Authored by He Jing (firstname.lastname@example.org)
China is in the midst of uploading its Trademark Law. After two years of research and consultation, the State Council recently approved the latest draft amendment, and officially submitted the draft to the National People’s Congress for a first reading in mid-December 2012. The latest version was released for public comment by the National People’s Congress on January 4, 2013. The period for submitting comments ends on January 31, 2013. Therefore, the amendment may be finally ratified in the first half of this year.
The latest draft proposes to amend approximately 40 provisions. While some of the changes were anticipated, others had not been previously reported. An early review of the proposed changes suggests that trademark applications and enforcement work in China may undergo some substantial changes- assuming that all the changes go through.
The major changes include the following:
· Trademark subject matter has been expanded to include sounds.
· Trademark applications will be allowed to cover goods in multiple classes. This will alleviate some of the burden on applicants wishing to file in multiple classes.
· There will be substantial changes to apposition proceedings, including the imposition of limitations on the parties that are eligible to file appositions. Under the proposed changes, an opponent can cite only its prior rights as grounds for an opposition. Another change is that, once an opposition decision has been issued by the Trademark Office. It will have immediate effect. The losing opponent will have to file an invalidation action to continue the fight, while the opposed mark will be registered immediately.
· Contributory infringement and unauthorized use of trademark in trade names will be legally sanctioned under the Trademark Law.
· The burden of proof placed on trademark owners with regard to damages will change substantially. The defendant will be ordered to pay compensation based on the trademark owner’s evidence if the defendant fails to submit its financial information.
· Punitive damages will be imposed in cases of willful infringement.
· A defendant may request that the trademark owner prove the actual use of its trademark. Failure to prove actual use may result in no damages being awarded.
Worryingly, two of the most significant concerns among international and domestic brand owners — bad-faith trademark fillings and online counterfeiting- are not addressed in the latest draft. However, the changes concerning oppositions and proof of actual use may arguably have some benefits in the fight against bad-faith trademark filers. Moreover, the latest draft refers to distributions or agents who make ‘pirate’ trademark filings. Nevertheless, no substantive rules are proposed to address the increase in bad-faith activities. Whether the National People’s Congress makes a dramatic shift in these areas will be closely monitored after the public comment period ends on January 31.