CHINA – breaches in the Great Wall of Chinese trademark law

Thus, the CNIPA takes into account the market developments as well as the emergence of new signs, in line with other offices around the world, and is considering adding  an “other signs” category to the list of signs that may constitute trademarks (article 4).

More importantly -with this being of particular interest to foreign applicants and intended to restore confidence in the Chinese system -, definition of “well-known trademark” may be extended.

Scope and strength of protection will be related to the nature of the trademark, its distinctive character and its reputation.

This text introduces an anti-dilution provision: use and registration of a trademark are prohibited if they dilute the distinctive character of a well-known trademark, tarnish its reputation on the market or damage the same with the general public (article 18). CNIPA’s interpretation of such notion of “general public” has yet to be defined and should be considered in connection with the concept of “relevant public“.

To determine whether a trademark is well-known, the reform proposal also introduces two new factors that are crucial to foreign applicants: the list of national and foreign applications and registrations of the concerned trademark, and its value (article 10).

Finally, “other interests”, such as company names or website names, would now be protected against infringement (article 23).

The reform proposal sets a list of bad faith behaviours, strengthening current provision on the principle of good faith (article 22).

CNIPA also provides for sanctions in the form of fines, seizures or even forced transfer of the disputed trademark to the rightful owner, once bad faith has been proven (article 67).

Nevertheless, as presented for now, such solution does not appear to be a sufficient and satisfactory alternative to one of the current strategy, i.e. defensive filings.

Indeed, what about protection against third-party filings that designate classes/subclasses for which the earlier well-known trademark lacks coverage or for which the earlier allegedly reputed trademark will not be recognized as such by the general/relevant public, under whichever standard tobe fixed?

The reform proposal introduces an obligation to use the trademark after a certain number of years and an intention to use the trademark at the time of filing (article 5).

Any new application would have to be use-based or an intent to use, somewhat like the US system.

In addition, the trademark owner would have to provide CNIPA with a statement of use every 5 years (article 61) from the registration date of the trademark.

Failure to do so may result in the trademark being considered as abandoned and therefore cancelled (unless there is a legitimate reason for non-use).

We have little information on the details of this new requirement. According to the ongoing reports, some would have preferred adoption of a system more inspired by European law, with possibility to request filing of proof of use in the course opposition proceedings for example, with the consequences that we know.

As things currently stand , evidence to be submitted would not be as heavy as in the case of revocation actions. However, if the  statement of use is not sufficiently supported, then CNIPA may ask the trademark owner for additional evidence. In anticipation of such obligation, it is therefore strongly advisable to develop a strategy for safeguarding proof of use.

While there’s no certainty as to which standards and requirements will have to be complied with, it would be wise to not wait to ensure that dated elements and pieces of evidence be collected and saved for each of the goods and services designated by the trademarks.

While CNIPA is inclined to broaden the protection of well-known trademarks, it is willing to limit the number of trademarks on the register to those that are actually used – pursuing to ban successive filings which, according to the CNIPA, constitute ab initio bad faith.

It will however be necessary to ensure that well-known trademarks are sufficiently protected under the new projected standards, so that their owners could safely give up defensive filings, which have until now been a major defensive tool.

• The same applicant may file only one identical trademark for identical goods or services (article 14);
• Any cancelled, revoked or invalidated trademark may not be the subject of a new application within a period of one year (article 21).

Nevertheless, the reform proposal provides some exceptions to this prohibition.