ECTA. European Communities Trade Mark Association 27 th Annual Meeting in Killarney

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1 ECTA European Communities Trade Mark Association 27 th Annual Meeting in Killarney Trade mark Laws and Practice in China Danny Chen I. Trade mark Laws, Regulations and International Treaties Applicable in China The modern trade mark legislation of China began with the implementation of the Trade mark Law on March 1, 1983, which was later amended in 1993 and Under this Law, there are five important principles: 1) Protection upon registration It means that, if a trade mark owner wishes to protect its trade mark in China, he needs to have it registered in China first. As being different from the trade marks laws of many other countries, the protection of a registered trade mark shall begin from its registration date, not the filing date. Of course, this principle is not absolute, because well-known trade marks that are not registered in China can also be protected under the Paris Convention and the Chinese Trade mark Law, but in a passive manner. In the following part of this presentation, I will give you more detailed information about the protection of well-known trade marks in China. 2) Voluntary registration Even though the trade mark protection can only be obtained after registration, it is not obligatory for the trade mark owners to obtain registration, who are free to use a mark as long as it does not violate the stipulations of the Chinese Trade mark Law. To be specific, the use of an unregistered trade mark shall not infringe any other party s rights on their registered marks in respect of similar goods. Also, a trade mark is not allowed for use if they comprise a state name, a national flag, a national emblem, a foreign geographic name well known to the public, or a discriminative, exaggerating, misleading, unethical word or design. 3) Substantive examination As different from the trade mark laws of many European countries, the Chinese Trade

2 mark Law requires that substantial examinations shall be conducted to determine whether a trade mark shall be registered or not. The substantive examination shall be conducted both on absolute grounds and relative grounds. 4) Unified registration, separate administration In China, the Trade mark Office is the only governmental organ responsible for trade mark registration, while the trade mark administration is carried out by Administrations for Industry and Commerce at all levels in their respective areas, which appears to be very efficient. 5) Judicial Examination No matter whether in a trade mark infringement case or an administrative procedure during the course of trade mark registration, it is always possible to bring the case to a court for final judgment. In addition to the Trade mark Law, and also because of the insufficiency of the Trade mark Law which is too general, we also have many administrative regulations or measures, which help to give more detailed stipulations, for example, Implementing Regulations of the Trade mark Law Rules for Trade mark Review and Adjudication Standards for Trade mark Examination and Review Measures for the Registration and Administration of Collective Marks and Certification Marks Measures for the Implementation of Madrid International Registration of Marks Provisions for Recognition and Protection of Well-known Marks Regulations on Customs Protection of Intellectual Property Rights Regulations on the Protection of Olympic Signs Regulation on the Protection of World Expo Signs Regulations on the Administration of Special Signs Also, as the courts in China have accumulated profound experience in the past years judging trade mark related cases, judicial interpretations are issued on a regular basis to give guidance. In addition to national laws and regulations, the following international treaties to which China is a member state are also followed: Paris Convention Madrid Agreement Madrid Protocol

3 Nice Agreement TRIPs So even although the Chinese Trade mark Law has only 25 years history, they are not as thin and weak as you may assumed. II. Trade mark Authorities in China 1) The Trade mark Office is responsible for trade mark registration and other related procedures like trademark opposition and non-use cancellation. 2) Trade mark Reviews and Adjudication Board (TRAB) makes decisions on reviews of rejected trade marks, reviews of trade mark oppositions or cancellations, and on trade mark dispute (invalidation) cases. The decisions made the TRAB can be appealed to Beijing No. 1 Intermediate People s Court and further appealed to Beijing People s High Court. 3) Local courts usually at or above intermediate level are in charge of foreign related trade mark infringement litigation. 4) Administrations for Industry and Commerce Administrations at all levels are responsible for trade mark administration and have the power of taking raid actions in their respective areas against trade mark infringers. 5) Based on the Regulations on Customs Protection of Intellectual Property Rights, the General Customs Bureau is responsible for recording trade mark rights while the local customs are responsible for routine inspection. III. Registrable Trade marks in China According to the Chinese Trade mark Law, any visual sign capable of distinguishing the goods or services of one natural person, legal person or any other organization from those of others, including words, devices, letters, numerals, three-dimensional symbols, combinations of colors or any combination of the above elements may be applied for registration as a trade mark. But we do not accept single-color marks, sound marks, smell marks and motion marks at the time being. As for the elements that are allowed to be used as trade marks in China, I will not go over them one by one but only indicate several issues that should be aware of: 1) In China, a Latin word and its Chinese transliteration(s) are usually considered as dissimilar to each other. So the registration of an invented Latin word mark is not

4 sufficient to prevent others from using or even registering a Chinese mark with similar pronunciation. So trade mark owners are always suggested to register parallel Chinese marks. 2) A trade mark merely composed of one or two Latin letters in plain tying form is considered as devoid of distinctiveness. Try to file the mark in a stylized form. 3) A numeral mark, when used on such goods as machinery and electronic apparatus which are usually are categorized by letters and numerals, are apt to be considered as devoid of distinctiveness. 4) Avoid using country names and foreign geographic names in the trade mark. The country name of CHINA is strictly prohibited, while a foreign country name can be allowed if there is a consent from the government of that country. Usually a registration certificate for the same mark in that country will be considered as a governmental consent. So it is not difficult to prove, but you can only prove this during the review procedure, that is, after the trade mark is rejected. 5) Avoid using slogans unless they are highly distinctive. Likewise, the distinctiveness of a slogan mark can only be approved after the examination and in the review procedure. In addition to ordinary marks, collective marks and certification marks are also available for registration in China. IV. National Trade mark Application Procedure In order to verify the availability of a trade mark to be registered in China, it is possible to conduct pre-filing searches. But the pre-filing search is not obligatory in China. The trade mark searches in China are only conducted within the scopes of registered marks and filed marks that have passed the formality examination. Please take note that a standard trade mark search in China usually does not cover Chinese company names or domain names. It is not necessary or even possible to conduct a thorough search among Chinese company names. On one hand, the Chinese Trade mark Office does not take company names as prior rights during their trade mark examination; on the other hand, there is not a nationwide database of all Chinese company names for us to check. Domain name is not taken into account either. In order to get an accurate result of trade mark search, it is always suggested to indicate the specific goods or items that are most interested in. The requirements for filing Chinese trade mark applications are rather simple on one

5 hand but also troublesome at the same time. It is simple because there is no use requirement for filing; it is simple because foreign applicants are privileged and they do not need to submit an original Power of Attorney or their domestic registration proofs. But on the other hand, trade mark applicants are required to translate their names and addresses into Chinese; trade mark applications have to be filed on the per-mark-per-class basis, and there is a limit of 10 goods items in each application with surcharge for each additional item in excess of 10. After a trademark application is filed with the Trade mark Office, an official filing receipt will be issued in one or two months, on which the filing date and the filing number will be indicated. Examination will be first conducted on formality issues, and one of the most important parts of the formality examination is the examination on the goods / service indications. The Chinese Trade mark Office has very strict or even rigid sometime on the standardization (not specification) of the indications. Nice Classification is the only criteria that are stuck to. For goods or services that cannot be found therein, there is a high possibility that such goods or services will be required for amendment. There is one thing that needs to be pointed out: based on the Nice Classification, the Chinese Trademark Office has further developed a system of sub-class, with each international class divided into several sub-classes, and the sub-class is regarded as the criteria for judging similar goods. Under most circumstances, goods / services categorized into the same sub-class are considered as similar. One of the purposes of the formality examination is to categorize the goods / services into proper sub-classes, based on which further substantive examination can be conducted. The substantive examination is not carried out right after the formality examination. In stead, the filed applications shall wait for substantive examination in queue according to the filing sequence. And also because of this reason, it is hardly possible to expedite an application procedure in China. Unlike the trademark systems of European countries, our substantive examination covers both inherent registrability and relative availability of a trademark. If a trademark is inherently registrable but similar to prior mark in respect of similar goods, the Chinese Trademark Office shall issue a notification of refusal against the trademark either completely or partially. A request for review has to be filed with the Trademark Review and Adjudication Board within 15 days from receipt of the notification if the trademark applicant is not dissatisfied with the rejection. The review decision can be further appealed to the court, but there is only 10% chance to revise a review decision because the court will mainly focus on procedural issues in an administrative lawsuit. If a trademark is preliminarily approved for registration whether directly after examination or after review, the mark will be published in the official Trademark Gazette for three months, during which oppositions can be filed by any parties based on almost any grounds. In

6 other words, you don t have to base on a prior trademark right to initiate an opposition. Still it is the Trademark Office that will examine the opposition case, and the adjudication on an opposition can be reviewed by the Trademark Review and Adjudication Board and appealed to court. If a trademark is finally approved for registration, the protection thereto begins from the registration date, the next day after the three-month publication, and the validity period shall be 10 years from the registration date, which can be further renewed without limited, as in most countries. For your easy reference, there is a time frame chart on the screen so that you can have a clearer idea about how long a trademark procedure in China can take. V. International Registration Because of the time and cost concern, most European applicants prefer to adopt the Madrid system to seek trademark protection in China. And China becomes the most designated country, with 40% of international trademarks designating China for protection. There is no doubt that Madrid system is cost effective and time efficient especially when China is concerned, where applications have to be filed on the per-mark-per-class basis, to be limited with the numbers of goods items, and to take almost 3 years. Also for the time concern, I will skip the common practice of international registration, with which I believe that most of you would be even more familiar than I am, but will mention some very special issues that are very peculiar in China, some prescribed by Measures for the Implementation of Madrid International Registration of Marks issued the Chinese Trademark Office and some concluded during our practice: 1) According to Article 25 of the Implementing Regulation of the Chinese Trademark Law, when applying for the assignment of a registered trademark, the trademark registrant shall assign all the identical or similar trademarks registered in respect of the same or similar goods. If the registrant fails to do so, the Trademark Office shall notify him to correct the situation within a time limit; if the correction is not made within the time limit, the application for the assignment of the registered trademark shall be deemed to have been abandoned, and the Trademark Office shall notify the applicant in writing. This prescription applies to international trademarks as well. If the assignor of an international trademark fails to assign all the identical or similar marks, the Chinese Trademark Office shall notify him to correct the situation within 30 days

7 from receipt of the notification; if the correction is not made within the time limit, the Chinese Trademark Office shall decide that the said assignment has no effect in China and declare the same to WIPO. 2) Where an international trademark owner requests for restriction of goods indications and the restriction does not accord with the classification requirement in China, the Chinese Trademark Office shall decide that the said restriction has not effects in China and declare the same to WIPO. 3) Applications for recording the license of an international registration shall be filed with the Chinese Trademark Office directly, not to WIPO. 4) Applications can be filed with the Chinese Trademark Office for obtaining certifications of registration of an international trademark. But on the other hand, it need be aware that there are also many disadvantages with an international registration, some of which could be fatal: 1) Based on domestic registrations or applications in Europe, many international trademark registrations adopt very general goods descriptions, for example machines in Class 7 and electrical apparatus in Class 9, while the actual goods interested by the trademark owner may only be agricultural machines in Class 7 and electrical regulating apparatus in Class 9. These international trademarks are more apt to encounter more prior marks because of the general description. 2) In order to meet the prescribed period of either 12 months or 18 months for examining an international trademark, the International Registration Division under the Chinese Trademark Office carries out expedite examinations on international trademarks. But because of this, the international trademarks are apt to encounter more obstacles caused by prior marks which are still pending for national examination and may be rejected for certain reasons. And also because of this time limit, the quality of examination on international trademark is averagely worse than on national applications. 3) The goods / services for international trademarks are translated into Chinese by the examiners according to their discretion. For words with multiple meaning or in high technical fields, it may be translated inaccurately. In such a case, unless assisted by Chinese attorneys in verifying the translation, owners of international trademarks would not know the exact scope of protection that has been obtained! It is of course too late to realize that there is a problem with the scope of protection only when the trademark owners are to enforce their rights.

8 4) As I mentioned earlier, trademarks are not allowed to be registered under certain circumstances, for example incorporating a foreign state name. In some cases like this, the foreign state name is separate from the major part of the mark and can be easily removed to avoid rejection. But in case of international registrations wherein the trademarks shall be in conformity with the one in the basic registration or applications, such change is not allowed and an rejection is inevitable. 5) Although international trademarks that have been approved for extension to China shall have the same legal effects as national registered marks, in practice, some local AIC in remote areas are not familiar with the certification of registration for international trademarks, and are reluctant to take raid actions. Therefore, the attorney s advice is to Use national registration in stead of or in addition to International registration if The mark is particularly for use in Chinese market The mark is used on some uncommon goods The mark need be altered to increase the chance of registration in China The mark may be assigned to parties from Non-Madrid countries VI. Well-known trade mark The system of well-known trade mark recognition in China is very unique and efficient. The prohibitive rights of a well-known trade mark include: Stop the registration and use of trade marks in respect of identical and/or similar goods/service, if the well-known mark is not registered in China; Stop the registration and use of trade marks in respect of non-identical and/or dissimilar goods/services, if the well-known mark is registered in China; Stop the use of the mark in a company name by others Stop the use of the mark in a domain name by others But what mark can be recognized as a well-known mark? Article 2 of Provisions of Recognition and Protection of Well-known Trade marks prescribes that a well-known mark shall be A mark that is widely known by the relevant public and enjoys high reputation among the public in China. It is important to take note of the meaning of in China, which means being well known in other countries cannot be necessarily considered as being well known in China. But on the other hand, the mark does not have to be well known at every corner across China.

9 And how can we judge that a mark is well known? In China, the factors considered in recognition of well-known marks include: the degree of knowledge of the relevant public the duration of continuous use of the mark the geographical coverage of use of the mark the duration, geographical coverage and extensiveness of any publicity of the mark (including manners of advertising, types of media and expenditures of advertising, etc.) But once again, these factors shall be pertaining to China. Regarding the detailed approaches, it is possible to apply for recognition of a well-known trade mark in an opposition proceeding. The Chinese Trade mark Office is entitled to recognize a well-known mark during an opposition procedure and to make adjudication, but it usually takes more than three years. During a review of an opposition case or a dispute (litigation) procedure, it is also possible to request the Trade mark Review and Adjudication Board to recognize a well-known mark and to make decision on the case accordingly. But both proceedings take more than 4 years. Optionally, the AICs at or above city level has the power to recognize a well-known mark during a raid action, based on which AIC can stop the infringement and impose penalty to the infringer. Such an action is very quick and takes 6 months to 1 year only. And the Court may also recognized a well-known mark during a trade mark infringement litigation and based on such recognition, prohibit the use of the infringing mark, and decide civil remedy. The procedure takes one to one and half years, not bad. It can be noted that the recognition has to be requested during a particular case. On the other hand, however, the recognition cannot stay life time. It is only valid for three years and re-recognition will be necessary after that. Moreover, China is not a case-law country, so the recognition of a well-known trade mark in one case is not for sure effective in other cases. If the counter party in another case raises objection against the well-known status of the mark, the competent authority examining the case shall reconsider the recognition. Now it comes to the end of my presentation. It is my sincere hope that, from what I

10 have introduced, you will have a greater confidence in the trade mark protection in China. All that needs to be done is to find an appropriate approach to seek protection in China and to find appropriate people to help you with that. Thank you! Danny Chen, 2008

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