The Chinese trademark conundrum: will a new law solve the current problems?
In December 2012 a new draft of the Trademark Law was released by the National People’s Congress, the Chinese legislative body. Considering that the current Trademark Law has been in force from 2001 and that the draft is the third issued in recent years, the trademark community expected something more.
In particular, a stronger will for change in relation to bad faith registration, enforcement and improving quality was expected from the Chinese Trade Mark Office (CTMO) and Trademark Review and Adjudication Board (TRAB).
Going through the main amendments, the following are noteworthy.
Bad faith registrations
Article 9 of the draft introduces a general principle: “The application for registration and use of a trademark shall be made in good faith.” Article 15 contains a new paragraph which prescribes that not only trademarks filed by “agents or representatives” will not be registered, but even trademarks filed by business partners if proved that they “definitely know” of the existence of the trademark.
“THE AIC SHALL GIVE A HEAVIER PUNISHMENT TO THOSE WHO HAVE COMMITTED TRADEMARK INFRINGEMENT TWICE OR MORE WITHIN FIVE YEARS AND TO THOSE WITH OTHER ESPECIALLY SERIOUS CIRCUMSTANCES.”
These provisions should support the already existing ones, namely Article 34 (corresponding to Article 31 in the current law) and Article 4. The former excludes the registration of a trademark that “harms another person’s prior rights” or that “has been used by another person and has a certain influence” and the “use of unfair means” is proved. The latter has been construed as requiring a sort of intention to use the mark against so-called ‘trademark warehouses’.
Unfortunately, these modifi cations do not seem enough to curb the dramatic situation of bad faith registrations. Indeed there is no definition of ‘good faith’ and ‘bad faith’, which leaves the grounds for interpretation to CTMO/TRAB and the People’s Court. Moreover, the wording “definitely knows” used in Article 15 is not promising since it fi xes a pretty high threshold. Perhaps “knew or should have known” would be more encouraging.
Enforcement
The new draft contains several modifications to the existing provisions which in general increase economic penalties.
