CHINA INTELLECTUAL PROPERTY LAW NEWSLETTER
SPECIAL ISSUE:
A Briefing on the Amended Implementing Rules
of the Trademark Law
Almost one year after the publication of the amended Trademark Law, the State Council of the People's Republic of China amended the Implementing Rules of the Trademark Law on August 3, 2002. While the amended Trademark Law brings China's legislation on trademark protection up to the standard set by TRIPs, the Implementing Rules, which is to be in effect as of September 15, 2002, incorporated significant changes as to the examination procedures of trademark registration. Compared with the Implementing Rules before amendment, the revised version has the following improvements:
Voluntary amendment and assignment
are allowed for pending applications
In the past, voluntary amendment as to registration items was not allowed before a trademark application matures into a registration. For example, if the applicant changes its company name, it would not be able to record the change with the Trademark Office for its pending applications until the marks get registered. The same problem occurs where the applicant wants to assign its pending application to a third party, but cannot complete the assignment deed until the assigned mark is registered. Now, according to Article 17 of the amended Rules, "the applicant can make amendment with the Trademark Office as to the change of applicant's name, address, trademark agent, or delete designated goods/service items. Where the applicant assigns its application, it can complete assignment procedure with the Trademark Office."
The applicant can also apply for the deletion of some of designated goods/services during the publication (opposition) period. In such cases, the Trademark Office will withdraw the first publication and arrange to publish the mark with the remaining designated goods/services.
Partial opposition/cancellation is
introduced to trademark dispute cases
In the past, when a party raised an opposition to a published application based on its prior similar registration/application, even if the prior conflicting right was only in respect of some of the goods/services, the Trademark Office could still reject the application as a whole. Such adjudication renders broader protection to the prior conflicting right than is warranted and is arguably unfair to applications with a later filing date. The same problem occurs with cancellation actions against registered trademarks.
The amended Rules adopts partial cancellation/opposition. That is, if an application/registration is in conflict with a prior right in respect of some of designated goods/services, the application/registration can still remain valid for the remaining non-conflicting goods/services.
The same is true with respect to three-year non-use cancellations. When the Trademark Office or a third party initiates a three-year non-use cancellation action against a registration, the registrant should provide evidence of use for the designated goods/services within a prescribed period of time. In the past, if the registrant can provide sufficient evidence of use for one of the designated goods/services, the whole mark will be deemed as in use. Under the new Rules, evidence of use should be submitted for every good/service or the registration will be cancelled under the unused goods/services.
Geographic indications to be registered
as certification or collective marks
Geographic indications are not the same as marks composed of a place name. Geographic indications should indicate that the goods originate from a particular area and the specific quality, repute or other features are determined mainly by natural factors or human factors of the area. Such signs cannot be monopolized by an individual enterprise. The amended Rules provide that geographic indications can be registered as certification trademarks or collective trademarks. Any individual or entity qualified to use the geographic indication may apply to use the certification mark with the certification mark owner or apply to join the organization or association that owns the collective mark. Even if the individual (or entity) qualified to use the geographic indication does not apply for membership with the collective mark owner, the owner of the collective mark cannot bar his (its) proper use of the geographic indication.
Oral hearing is possible for cases examined by TRAB
Before the Rules were amended, an oral hearing was very rare in cases examined by the Trademark Office (TMO) or the Trademark Review and Adjudication Board (TRAB). Now according to the amended Rules, the TRAB may hold oral hearings open to the public at the request of the concerned parties or on its own initiative. The availability of oral hearings certainly will give both parties the opportunity to fully present their arguments to the examiners of the TRAB, particularly in complex cases.
The amended Rules also provide that the TRAB will draft and publish new examination guidelines to match the amended Rules.
Specific provisions are stipulated for
the protection of well-known trademarks
Article 13 of the amended Trademark Law explicitly provides that well-known marks enjoy broader protection than "ordinary" marks. Article 14 of the Trademark Law provides several principles in judging whether a mark is qualified as a well-known mark in a specific case.
Articles 45 and 53 of the amended Implementing Rules provide more detail for the protection of well-known marks. Article 45 provides that if a well-known mark owner that does not hold any registration of its well-known mark in China finds a third party is using a confusingly similar mark for similar or identical goods, or if a well-known mark owner who owns a registration for its well-known mark in China finds a third party is using a mark for dissimilar goods and such use may mislead the public and cause damage to the interest of the well-known mark owner, the well-known mark owner can complain with the local administrations for industry and commerce (local AICs) and request the local AIC to stop the use. When the applicant launches the complaint, it must submit documentation evidencing that its mark is well known. The local AIC will then pass the documentation to the Trademark Office for its recognition of the well-known status of the mark according to Article 14 of the Trademark Law. However, even if the Trademark Office recognizes the mark as well-known, the local AIC can only order the infringer to stop the infringing acts, forfeit and destroy infringing labels, and forfeit and destroy goods with infringing labels if the labels cannot be peeled off the goods. The local AIC cannot impose a fine on the infringer like in other infringements of registered trademark rights. However, lack of a fine does not mean that the well-known mark owner cannot seek civil remedies from court.
Article 53 of the amended Rules provides that when a well-known trademark owner finds that a third party has registered its well-known mark as part of an enterprise name that is likely to deceive or mislead consumers, the trademark owner may apply to the enterprise registry (local AICs) for the cancellation of the enterprise name.
Heavier fines are imposed on infringers
Before the amendment, fines should not exceed 50% of the total illegal business or five times the profit earned in the infringement. The amended Rules increase the amount of possible fines. Article 52 of the Rules provide that the fine should not exceed 3 times the total illegal business. If the amount of illegal business cannot be calculated, the fine should be below RMB100,000 (equal to US $12,050).
The above is a summary of the major changes between the amended Implementing Rules and the prior version. Such changes not only further clarify examination procedures, but also allow for better administrative protection to registrants.
A COMPLETE TRANSLATION OF THE IMPLEMENTING RULES WILL BE POSTED ON WWW.LEHMANLAW.COM.
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The China Intellectual Property Law Newsletter is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu will not be held responsible for any such reliance on its contents.
