This partial, however fast, revision of the PRC Trademark Law might be one of the effects of the continued change negotiations between China and the United States. The revision focuses on critical issues: (1) the proliferation of unused trademarks and (2) the enforcement moves against infringers.
The proliferation of unused trademarks
More than 7 million logos carried out for three hundred and sixty-five days is, certainly, becoming a hassle. Many of these trademarks are implemented for and registered for different reasons than their use (e.g., receiving subsidies, re-selling, etc.). Some of those logos are even filed in overall bad faith.
The revision touches especially on Article 4 (the general precept defining who might also practice for a trademark), not directly by referencing Article 7 (declaration of correct faith in making use of for and using brands). Article 4 affords that a person who “…. Desires to gain the exceptional right to apply a trademark for (one’s) goods or offerings throughout production and enterprise operations” may file a utility for a hallmark.
The State Council proposed, on 20 April 2019, to feature the following wording: “Any utility for the registration of a hallmark that isn’t always meant to be used shall be rejected.” This far-attaining proposition created trouble.
This proposed modification contradicts article forty-nine of the regulation, which presents that where a hallmark has no longer been used for three consecutive years without proper reason, any man or woman may additionally report an application with the Trademark Office for the revocation of the trademark. Since Article 49 no longer imposes any obligation to apply for the duration of the primary three years following the registration, how ought a trademark application be refused for lack of intention to use?
Besides, members of the National People’s Congress (NPC) objected that it is not unusual for valid organizations to record “protecting” logos so one can defend their marks in lessons of products greater or much less associated with their core enterprise and avoid the risk of dilution or having to record hard oppositions based totally on popularity.
This is why, after deliberation, the NPC decided to feature the phrase “horrific faith” (which is immediately related to the principle of article 7) so that the final textual content reads: “Any bad religion application for the registration of an indicator that isn’t always meant for use will be rejected.”
Two unbiased situations are, consequently, wished: no intention to use and terrible religion.
It can be tough for an examiner to realize whether the software is made in the top or terrible faith, which is a good way to be fully effective. This amendment becomes prolonged to (1) the duty of trademark retailers and (2) oppositions and invalidation techniques.
In terms of (1), Article 19. Three now gives that a hallmark agent ought to take no longer delivery of being entrusted where he is aware of or ought to recognize that the amended article four is violated. Furthermore, article sixty-eight provides that if a trademark agent documents emblems in horrific faith, it can be warned or punished. If proceedings are initiated in terrible faith, they could be punished using the Court.
In the period of (2), Article 33, as amended, presents that oppositions may be filed using any birthday party that believes that the amended Article four and Item 19. Four are violated for article 44 (invalidations), the equal connection between articles four and 19. Four is introduced.
Another question may be: will the brand new Article 4 practice emblems already register or logos in the registration system? Theoretically, now, not, because a new regulation has to have a retroactive impact no longer. But one may don’t forget that the 2001 Trademark Law had such retroactive outcomes for well-known marks. It will be interesting to see whether the -new regulation will deal with the inventory of already registered/filed and unused emblems.
Enforcement of emblems
Article sixty-three gives that, wherein an act of infringement is dedicated in terrible religion, and the circumstances are extreme, the quantity of compensation may be elevated by way of 3. The new article sixty-three raises this viable augmentation as much as “five instances.”
Article sixty-three additionally gives for the most statutory damages of RMB3 million (US$436,000) if it seems hard to calculate the precise quantity of prejudice or illegal profits. The amended law raises the statutory amount to RMB5 million.
And subsequently, the revised article 63 deals with the stock of counterfeit items. It offers that, besides in special circumstances, they ought to be destroyed, together with the “substances” and equipment “especially” used to manufacture them. Furthermore, the stated materials and tools may not re-input the commercial enterprise channels if they’re not destroyed. Finally, the revised article 63 clarifies that counterfeit items may not re-enter the business channels, even supposing the eliminated trademark.
This is a pretty encouraging improvement, as, in addition to tools, the Court can order the destruction of substances used to manufacture counterfeit items. This amendment fills an opening and is welcome.
This development isn’t without regret:
It issues the simplest registered trademarks which exclude unregistered famous marks;
It is constrained to “commodities bearing a counterfeit registered trademark,” excluding all other infringing goods (comparable trademarks) or goods bearing unregistered well-known emblems. Is this restriction made on the cause? Why must the powers of the courts be narrower than that of the administration?