In an attempt to further improve the trademark system and address the existing problems regarding trademark filings and registration, the China National Intellectual Property Administration (CNIPA) has taken steps to amend the current Trademark Act. On January 13, 2023, it announced the contents of the Draft Amendment to the Trademark Act, to widely solicit opinions from all sectors of the society before February 27, 2023.
This article will summarize the key points of the proposed revisions, so that readers can quickly comprehend the direction of the law amendment.
I. Measures taken to curb filings of others’ trademarks in bad faith
In parallel to the significant increase of the number of trademark filings in China, the issue of bad-faith preemptive filings has become more serious than ever before. Therefore, the competent authority has taken measures from the perspective of law and regulations to combat the unhealthy tendencies. For instance, in Article 22 of the Draft Amendment, five types of prohibited bad-faith acts are enumerated. In addition, Article 67 of the Draft Amendment imposes administrative penalties, including monetary penalties, on applicants or registrants who have applied for applications for trademark registration in bad faith, and new Article 83 provides that applicants or registrants who have applied for trademark registration in bad faith shall be liable for civil compensation to genuine trademark right owners.
II. Prohibition of duplicate registration of unused trademarks by trademark owners
A trademark owner is obliged to use the registered trademark; otherwise there is a risk of cancellation of the registered trademark after 3 years from registration of the trademark. In order to prevent unused trademarks from cancellation, some trademark owners are apt to consecutively apply for registration of the unused trademark once every three years, which can avoid the trademark owners’ obligation to use trademarks, but seriously consumes limited examination resources. In the meantime, such filings would disrupt a good order of trademark registration and management. Thus, Article 21 of the Draft Amendment expressly prohibits trademark owners from duplicate filings.
III. The strengthening of the obligation to use a registered trademark
At present, there are more than 42 million registered trademarks in force in China, of which a large number of trademarks are not put in actual use, and therefore cannot serve the function of trademarks as a source identifier. In order to lead trademark owners to actually use their registered trademarks and clean up zombie trademarks in a timely manner, a new article 61 is added to the Draft Amendment, stipulating that trademark owners need to explain to the competent authority, once every five years calculating from the date of registration of a trademark, the status quo of use of the trademarks on the approved goods or legitimate reasons for not using it. Not complying with this regulation will result in a waiver of right, and, in turn, cancellation of the registration of the trademark by the competent authority
IV. Inclusion of use of a trademark on the Internet as legitimate use of the trademark
The current Trademark Act does not regulate whether the use of a trademark on the Internet serves as “use” referred to in the Trademark Act. As the Internet has already become a popular place for buying and selling products and services, Article 59.2 of the Draft Amendment expressly stipulates that use of a trademark on the Internet also constitutes legitimate use of the trademark.
V. Enterprise Names and Social Organization Names are specified as Prior Rights or Interests
The first paragraph of Article 32 of the current Trademark Act stipulates that a trademark application can be filed only if it does not encroach upon existing prior rights of others. According to the Guidelines on Trademark Examination and Review that came into effect on January 1, 2022, the so-called prior rights include but are not limited to trade name rights, copyrights, name rights, design patent rights, portrait rights, and geographical indications. Apart from protecting the prior rights as specified above, prior interests are included in the Draft Amendment as another protection object. In addition, according to paragraph 2 of Article 23 of the Draft Amendment, prior rights or interests are accorded to the names of enterprises, (including abbreviations, acronyms, and group names) that have a certain degree of reputation, and social organization names.
VI. An overhaul of the opposition system
With a view to improving the efficiency of examination of trademark filings and disputes, the Draft Amendment shortens the opposition period from three months to two months. (Article 36 of the Draft Amendment) In addition, if the trademark applicant is not satisfied with a Decision rendered by the competent authority refusing the registration of an opposed mark, according to the current Trademark act, the applicant needs to file an appeal with the Trademark Review and Adjudication Board for review. The Draft Amendment simplifies the procedure of administrative remedies. According to Article 39.3 of the Draft Amendment, in lieu of filing an appeal to the Trademark Review and Adjudication Board, a petition for litigation can be filed directly with People’s Court.