Two years of trade mark reform

China's revised Trade Mark Law has been in effect for almost two years. To assess the results, it is necessary to first look at the main revisions and then see what effect that they have had.

On August 30 2013, the NPC Standing Committee announced approval of the third Amendment to Trade Mark Law of the People's Republic of China, and the new law officially came into effect on May 1 2014. The main changes in the revised Trade Mark Law can be put into five categories.

To comply with international trade mark systems, the revised Trade Mark Law introduced applicant-friendly mechanisms. For example, sound marks became registrable and multi-class filing became possible.

Moreover, the examiner's opinion procedure was resumed, and the Trade Mark Office can now issue notice of an examiner's opinion to trade mark applicants during examination, requiring applicants to explain or amend their trade mark applications.

Examination terms are set forth for several examination procedures, such as application for registration (9 months), opposition (12 months), review of refusal (9 months), review of opposition (12 months), non-use cancellation (9 months), to ensure examination efficiency.

While oppositions based on absolute grounds can still be filed by anyone, oppositions based on relative grounds can now only be filed by prior right owners or interested parties.

In order to simplify and speed up opposition procedures, the revised Trade Mark Law stipulates that, if the Trade Mark Office believes that an opposition is not justified, the opposed trade mark shall be approved for registration, and the opponent, if they are unhappy with the decision, can apply for invalidation of the mark with the Trade Mark Review and Adjudication Board; whereas if the Trade Mark Office decides that the opposition is tenable and that the opposed mark should not be approved for registration, the trade mark applicant can apply for a review with the Trade Mark Review and Adjudication Board.

The principle of good faith is explicitly included into the revised Trade Mark Law, which prohibits use of the term "well-known mark" for promotional purposes.

Based on Article 15 of the old Trade Mark Law, the revised Trade Mark Law added a new paragraph prohibiting a party having a contractual or business relationship or another relationship with the owner of a mark from preempting the mark without the owner's authorisation.

In addition to the above provisions, clearer rules are given on the professional conduct of trade mark agencies.

The revised Trade Mark Law broadens the category of trade mark infringing acts by upgrading "knowingly providing convenience for acts infringing upon another person's exclusive right to use a registered trade mark, or helping others implement acts infringing upon such exclusive right to use a registered trade mark" from the Implementing Regulations to the Trade Mark Law. The revised Trade Mark Law also increased the punishment for trade mark infringement.

The revised law also contained several changes designed to speed up proceedings, especially registrations and oppositions. With the implementation of the revised Trade Mark Law, we have observed that trade mark applications are being processed much more quickly than before. For a straightforward application, the applicant can get a registration certificate in no more than 12 months, usually a nine-month examination period plus a three-month publication period. This is quite effective for a Trade Mark Office that receives more than 2 million filings in a year. It has brought lots of benefit for overseas companies who need to get a registration certificate to get their business started in China.

On the other side, in order to make sure the process runs effectively and in a timely manner, the CTMO has adjusted its examination processes. They have postponed the issuance of filing receipts until the examination of goods description and formality of the filing. With this change, the CTMO has saved itself quite a lot of time. If there are minor defects in the filing, which in the past could be fixed by an amendment request, the CTMO will now usually issue a non-acceptance notice to the applicant. This puts the pressure on the applicant and the examiners can also be exempt from the nine-month examination deadline. That's why, in many cases, the CTMO only gives the client one chance to amend a goods description that has been questioned. If the amended descriptions are not acceptable, a non-acceptance notice is very likely to be issued.

"For a straightforward application, the applicant can get a registration certificate in no more than 12 months"

These rigid changes have made filing a trade mark application slightly risky if the applicant's products are quite new and cannot be found in the Nice Classification Book. Therefore, at least for the coming year, the applicant needs to pay attention to this requirement and try to use as many Nice descriptions as possible.

For accepted applications, in order to complete the examination as soon as possible, the CTMO has recruited quite a number of new examiners to take care of the huge filing volume. These new examiners, who only have a couple of years of experience, tend to be conservative with their examinations. For likelihood of confusion issues, if it is a borderline case, examiners tend to issue a rejection notice as they do not want to risk allowing a confusingly similar mark to get registered. Because of the nine-month limitation, the examiners lack the time to give careful examination to an application if several similar prior rights are found.

For oppositions, because the evidence submission period is exempt from the examination time limit, the CTMO has about 18 months (12 months plus two three-month evidence submission periods). As the revised law came into effect in May 2014, the trade mark agencies have not received many opposition decisions so far. But we believe the CTMO has more time for examination of opposition cases than for new applications.

Maintaining a high examination processing speed and at the same time a relatively rational examination standard might not be an easy task for the CTMO, which deals with more than 2 million new filings each year. This situation might last for a couple of years, but we believe when the filing numbers start to stabilise or slightly decrease, the situation will change.

Almost two years after the revised law came into effect, we are happy to see that most of the changes achieved their intended goals. First of all, the examination period has been shortened considerably and is now much more predictable. All the cases have a clear timeline, which is very helpful for us when devising a strategy for the client's cases in different procedures.

Oppositions can no longer be filed by a party who does not have any interest in the opposed mark, which prevents the phenomenon where a party uses the opposition procedure to prolong another party's trade mark registration. Meanwhile, a trade mark will be registered right away if the opposition is not upheld, which will help applicants to obtain the registration early.

An application for renewal of a trade mark may be filed 12 months before the expiry date, which helps the registrants to get the certificate early before the expiration. In addition, bad faith is now an important factor to be considered in opposition or other kinds of procedures, which makes trade mark squatters hesitate before filing.

We can see that the revised Trade Mark Law tends to give stronger protection to the real trade mark owner and it will be more difficult to make money through trade mark squatting. Consequently, some requirements on the applicants are much stricter than before. For example, in an opposition case, compared to the previous requirements, the opponent now has to file an original power of attorney, the proof as the prior right owner or interested party and the preliminary proof of the prior right. Otherwise, the opposition may be rejected at the formality examination stage and there is no opportunity to amend. It is not uncommon that after the opponent receives the notice of non-acceptance, the three-month opposition period has passed and the opposed mark has matured for registration.

Another bright spot for the revised Trade Mark Law is that multi-class application is now available. If the application is rejected on partial goods or services, the applicant may choose to file a divisional application, so the approved part can be registered, while the rejected part will go into the review procedure. However, the official fee is not reduced and is still charged per class, the same as the single-class application. Furthermore, after the mark is registered, it cannot be divided, which may cause some inconvenience to the registrant.

Since the revised Trade Mark Law has been in effect for less than two years, we are still waiting to see more practical cases showing the effect of the changes. The improvements in practice need the participation of examiners, trade mark attorneys and applicants. More research and more practical trade mark cases are needed to make a full assessment.

Michelle Mei Tian
		Michelle Mei Tian is a partner and a trade mark attorney of Panawell & Partners. She received her LLB from China University of Political Science and Law in 1996, and qualified as a trade mark attorney in 1998. Tian started to work on IP at China Sinda Intellectual Property in 1996. From 1999, she worked with Beijing Sanyou Intellectual Property Agency as a partner, director of the Trade Mark Department and trade mark attorney. Tian joined Panawell & Partners in March 2015. Tian has extensive experience and significant expertise in trade mark counselling and search, registration, opposition, reexamination, cancellation, invalidation, trade mark licensing and assignment, well-known trade mark recognition, Madrid trade mark registration, trade name and unfair competition, trade mark litigation and enforcement actions before the Chinese government agencies or courts. She is a member of the China Trade Mark Association. Her working languages include Chinese and English.