China passes new Trademark Law

On 30 August 2013 the Standing Committee of the National People's Congress, China's top legislative body, passed the third revision to the Trademark Law. The new law will take effect on 1 May 2014. Here are some of the main changes:

Faster prosecution: Under the former law there were no time limits for prosecuting applications, oppositions, requests for cancellation, or disputes, and proceedings were very slow. The law has been amended to specify time limits of from 9 to 12 months for each proceeding, extendible for 6 or 12 months.

Sound and other non-traditional trademarks The new law paves the way for registration of sound marks and other non-traditional marks, though the latter are not specifically mentioned in the amended version of the law.

Multi-class filings Up to now, trademark filings in China have required a separate application for each class, even for the same trademark. Under the new law, China joins other countries, like Spain, in allowing a single application to claim multiple classes.

Electronic filing: Applications may be filed electronically now, but only on a limited basis. The new law specifies electronic filing as a valid means of filing applications and also makes provision for the electronic filing of all sorts of documents relating to an application.

Labeling of well-known brands: From entry into force of the new Trademark Law, sellers and manufacturers will not be able to label their products as well known in any sector of trade. In the event of non-compliance, the seller/manufacturer may be fined RMB 100,000 (approximately 12,500 euros).

New grounds for contesting bad-faith applications: Under the provisions of the new law, a trademark shall not be registered for goods that are the same or similar to those on which an earlier mark has been used where the applicant for the trademark has had a contractual, business, or other relationship with the owner of the earlier identical or similar mark and had knowledge of the earlier mark.

Calculation of damages

For license agreements: Where bad-faith infringement has resulted in serious harm, the courts may award damages of up to three times the royalty.

Discovery of accounts: The new law allows the courts to order defendants to hand over their account books and other material relating to the infringement, depending on the circumstances of the case.

Proof of genuine trademark use by complainants: Defendants shall be exempt from paying damages where complainants cannot prove genuine use of their trademark in the three years preceding the complaint and are unable to prove other losses sustained as a result of infringement.

Damages of up to RMB 3 million: Under the current law, where damages sustained by complainants and illegal gains by infringers cannot be calculated, courts may set damages in infringement proceedings at up to 500,000 yuan (approximately 62,500 euros). The new law increases the court's discretion six-fold, to RMB 3 million (approximately 375,000 euros).

Administrative fines: Under the new law administrative fines may be up to five times the value of illegal turnover where the turnover is greater than RMB 50,000 (approximately 6,250 euros) or up to RMB 250,000 (approximately 31,250 euros) where the turnover cannot be established or is less than RMB 50,000 (approximately 6,250 euros).

Authors: Marcos García and Gergana Dimitrova

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