According to the 10th Meeting of the Standing Committee on April 23, 2019, the new PRC Trademark Law has been formally implemented since November 1, 2019 (please see the new PRC Trademark Law at http://sbj.cnipa.gov.cn/zcfg/sbflfg/20191122_308740.html )

Important Changes

A. Reinforcing pressure on the rush-registrations in bad faith;

B. Explicitly raising compensation standard; and

C. Refining Article 63 of the PRC Trademark Law and stopping the counterfeits.

Articles Comparison

There are some significant points in the new PRC Trademark Law:

Issues &
Significance

Comparison

Rush-registrations without intention to use

(Article 4)

Old

Any natural person, legal person, or other organizations that needs to acquire the exclusive right to use a trademark in the production and operation activities shall file an application for trademark registration with the Trademark Office.

Provisions of the Law regarding goods marks apply to service marks.

New

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

Provisions of the Law regarding goods marks apply to service marks.

Registrations filed by IP Agents

(Article 19.3)

Old

The trademark agency shall apply for registered trademarks or handle any other trademark matters authorized by the clients based on the principle of integrity, honesty and credibility and in accordance with laws and administrative rules and regulations; and the trademark agency shall assume confidentiality obligations for trade secrets of the client obtained during the agency.

The trademark that the client applies for registration may not be registered in accordance with the Law, in which case the trademark agency shall explicitly notify the client.

The trademark agency knows or has already known that, where the client applies for a trademark that falls into Article 15 and Article 32 hereof, the trademark agency shall not accept the entrustment.

Except for the registration of trademarks on behalf of client, the trademark agency shall not apply for the registration of any other trademarks.

New

The trademark agency shall apply for registered trademarks or handle any other trademark matters authorized by the clients based on the principle of integrity, honesty and credibility and in accordance with laws and administrative rules and regulations; and the trademark agency shall assume confidentiality obligations for trade secrets of the client obtained during the agency.

The trademark that the client applies for registration may not be registered in accordance with the Law, in which case the trademark agency shall explicitly notify the client.

The trademark agency knows or has already known that, where the client applies for a trademark that falls into Article 4, Article 15 and Article 32 hereof, the trademark agency shall not accept the entrustment.

Except for the registration of trademarks on behalf of client, the trademark agency shall not apply for the registration of any other trademarks.

Registrations from business partners, distributors, etc.

(Article 33)

Old

Where any prior right owner or interested person believes that provisions of Paragraphs 2 and 3 of Article 13, Article 15, Paragraph 1 of Article 16, Article 30, Article 31 or Article 32 of the Law have been breached or any person believes that the provisions of Article 10, Article 11 or Article 12 have been violated, it may raise an objection to the Trade Office against a trademark that has been published after a preliminary examination within three months from the date of announcement. When no objections have been raised upon expiration of such period, the application shall be approved for registration with issuance of a certificate of trademark registration and announcement of the trademark.

New

Where any prior right owner or interested person believes that provisions of Paragraphs 2 and 3 of Article 13, Article 15, Paragraph 1 of Article 16, Article 30, Article 31 or Article 32 of the Law have been breached or any person believes that the provisions of Article 4, Article 10, Article 11 or Article 12 and Paragraph 4 of Article 19 have been violated, it may raise an objection to the CNIPA against a trademark that has been published after a preliminary examination within three months from the date of announcement. When no objections have been raised upon expiration of such period, the application shall be approved for registration with issuance of a certificate of trademark registration and announcement of the trademark.

Fraud registrations

(Article 44.1)

Old

The Trademark Office shall annul the registered trademark if it violates the provisions of Articles 10, 11, and 12 of the Law, or it was acquired by fraud or any other improper means. Other units or individuals may request the Trademark Review and Adjudication Board for a ruling to annul such a registered trademark.

The Trademark Office shall notify the party concerned in writing of the nullification of the registered trademarks. Where the party concerned is dissatisfied with the ruling may apply to the Trademark Review and Adjudication Board for a review within 15 days from the receipt of the notice. The Trademark Review and Adjudication Board shall make a ruling within nine months from the receipt of the application, and notify the party concerned in writing. In case of prolonging such period for certain special situations, it may be prolonged for three months after the approval of the administrative department for industry and commerce under the State Council. In the event that the party concerned is dissatisfied with the ruling of the Trademark Review and Adjudication Board, it may appeal to the People's Court within 30 days from receipt of the notice.

Where other units or individuals request the Trademark Review and Adjudication Board for nullification of a registered trademark, the Trademark Review and Adjudication Board shall notify relevant parties upon receipt of the application, and request them to submit arguments within a specified time. The Trademark Review and Adjudication Board shall make a ruling on maintaining or nullification of registered trademark, and notify the party concerned of such ruling. Where the period is required to be prolonged in special circumstances, it may be extended by three months after the approval of the administrative department for industry and commerce under the State Council. In the event that the party concerned is dissatisfied with the ruling of the Trademark Review and Adjudication Board, it may appeal to the People's Court within 30 days from receipt of the notice. The people's court shall notify the counterparty of the trademark ruling procedures of participation in the proceedings as a third party.

New

The CNIPA shall annul the registered trademark if it violates the provisions of Article 4, Article 10, Article 11, Article 12 and Paragraph 4 of Article 19 of the Law, or it was acquired by fraud or any other improper means. Other units or individuals may request the Trademark Review and Adjudication Board for a ruling to annul such a registered trademark.

The CNIPA shall notify the party concerned in writing of the nullification of the registered trademarks. Where the party concerned is dissatisfied with the ruling may apply to the CNIPA for a review within 15 days from the receipt of the notice. The CNIPA shall make a ruling within nine months from the receipt of the application, and notify the party concerned in writing. In case of prolonging such period for certain special situations, it may be prolonged for three months after the approval of the administrative department for industry and commerce under the State Council. In the event that the party concerned is dissatisfied with the ruling of the CNIPA, it may appeal to the People's Court within 30 days from receipt of the notice.

Where other units or individuals request the CNIPA for nullification of a registered trademark, the CNIPA shall notify relevant parties upon receipt of the application, and request them to submit arguments within a specified time. The CNIPA shall make a ruling on maintaining or nullification of registered trademark, and notify the party concerned of such ruling. Where the period is required to be prolonged in special circumstances, it may be extended by three months after the approval of the administrative department for industry and commerce under the State Council. In the event that the party concerned is dissatisfied with the ruling of the CNIPA, it may appeal to the People's Court within 30 days from receipt of the notice. The people's court shall notify the counterparty of the trademark ruling procedures of participation in the proceedings as a third party.

Infringement and Compensation (Article 63)

Old

The amount of compensation for infringing the exclusive right to use the trademark shall be determined based on the right owner's actual losses due to infringement or the infringer's actual interests obtained due to the same if the actual losses are hard to be determined, or may be determined based on times of the royalties of the registered trademark when both the losses or the infringer's actual interests obtained are hard to be determined. For seriously malicious infringement, the amount of compensation may be one time – three times of the aforesaid amount determined in light of the foregoing regulations. The amount of compensation shall include reasonable expenses of the right owner to prevent the infringement.

For the purpose of determining the amount of compensation, where the account books and information regarding the infringement are held by the infringer while the right owner has put to the proof as practical as possible, the People's Court may order the infringer submit such account books and information; in case the infringer refuses to submit the account books and information or submit a false version thereof, the People's Court may determine the amount of compensation with reference to the right owner's claim and proof.

Where it is hard to determine the right owner's actual losses due to infringement, the infringer's actual interests obtained due to the same or the royalties of the registered trademark, the People's Court shall, based on the actual circumstance of infringement, bring in a verdict of amount up to CNY3 million.

New

The amount of compensation for infringing the exclusive right to use the trademark shall be determined based on the right owner's actual losses due to infringement or the infringer's actual interests obtained due to the same if the actual losses are hard to be determined, or may be determined based on times of the royalties of the registered trademark when both the losses or the infringer's actual interests obtained are hard to be determined. For seriously malicious infringement, the amount of compensation may be one time – five times of the aforesaid amount determined in light of the foregoing regulations. The amount of compensation shall include reasonable expenses of the right owner to prevent the infringement.

For the purpose of determining the amount of compensation, where the account books and information regarding the infringement are held by the infringer while the right owner has put to the proof as practical as possible, the People's Court may order the infringer submit such account books and information; in case the infringer refuses to submit the account books and information or submit a false version thereof, the People's Court may determine the amount of compensation with reference to the right owner's claim and proof.

Where it is hard to determine the right owner's actual losses due to infringement, the infringer's actual interests obtained due to the same or the royalties of the registered trademark, the People's Court shall, based on the actual circumstance of infringement, bring in a verdict of amount up to CNY 5 million.

When a People's Court hears a trademark dispute case, at the request of the rights holder, the goods belonging to the counterfeit registered trademark shall be ordered to be destroyed except in special circumstances; the materials and tools mainly used for the manufacture of counterfeit registered trademarks shall be ordered to be destroyed and shall not be compensated. Or, in exceptional circumstances, order the prohibition of the aforementioned materials and tools from entering the commercial channel without compensation.

Products that are counterfeit registered trademarks may not enter commercial channels only after the removal of counterfeit registered trademarks.

Counterfeits and Compensation

(Article 68)

Old

If a trademark agency has any one of the following conducts, the administrative department for industry and commerce shall order the agency organization to rectify the same within a specified time, give corresponding warning and impose a fine of more than CNY10,000 up to CNY100,000; and give warnings to management in direct charges and the other persons in direct charge and impose a fine of more than CNY5,000 up to CNY50,000; those who have committed crimes shall be held for criminal responsibilities:

Forging/altering legal documents, seals or signatures or using forged/altered legal documents, seals or signatures during the process of handling trademark-related matters;

Soliciting agency business by slandering other trademark agencies or disturbing the trademark agency market order by other unjust means; and

Violating provisions of Paragraphs 3 and 4 of Article 19 of the Law.

Where a trademark agency has had conducts stipulated in the previous paragraph, it will be recorded by the administrative department for industry and commerce in the files of credits; in case of serious circumstances, the Trademark Office and the Trademark Review and Adjudication Board may cease accepting its agency business and make relevant announcement.

Where a trademark agency violates the principle of good faith and thus infringes the client's legal interests, such organization shall bear relevant civil liability according to law and be punished by the industry organization of trademark agency in accordance with the articles of association.

New

If a trademark agency has any one of the following conducts, the administrative department for industry and commerce shall order the agency organization to rectify the same within a specified time, give corresponding warning and impose a fine of more than CNY10,000 up to CNY100,000; and give warnings to management in direct charges and the other persons in direct charge and impose a fine of more than CNY5,000 up to CNY50,000; those who have committed crimes shall be held for criminal responsibilities:

Forging/altering legal documents, seals or signatures or using forged/altered legal documents, seals or signatures during the process of handling trademark-related matters;

Soliciting agency business by slandering other trademark agencies or disturbing the trademark agency market order by other unjust means; and

Violating provisions of Article 4 and Paragraphs 3 and 4 of Article 19 of the Law.

Where a trademark agency has had conducts stipulated in the previous paragraph, it will be recorded by the administrative department for industry and commerce in the files of credits; in case of serious circumstances, the CNIPA may cease accepting its agency business and make relevant announcement.

Where a trademark agency violates the principle of good faith and thus infringes the client's legal interests, such organization shall bear relevant civil liability according to law and be punished by the industry organization of trademark agency in accordance with the articles of association.

For malicious registration of trademark registration, administrative penalties such as warnings and fines shall be given according to the circumstances; if a trademark lawsuit is filed maliciously, the people's court shall impose punishment according to law.

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