New trademark law to be effective on 1st December 2001

The 24th Session of the Standing Committee of the Ninth National People's Congress adopted the amendments to the Trademark Law on 27th October 2001. The new law will become effective as of 1st December 2001.

The major changes of the law are as follows:

1. A broader definition of trademark that can be registered. A trademark that can be registered is now defined as "any sign that is capable of being represented graphically which is capable of distinguishing goods or services of one natural person, legal person or entity from that of the others, including words, designs, letters, numerals, three dimensional devices and color schemes as well as combinations thereof" (Article 8).
   
   
2. Relatively drastic changes to the absolute grounds for refusal of registration, as provided in Article 10, 11 and 12. In particular, Article 11 provides the following sign shall not be registered as a trademark: if it consists exclusively of the generic name, device and model of the goods; if it directly serves to designate the quality, main raw material, function, usage, weight, quantity or other features of the goods; if it is devoid of any distinctive character.
   
   However, a trademark that has in fact acquired a distinctive character as a result of the use made of it and distinguishable can be registered.
   
   In the case of three dimensional devices, a sign shall not be registered if it consists exclusively of the shape which results from the nature of the goods themselves, the shape of goods which is necessary to obtain a technical result, or the shape which gives substantial value to the goods (Article 12).
   
   
3. Addition of a clause to protect well-known trademarks in China. Article 13 (a) provides "where a trademark seeking registration in respect of identical or similar goods is a copy, imitation or translation of a well known mark not yet registered in China hence is likely to cause confusion shall not be registered and shall be prohibited from using", Article 13 (b) further provides "where a trademark seeking registration in respect of non-identical and non-similar goods is a copy, imitation or translation of a well known trademark registered in China hence is likely to mislead the public and detrimental to the interest of the proprietor of the well known trademark, should not be registered and should be prohibited from using". Besides, Article 14 further provides the factors to be taken into consideration in the process of recognizing the well known status of a trademark.
   
   
4. Decision of the Trademark Review and Adjudication Board (TRAB) now subject to appeal. The decision of the TRAB is no longer final. According to Article 32, Article 33, Article 43 and Article 49, any decision made by the TRAB can be appealed to the People's Court, within a term of thirty days after the receipt of the decision thereof.
   
   
5. Preliminary injunction now available. Article 57 provides that where the trademark registrant or interested party has evidence to prove that a thirty party is infringing or is about to infringe the rights of a registered trademark, and that if such infringing act is not timely stopped, is likely to cause irreparable damage, he may, before initiating legal proceedings, request the People's Court to adopt measures for ordering the stoppage of such act and the preservation of property.
   
   Article 58 further provides for the purposes of stopping infringement act, under the circumstance where there is a likelihood that evidence may be destroyed or lost or difficult to obtain later, the trademark registrant or interested party may request the People's Court that the evidence be preserved before initiating legal proceedings.
   
   
6. Liability for damages now includes award for attorney fee. Article 56 (a) provides that the amount of compensation for the damage caused by the infringement shall be assessed on the basis of the profits earned by the infringer or the loss suffered by the infringed party, including reasonable costs for the stopping the infringement on the part of the infringed party.
   
   Article 56 (b) provides that inn case it is difficult to determine the loss suffered by the infringed party or the profit earned by the infringer, the Court may, according to the actual scenario of the case, determine an amount of up to 500,000 Yuan as compensation for the damage.
   
   However, selling, without knowing, the products that infringe the rights of a registered trademark, and can prove that he has obtained the products legitimately and provide the source of the products, he shall not be liable for the damage.
   
   
7. Co-ownership. According to Article 4, natural persons, legal persons and other entities may jointly apply for registration of a trademark, jointly own and enforce the rights of the registered trademark.
   
   
8. Grounds for cancellation. A registered trademark can be cancelled by the Trademark Office's ex officio action, based on violation of absolute grounds for refusal (Article 10, 11 and 12). Any person may also request the TRAB to cancel such mark based on the said articles. A registered trademark can be cancelled if the registration is obtained in violation of Article 13 (protection of well-known), Article 15 (application filed by unauthorized agent), Article 16 (protection for geographical indication) and Article 31 (protection of earlier rights). Trademark proprietors or interested parties may request the TRAB to cancel the registration based on Article 13, 15 and 31 within five years from the date of registration. If a registration is obtained in bad faith, the owner of the well-known trademark shall not be bound by the five-year limit.
   
   
9. The power of AIC (Administration for Industry and Commerce) strengthened. AIC officials now are empowered to seal or detain articles that are suspected to have infringed the rights of registered trademarks (Article 55).
   
   The implementing regulations of the law are now being drafted and will become effective at the same time.