The China National IP Administration (CNIPA) recently published a draft amendment of the PRC Trademark Law for public comment. The changes – which are summarized below – are mainly intended to address bad faith trademark registration.
While the timing for enactment remains unclear, typically the process takes two to three years from publication of the first draft.
A SIPS translation, including a comparison alongside the current law, is available here.
For the original Chinese text, please click here.
SIPS is currently preparing a white paper that will offer more a more detailed explanation and assessment of the proposed changes to the law. In the meantime, a summary of the most significant changes follows below.
- Proof of Use Every Five Years – The draft would require all registrants to submit a declaration or evidence of trademark use to CNIPA every five years or otherwise provide an acceptable explanation for the lack of use.
- Prohibition on Refiling – The draft would meanwhile prohibit parties from filing repeatedly for the same trademark – a practice often used by bad faith filers, but also exploited by bona fide brand owners seeking to avoid gaps in protection under various circumstances.
- Penalties for Bad Faith Registration – The draft increases the maximum level of administrative fines that can be imposed against bad faith filers in serious cases to RMB250,000 (US$32,000). The draft also proposes criminal prosecution in particularly serious cases that impact on public order.
- Compensation from Bad Faith Filers – The draft also proposes allowing victim brand owners to seek compensation from bad faith actors to cover their “reasonable expenses”. Under current practice, Chinese courts have generally only allowed such recoveries where the pirate has engaged in other forms of unfair competition, including use of the plaintiff’s mark and/or interfering with sales of genuine products through the filing of infringement actions, as well as oppositions.
- Transfer of Trademarks – The draft would allow authorities to order the transfer of a trademark under opposition or invalidation to the rightful owner.
- Suspension of Administrative Proceedings – The draft would allow administrative authorities to suspend handling of cases where the outcome hinges upon the results of other co-pending proceedings, such as oppositions, invalidations and appeals.
- Forged Evidence – The draft would allow fines of up to RMB 100,000 (US$13,000) against parties that file false or misleading evidence.
- Opposition Period – The draft would reduce the current three-month deadline for filing of oppositions to two months, thus slightly accelerating the time required to secure registrations.
- Liability for Online Trade Platforms – Codifying existing practice, the draft mentions online trade platforms as examples of parties that can subject to contributory liability for trademark infringement.
- New Requirements for Trademark Agencies – The draft would reinstate requirements that trademark agencies meet a number of minimum requirements to operate.
There are also a number of important issues for brand owners that are not addressed in the draft law, but which will no doubt be mentioned in advocacy papers prepared by SIPS and others. Examples include:
- Difficulties in persuading registry authorities to approve registrations on the basis of consent letters.
- The burdens and costs created as a result of legalization requirements.
- Lack of enforcement of existing regulations that allow acceleration and consolidation of cases against bad faith filers.
- Limited access to preliminary injunctions.
- Limited involvement by administrative enforcement authorities in investigating and penalizing online infringements.
The draft is open for public comment until February 27 2023.