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China strengthens its trade mark law for brand owners

10/07/2019

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On 23 April 23, China published an amended Trade Mark Law which will come into effect on 1 November 2019. The revisions introduce intent to use requirements and increase the level of punitive damage and statutory damage to crack down on bad faith filings and strengthen trade mark protection.

On 23 April 2019, China published an amended Trade Mark Law which will come into effect on 1 November 2019. It is the fourth revision of the law and the last revision was in 2013. The revisions introduce intent to use requirements and increase the level of punitive damage and statutory damage to crack down on bad faith filings and strengthen trade mark protection.

1. Intent to use requirement

Background

In 2018, there were over seven million trade mark applications and over five million trade mark registrations in China. Such a huge amount shows the increase of trade mark awareness of Chinese business but unfortunately, at the same time, many of these trade marks are filed with bad faith. When we monitor and file oppositions for our clients, we find so many trade mark applications similar to famous brands and trying to take advantage of their high popularity. Many applicants filed the same registrations for one logo at the same time as a big event of the brand. From media reports, we also found news such as one company filing over 5,000 trade marks in a day when the company was only established one month ago, and another company filing over 10,000 trade marks in two days.

It is always a huge burden for large brand owners to monitor and oppose these similar trade mark filings. But there are problems even for small brands. When brand owners decide to enter into the Chinese market, often, they would find that their brands have already been registered as trade marks in China. Considering the difficulties in invalidating trade marks and the timeline for cancellation based on non-use, many brand owners decide reluctantly to buy trade marks from the trade mark squatters. Therefore, registering and selling trade marks has been developed as a business model by trade mark squatters.

Article 4 of the new law

In response to the above problems, Article 4 of the new Trade Mark Law states that “any application for trade mark registration that is malicious and is not filed for the purpose of use shall be rejected”, aiming to crack down the bad faith filings.

But, it raises questions on how this article might be enforced. Does it mean that China now requires trade mark applicants to provide evidence to prove that the trade mark is filed for the purpose of use?

The articles amended with reference to Article 4 were Articles 19, 33, 44 and 68. Article 19 states that trade mark agents should not accept instructions to file trade marks without intent to use and Article 68 provides penalties for trade mark agents who violate Article 4. Article 33 and 44 provide that oppositions and invalidation actions can be filed based on Article 4. Therefore, the new law does not require evidence to prove the intent of use during trade mark applications. Accordingly, it seems that it is quite unlikely that the CNIPA (China National Intellectual Property Administration) will directly reject trade mark applications based on Article 4 during the trade mark examination procedure.

However, the CNIPA published the Provisions on Standardizing Trade mark Application Behaviour (draft for comments) in February 2019 (“Provisions”). The Provisions identified trade marks filed without intent to use as one type of “abnormal applications”. The examiners may request trade mark applicants to provide evidence or explanations for abnormal applications. After the Trade Mark Law revision, the CNIPA announced that it will revise and promulgate the Provisions as soon as possible to further implement the revisions of the new Trade Mark Law. We expect the promulgation of the Provisions will provide a clearer answer to the above question.

2. Trade mark protection

Punitive damages

The last revision of the Trade Mark Law in 2013 introduced for the first time punitive damages for malicious trade mark infringement with serious circumstances and set the punitive damage as 1 to 3 times of the amount, determined as:

(1) the loss to the trade mark owner;

(2) the profit gained by the infringer; or

(3) an amount reasonably determined with reference to the royalties.

Article 63 of the new law raises the level of punitive damage to 1 to 5 times the determined amount.

However, in practice, due to the difficulty of collecting evidence, it is very difficult or sometime even not possible for the trade mark owner to provide enough evidence so that the amount of damage can be calculated through the above three ways. Therefore, there are not so many cases where the courts will deliver punitive damages since there is no basic amount to multiply as 1 to 3 times or 5 times. (For a case where this was successful in 2017 see our blog, New Balance's trade mark case in China – about more than just the damages.)

Statutory damages

Consequently, the most commonly used way to decide the amount of damage is statutory damages. The 2013 revision increased the maximum amount of statutory damage from RMB 500,000 to RMB 3 million. We have already seen an increasing amount of awards of statutory damages delivered by the Chinese courts in trade mark infringement cases in recent years. Therefore, we think it will be an effective way to further strengthen the trade mark protection that the new law raises the statutory damage from up to RMB 3 million to 5 million.

Additional orders

In addition, Article 63 stipulates that the courts may, at the trade mark owner's request, order the destruction of the infringing goods, materials and tools for making the infringing goods without compensation, and under special circumstances, such materials and tools can be prohibited from entering commercial channels.

The same article adds in particular that “infringing goods shall not be allowed to enter commercial channels after merely removing counterfeit mark”. This is in response to a long-time concern raised by trade mark owners regarding the reappearing of infringing goods in the market, as it is easy for infringers to re-affix the counterfeit mark on the infringing goods.

Comment

The above amendments are aimed at reducing bad faith filings, increasing the costs to infringers, raising the deterrence of future infringement, and improving the trade mark protection environment. Of course, the new law is not going to fix every problem. We will see how effective these revisions will be after implementation.

Furthermore, according to a recent announcement, CNIPA has already started preparation of a new round of Trade Mark Law revision. We expect a more favourable climate for brand owners and encourage brand owners to be more active in protecting their trade marks in China.

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Should you wish to obtain further information or discuss any issues regarding this blog, please contact the authors:

Xu Lin, Partner

xu.lin@fieldfisher.com

Alex Shen, Senior Associate

alex.shen@fieldfisher.com

 

 

Chinese

《商标法》第四次修改对商标保护的影响

2019年4月23日,新修订的《中华人民共和国商标法》(以下称:“新《商标法》”)正式发布,并将于2019年11月1日正式实施。本次修订为《商标法》的第四次修订,上一次修订是在2013年。此次新《商标法》的修订旨在打击恶意商标申请并加强商标保护,其主要的修订内容为增加了使用为目的申请商标的要求以及提高了商标侵权的赔偿标准。

我们将在本文中结合我们的业务实践,从上述两方面分析新《商标法》的修订及其对中国商标申请和保护的影响。

  • 关于以使用为目的申请商标的规定

 

背景

据相关报道,2018年中国大陆地区商标注册申请量达到七百多万件。商标注册量达到五百余万件。如此之多的商标申请量和注册量在一定程度上反映出中国业界商标意识的增强,然而其中也不乏大量恶意申请商标的案例。我们在为客户进行商标监控以及提交商标异议的过程中,发现许多不同形式的近似商标申请试图利用或攀附著名品牌的知名度。在某一品牌发生重大事件的同一时间会有大量的与该品牌标识近似甚至相同的商标申请。从媒体上也可以看到类似报道,比如:某家成立一个多月的公司一天内申请5000多件商标;某家公司两天之内申请1万多件商标等等。

对于大品牌而言,对这些恶意商标申请进行监控并提交异议无疑是一个巨大的负担。但即使是对于中国境外的小品牌而言也面临一些棘手的商标问题。在大多数情况下,当这些小品牌决定进入中国市场时,他们会发现这些品牌已经在中国被抢注商标。考虑到对这些被抢注商标申请无效的难度,以及基于三年不使用而申请撤销此类商标所需的时间周期,许多品牌所有人会选择从商标抢注人手里购买被抢注的商标。因此,抢注商标而后待价而沽已经发展成为了商标“黄牛”们用以牟利的一种商业套路。

新《商标法》第四条的规定

有鉴于此,《商标法》新增的第四条规定“不以使用为目的的恶意商标注册申请,应当予以驳回”,旨在打击恶意商标申请。

问题是实践中如何实施这一规定?该规定是否意味着中国将会要求商标申请人在商标申请时举证证明其申请商标的目的是为了使用?

涉及《商标法》第4条修改内容的还有《商标法》第19、33、44和68条。第19条规定商标代理机构不得接受恶意商标申请人的委托,而第68条则规定了对违反第4条、第19条规定的商标代理机构给予的处罚;第33条和第44条则针对违反第4条规定的商标申请提供了可以对其申请商标异议和商标无效的两种救济途径。由此可见,新《商标法》目前并未要求在商标申请过程中举证证明“以使用为目的”。据此,我们认为中国国家知识产权局不太可能在商标申请的审查阶段直接援引新《商标法》第4条驳回商标申请,而有可能在商标异议和无效阶段,援引该条款驳回恶意商标的注册申请或宣告恶意申请的商标无效。

然而中国国家知识产权局20192月发布了《关于规范商标申请注册行为的若干规定》(征求意见稿)(以下称:“《若干规定》”)。在《若干规定》的征求意见稿中将不以使用为目的的商标申请认定为“非正常申请”的一种。审查员可以要求申请人就其非正常申请行为提供证据或合理解释。在新《商标法》颁布后,中国国家知识产权局也宣布其将尽快修改并颁布上述《若干规定》,“使商标法的修改内容落到实处”。我们期待《若干规定》的发布将就上述问题提供一个明确的解答。

 

  • 关于商标保护的新规定

 

  1. 惩罚性赔偿

针对情节严重的恶意商标侵权行为,在2013年中国《商标法》的上一次修订中首次引入了惩罚性赔偿的制度,同时规定了13于下列任一金额(即:基础赔偿金)的惩罚性赔偿金:

(1)商标权人因侵权行为所受的损失

(2)商标侵权人因侵权行为所得的利益

(3)根据被侵权商标的授权使用费的倍数确定合理金额

新《商标法》第63条将惩罚性赔偿金的计算标准提高至上述基础赔偿金的15

然而,在司法实践中,囿于取证的难度,商标权人往往很难,有时甚至不可能提供足够的证据来通过上述三种方式计算得出基础赔偿金,这样也就没有了施以1至3或5倍惩罚性赔偿的基础,因此实践中法官判决侵权人承担惩罚性赔偿的案例并不多。

法定赔偿

正是由于上述原因,在实践中最为常见的用以判定赔偿金额的方法是法定赔偿。2013年《商标法》的修订中,将法定赔偿最高额由人民币50万元提高至人民币300万元。近年来,我们已经看到在中国法院判决的商标侵权案件中,法院判令侵权人承担的赔偿金额有所增加。因此,我们认为新《商标法》将法定赔偿最高额由人民币300万元提高至500万元将进一步有效地加强商标保护力度。

其他措施

除此之外,新《商标法》第63条规定,法院可以应权利人请求,责令销毁侵权产品、用以制造侵权产品的材料和工具并且对此不予补偿。在特殊情况下,此类材料和工具可以被禁止再次进入商业渠道。

该条款还特别规定“假冒注册商标的商品不得在仅去除假冒注册商标后进入商业渠道。”这一规定回应了商标权人长期以来的担忧和质疑,即被查获的侵权产品很可能会再次进入市场,因为侵权人可以很容易地将伪造的商标再次添附在侵权产品上。

 

评论

中国《商标法》的上述修订旨在减少在中国境内的商标恶意申请,增加商标侵权成本,震慑潜在的商标侵权行为,并改善商标保护的环境。当然,新《商标法》不可能一劳永逸地解决所有问题。根据中国国家知识产权局最近发布的公告,该局已经开始新一轮《商标法》的修订工作。我们预计未来的营商环境对于商标权人而言将更为友好,鼓励商标权人更积极地在中国保护他们的商标权。

 

如果您希望就上述主题获得进一步的信息或者与我们探讨关于本文章的任何问题,请通过下列方式联系作者:

 

林旭  合伙人/律师

Xu.lin@fieldfisher.com

 

沈敏杰 高级律师

Alex.Shen@fieldfisher.com

 

 

 

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