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China: the year of the trade mark

Close-up of bamboo Print publication

01/06/2014

ITMA North members were joined by Tingxi Huo of Chinese IP firm Chofn on 3 March 2014. 

Tignxi began with a light hearted example of the Chinese trade mark registry’s approach to deciding ownership of a trade mark application if two identical trade marks are filed on the same day. If neither party can show prior use and negotiations collapse, the registry will resort to a bamboo cup with 10 numbered bamboo sticks. The highest number wins! Despite the obscurity of this decision making process, it was clear following this talk that China is taking a more serious approach to IP rights, starting with a revision of its trade mark law.

China’s new PRC Trademark Law comes into force on 1 May 2014. Tingxi highlighted the following key changes:

  • Statutory fines for trade mark infringement will increase from 3 to 5 times the turnover or a maximum of RMB 250,000 (previously RMB 100,000) where the infringement has resulted in a turnover of less than RMB 50,000. Repeat infringers will also face increased fines.
  • Claimants will be able to seek a wider range of damages recovery including not only actual loss or an account of profits but also a royalty fee and an increased fine for bad faith use. Where the turnover is uncertain, damages will increase from RMB 500,000 to a maximum of RMB 3 million.
  • Presently, anyone can oppose a trade mark application in China on any grounds. After 1 May, only relevant parties (i.e. prior rights holders) will be able to oppose on relative grounds. However, there will be no limitation for opposition based on absolute grounds.
  • Applicants for national Chinese trade mark filings will be able to designate multiple classes.

Tingxi also provided the audience with some top tips for registration and use of trade marks in China:

  • According to Tingxi, most Chinese Courts and enforcement officers do not recognise International registrations issued in English. If applying for an International trade mark in China, Tingxi therefore suggests applying for a translation certificate
  • To prevent an infringing Chinese version of an English trade mark, apply for the Chinese translation and transliteration.
  • It is common in China for well-known brands to be abbreviated by Chinese speakers. Tingxi advises registering the abbreviated “nickname” even if it is not considered a “desirable” name.
  • Production of a product in China bearing the ® symbol (whether or not it is sold in China) is a finable offence if the trade mark is not registered in China.
  • Translate all labelling and catalogues into Chinese. Failure to do so may result in a fine of up to 30 per cent of turnover.

Tingxi concluded the talk by briefly summarising the Chinese enforcement authorities. As well as the police, customs and court, the Chinese Administration for Industry and Commerce presents a “very strong governmental organ”. The AIC employs 500,000 people and is empowered to issue orders to cease infringement, destroy good, issue state fines and refer cases for criminal prosecution. While a claimant cannot recover damages via the AIC, proceedings are often resolved within just one month. As an example of the AIC’s popularity, more than 120,000 trade mark cases were referred to the AIC in 2012, compared to just 20,000 trade mark cases in the courts.