Draft of Trademark Law Amendant for Public Comment

The Legislative Affairs Office of the State Council released the Draft of the Trademark Law Amendant for Public Comment ("Draft for Comment") on September 2, 2011. When asked why the Trademark Law needs to be amended and what articles will be revised, experts shared their opinions with People's Daily Overseas Edition.

Development requires amending

The Trademark Law of China was promulgated in 1983 and was revised twice in 1993 and 2001 respectively. Lin Shunde, Director of the Intellectual Property Center in China Academy of Social Sciences (CASS), said that the amendment of IP laws is greatly attributed to the synchronous development of IP and scientific and technological development, for example, developed countries revise intellectual property laws every year, but China revises IP laws once every several years. To strengthen IPR protection, IP laws have to be amended, he added.

As Li pointed out, China revised the Trademark Law in 1993 so as to restore its contracting party status in the General Agreement on Tariffs and Trade (GATT). With its entry into the World Trade Organization, China modified the Trademark Law in 2001 in accordance with TRIPS to keep its promises to protect intellectual property. However, with the fast-growing national economy, some trademark provisions have been "out of date". For example, the current trademark law provides that a registered mark must be composed of a composition of colors instead of a single color. Accordingly, the Draft for Comment expands the scope of registration, covering single color and even sound.

In general, the Draft for Comment improves trademark protection and strengthens the fiduciary duty on trademark registration and trademark law enforcement. Specifically, it prevents right holders from abusing relief measures and clarifies the "Passive Identification" principle for well-known trademarks. However, deficiencies do exist, for example, it does not solve the confusion of cancellation procedure and invalidation procedure, said Professor Li Chen from Renmin University of China Law School.

Expand the scope of registration

The Draft for Comment expands the scope of registration, adds E-registration and allows registration of a single mark for multiple classifications.

According to Li Chen, the Draft for Comment also revises the objection procedure. Under the current trademark law, everyone is allowed to raise objections. As a result, malicious objection frequently take place. The Draft for Comment thus limits the objection subjects to "prior rights holders or interested parties".

Option II of Article 34 of the Draft for Comment limits the scope of squatting and adds fiduciary duty. It provides that "if an applicant has a contract, business, or geography relationship with the right holder of an existent trademark, the registration can be identified as malicious squatting". Meanwhile, Option II also states that "for applications of trademark imitating the registered trademarks of different classifications which have significant impact, the registration shall be prohibited." However, the current trademark law only prohibits cross-registering well-known trademarks.

Crack down on trademark violations

Li Shunde said trademark law should meet the needs of economic development. It is therefore necessary to strengthen IPR protection, expand protection scope and simplify registration procedure so as to serve registrants.

Article 14 of the Draft for Comment – a revision of well-known trademark identification – aroused wide concern of experts. It clarifies the "Passive Identification" of well-known trademarks, which is in line with the international conventions, said Li Shunde.

As for the foreign challenge that crackdown on trademark infringement is not enough, the Draft for Comment makes adjustments. Li Shunde pointed out that Article 64 increases infringement penalties, especially imposing heavier penalties to offenders that commit more than twice infringements in five years. Article 67 also increases the statutory compensation maximum from the existing "no more than 0.5 million yuan" to "no more than 1 million yuan."