CHINA: NEW LEGISLATION RELATED TO TRADE MARKS CAME INTO EFFECT ON MAY 1st, 2014

 

What are the benefits? Is the progress made satisfactory?


              A/ The benefits

 

  • Introduction of new registrable signs:
    • Protection extends to audio trade marks.

 

  • Procedural changes:
    • Multi-class registration applications: In the past, the applicant was required to register his trade mark by class of good and/or service. Applicants may now register a trade mark in multiple classes.

 

  • Early renewals: Renewal requests may now be filed during the year that precedes the date of the trade mark's expiry. In the past, a renewal could only be filed six months before the date of expiry.

 

The six month grace period remains unchanged. 

 

  • Introduction of examination deadlines


The new law imposes deadlines on the Trademark Review and Adjudication Board (or "TRAB") to render their decision in the framework of various procedures, e.g.

 

  • Trade mark registration procedure: 9 months
  • Appeal proceedings against the refusal of a trade mark: 9 months, with a potential 3-month extension
  • Opposition proceedings: 12 months from the date of expiry of the publication period for the trade mark, with a potential 6-month extension
  • Appeal proceedings against opposition decisions: 12 months, with a potential 6-month extension. Annulment proceedings based on the validity of a trade mark: 9 months, with a potential 3-month extension
  • Annulment proceedings based on the existence of prior rights: 12 months, with a potential 6-month extension 
  • Revocation proceedings for failure to use a trade mark: 9 months, with a potential 3-month extension
  • Appeal proceedings against annulment decisions: 9 months, with a potential 3-month extension

 

  • Simplification of the opposition proceedings and changes in appeal proceedings against opposition decisions
    • There are two types of proceedings related to oppositions against the registration of a trade mark: Opposition that is based on relative grounds (prior rights of third parties - for example, registered trade mark, renowned trademark or other pre-existing rights - geographic indications) and that is reserved for proprietors of these rights or any other interested party. Opposition that is based on absolute grounds (including the absence of distinctive character), which remains available to any third party. 
      In the past, anyone could oppose the registration of a trade mark regardless of the grounds. 
      These provisions intend to reduce the number of oppositions filed in bad faith in order to considerably delay the registration of a legitimate trade mark.

 

  • TRAB can now stay the proceeding to appeal an opposition (as well as invalidity proceedings) until the end of the proceeding initiated before the courts or other authorities against claimed prior rights.

 

  • Conduct
    • Good faith: introduced as a general principle in the new law (Article 7). The application of this principle can be found in a number of articles. 
      • A trade mark cannot be registered to designate goods and/or services that are identical and/or similar to those of another trade mark if the latter has been exploited and if the applicant is aware thereof because of the existence of contractual relations, transactions or any other relationship with the proprietor/user of the trade mark (Article 15). 
      • Trade mark attorneys may not act as representatives of a trade mark filed in bad faith or accept a mission if they know or should know that their client is infringing third party trade mark rights (Article 19).
    • Operators and producers are not authorised to use the term "renowned trade mark" on goods or packaging, in publicity, at exhibitions, or in any other commercial activity. 

 

  • The law on unfair competition will now apply in the event a registered or renowned trade mark belonging to a third party is used as a company name, thereby creating a risk of confusion among the general public.
  • The previous law did not govern conflicts between trade marks and the subsequent names of companies, except in the case of renowned trade marks (their proprietors were entitled to claim the annulment of the company name, which could mislead the general public). In practice, many trade marks with a certain reputation were registered as company names before becoming renowned. The new law extends the registration ban related to company names to prior trade marks registered by third parties.


             B/ Disadvantages and uncertainties


 Changes in the opposition proceeding

  • In the event of an opposition decision in favour of the applicant, said decision is final and the registration of the disputed trade mark is approved immediately. The adverse claimant may no longer file an appeal of the unfavourable decision before the TRAB. 
    He must now initiate a distinct action for invalidity before the TRAB, which action is more expensive. During the proceeding, the trade mark registration will remain valid.

 

  • Inversely, in the event of an opposition decision that is favourable to the adverse claimant, the applicant is still entitled to file an appeal of the unfavourable decision before the TRAB, then initiate an appeal before the courts if the decision rendered by the TRAB is once again unfavourable. 
    These provisions are unfavourable to adverse claimants who must wait for the outcome of the annulment action to be able to ban the use of the subsequent trade mark in dispute, and they may unfortunately encourage bad faith registration filings.

 

  • Protection of prior use


The prior use of a third party's registered trade mark creates rights in favour of the user.


The user of a trade mark prior to its registration by a third party to designate identical and/or similar goods may continue to use it despite this third party's rights if he is able to prove the anteriority of said use and the certain renown of the trade mark he is using.


However, the proprietor of the trade mark registered subsequently may require the user to add a specific sign to the de facto trade mark to differentiate his goods.

 

  • Conduct
  • Article 15 prevents registration of a trade mark to designate goods and/or services that are identical and/or similar to those of another trade mark if the latter has been exploited. However, it is not clear whether the prior use requirement relates to use in continental China only. 
    We hope that this use will not refer to continental China only, but that it will be taken into account regardless of the country in which this use occurs. Very often, the usurpation of a renowned trade mark that belongs to a third party results from the recognition of this trade mark due to the use thereof outside of China. 
    Furthermore, this article makes no reference to the usurpation of a renowned trade mark belonging to a third party for goods and/or services that are not similar, which is the most frequent case of usurpation.

 

  • The introduction of the general good faith principle could be limited. 
    Under the previous law, it was almost impossible for the proprietor of a registered trade mark not recognised as a renowned trade mark to prevent the registration and use of an identical trade mark for goods and/or services that were not similar. 
    The introduction of the good faith principle raises great hopes. However, Articles 33, 44 and 45, which list the terms of the new law that can be claimed in opposition and annulment proceedings, do not include Article 7, which introduces this principle. If good faith cannot be claimed in the case of opposition or annulment, the benefits of this principle will therefore be limited. 
    These uncertainties should encourage trade mark proprietors who plan on using them in China to file applications in the country as soon as possible. 
    LAVOIX remains at your disposal in this regard and for any other information on the new provisions that apply to trade marks in China.

 

Contact: Cyrille Mazeline  

 

Publication date : May 2014

Back to list
Sign Newsletters