified in the preceding paragraph. Such act shall be deemed as infringement upon the trade secret.

Where a third party knows or should know that the obligee's employee or former employee or any other entity or individual engages in any of the illegal acts specified in the Paragraph 1 of this Article, but still obtains, discloses, uses or allows others to use such trade secret, such practice shall be deemed as infringement upon the trade secret.

For the purpose of this Law, trade secret refers to the business information, such as any technical information or operational information, etc., which is not known to the public, has commercial value, and for which the obligee has adopted corresponding measures for confidentiality.”

(2) Article 17 is amended to “Business operators that violate this Law and causes damage to others shall bear civil liability.

A business operator whose lawful rights and interests are infringed upon by unfair competition conduct may file a lawsuit with a people's court.

The amount of damage caused by any unfair competition to a business operator shall be determined depending on the actual losses suffered by such operator as a result of the infringement. If it is difficult to calculate the actual losses, such amount shall be determined based on the benefits obtained by the infringer from the infringement. Where the operator maliciously carries out the act of infringing trade secrets and the circumstances are serious, the amount of damage may be determined within 1 to 5 times of the amount determined according to the above mentioned ways. The amount of damage shall also include the reasonable expenses paid by the business operator to stop the infringement.

Where a business operator violates the provisions stipulated in Article 6 or Article 9, and it is difficult to determine the actual losses suffered by the obligee as a result of the infringement or the benefits obtained by the infringer from the infringement, the people's court shall decide the damage not more than 5 million yuan to the obligee, depending on the circumstance of the infringement.”

(3) Article 21 is amended to “Where a business operator and other natural person or legal person or other unincorporated organization infringes upon any trade secret in violation of Article 9, the supervision and inspection authorities shall order it to cease the illegal act, confiscate its illegal gains, and impose a fine ranging from 100, 000 yuan to 1,000, 000 yuan. In serious cases, the fine shall be above 500, 000 yuan but not more than 5 million yuan.”

(4) An article is added as Article 32: “In the civil proceeding of infringement upon the trade secret, the obligee of the trade secret has provided the preliminary evidence that the oblige has taken confidentiality measures for its trade secret, and has reasonably prove the trade secret has been infringed, the suspected infringer should prove the trade secret the obligee claims does not belong to the trade secret prescribed in this law.

The obligee of the trade secret provides the preliminary evidence that the trade secret has been infringed and also provides one of the following evidences. The suspected infringer should prove it does not have any act of trade secret infringement.

a) There is evidence to certify that the suspected infringer has access to or has chance to obtain trade secret and that the information used is essentially identical with the trade secret;

b) There is evidence to prove that the trade secret has been disclosed, used or the risk of being disclosed, used by the suspected infringer;

c) There is other evidence to prove that the trade secret has been infringed by the suspected infringer.”

The amendment of Trademark Law of the People's Republic of China will be implemented from November 1, 2019. The amendments of other laws are implemented from the date on which this decision is published.

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