Updates and Changes in Chinese Trademark and Copyright Law

The PRC recently passed legislation affecting intellectual property rights which will take effect on May 1, 2014.  The following is a synopsis of some of the most salient points.

Multi-Class Applications

Applicants may now file for trademark registration in several classes in a single application.  Previously, only one class was permitted per application.  This change is expected to streamline the trademark process and cut down on the expense of filing multiple applications.

E-Filing

While electronic filing has been permitted, it is now officially recognized.

Sound Marks

The definition of a sign that can be registered for trademark protection has expanded to include sounds.

Examination Process:

The following are new statutory timelines imposed on the Trademark Office or Trademark Review and Adjudication Board:

Procedure Time Limit Extension Available Under Special Circumstances
Initial Trademark Examination 9 months None
Review of Refusal Decision 9 months 3 months
Opposition 12 months 6 months
Review of Opposition Decision 12 months 6 months
Reexamination After Mark Found Invalid For Violating Law 9 months 3 months
Review of Decision In Above Circumstances 9 months 3 months
Request for Invalidating Mark Where Alleged Infringement 12 months 6 months

Reexamination

If, during the period of reexamination, the determination of the status of the application depends upon the outcome of another case being tried to the People’s Court, or being handled by administrations, the reexamination may be suspended by the Trademark Review and Adjudication Board (TRAB).  Once the pending matter is resolved, the reexamination procedure may resume.

Invalidations:

Instead of cancelling trademarks that are acquired by fraud or unfair means, or where a trademark violates trademark law, the Trademark Office shall now declare it invalid.  A request to invalidate a trademark can also be made by individuals through the TRAB.

Oppositions:

For oppositions where infringement is alleged, the person filing an opposition must now be either an interested party or prior obligee.  Any person may file an opposition where it is alleged that a mark violates trademark law.  If an opposition fails, the opposer can no longer file for review and must instead go through invalidation proceedings with the TRAB.  If, after opposition, the mark is denied, the applicant may apply for reexamination with the TRAB.  If unsatisfied with the decision after reexamination, applicant may begin legal proceedings in the People’s Court.

Licensing and Assignment

Trademarks may still be licensed by contract, authorizing use by others.  However, if the license has not been filed with, approved, and recorded by the Trademark Office, the license cannot be asserted against bona fide third parties.  All marks that are similar and relate to the same goods shall be assigned at the same time to the same assignee.

Good Faith

New law specifies that applicants must follow the principles of honesty and credibility for registration and use of a trademark.  Trademark agents are also now held to the same standard.

Damages

Compensation for infringement is now determined relative to actual loss by the obligee due to the infringement.  If actual loss cannot be determined, losses are measured by a multiple of the theoretical cost of licensing the trademark.  Punitive damages of up to three times the loss are now expressly provided for in cases of malicious infringement.  Maximum statutory damages are now increased from ¥500,000 to ¥3,000,000.

Proof of Use Defense

If a trademark owner claims damages from infringement, a defendant can request the owner to produce proof of use of the registered trademark during the preceding three years.  If proof of use cannot be produced by claimant, no damages will be awarded.

Renewal

Renewals may now be filed within the preceding twelve months before the mark is due to expire.  The grace period for renewal remains six months. Changes in Chinese Copyright Law

Changes in Chinese Copyright Law

Chinese copyright law has traditionally not criminalized copyright infringement where there is no intent to gain a profit.  However, the law now provides that even where no illegal revenue is generated, or revenue generated is below ¥50,000, a fine of no more than ¥250,000 can be imposed by the Copyright Administrative Department (CAD), depending on the seriousness of the case.  In addition, the law now states that where infringement prejudices social common interests and generates illegal revenue above ¥50,000, the CAD may impose a fine of more than one time but less than five times the amount of the illegal revenue.