Chinese Trademark Law: The new Law of August 30, 2013 sheds new light on the Chinese system

It is very often said that the Chinese legislation on trademarks reflects a protectionist approach (including against infringers) and is static, illegible and unfair.

This article tries to take an objective view on the Chinese system.

First, the system is based on the active and effective role of the Trademark Office. Should we complain about this? There is no absolute answer to this question, and the system is not necessarily bad.

As should be recalled, trademark law in China allows the Administration to set off priority claims against any later filings it would consider as confusing. The owners of prior trademarks are thus protected and do not necessarily need to respond (and hence to incur costs).

By way of comparison, if someone files the well-known trademark Cartier for jewels, whether in France or with the OHIM, the Office will collect the filing taxes and register the trademark unless Cartier, if it is aware of such filing (generally through a watch implemented at its own expense), files an opposition (which implies paying official taxes).

It is therefore quite clear that in a similar situation, the owner of a legitimate trademark will pay a single filing tax in china, whereas in a member country of the European Union the same owner will be requested to pay a filing tax, plus monitoring costs and an opposition tax. This shows that, in a way, the European Offices have « outsourced » the register monitoring activity, while collecting twice as many taxes.

What are the limits of the Chinese system? (Alas, no system is perfect)

First, citations of prior trademarks are generally limited to what is identical or nearly identical. Second, it would seem that they are sometimes more in favor of the Chinese owners, than the foreign owners.

The Chinese are not blind, as one would have us believe, and their system is gradually changing. The adjustments they make are generally (probably) well thought, considering the number of trademarks that are filed every year in this country, which is the leading economy in the world.

The new law on trademarks of August 30, 2013 (to be enforced on May 1, 2014) makes part of this evolution, which must be welcomed!

What are the major changes, having regards to the problems we have had over the last few years?

  • The procedures that involve the administration (i.e. well-known trademarks; examination lead-times; impeachment procedures; etc.) have been refocused, and this should ensure unified treatment for all applicants, whether they are Chinese or not.
  • The system seeks to prevent tactical actions (and particularly those that are geared towards artificially blocking the registration process for a given trademark, which action has substantial consequences, considering that infringement proceedings can only be initiated by the owner of a registered trademark).
  • The consumer is now more protected against trademarks self-designated as « well-known » (which would mean that the problem is not uncommon…).
  • The system is being modernized (more efficient e-filing process; multiple-class filing to reduce costs; etc.).

Overall, it is obvious that the Chinese system is changing and that it is very important for us to monitor this evolution, not only to ensure full compliance with the new rules, but also (and above all) to gain a clear understanding of the overarching spirit.

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