During the 13th National People’s Congress in late April 2019, the Standing Committee has decided in their 10th Meeting on new amendments to modify the current Trademark Law. There are 6 amendments on provisions in the Trademark Law, which will come into force on 1st November 2019. Specific implementation measures and supporting regulations will be issued as soon as possible by the National Intellectual Property Bureau.
The most arresting change is the emphasis on the inhibition and punishment of bad faith trademark registrations and stocking trademark registrations for profitable sales. Article 4.1 has been changed to favour the approval of the trademark whose legal owner is the actual business undertaker. Trademark applications filed not based on grounds of actual usage with bad faith will be rejected. Article 19.3 now offers a stricter control on trademark application agents who should submit trademark applications on behalf of clients after 1st Nov. 2019 under the condition that the clients’ intentions have been made aware of. It is very straightforward in its purpose of inhibiting intentionally stocking a large number of trademarks for profitable sales.
Photo by Leon Liu on Unsplash
Article 68.4 is a newly born rule regarding the punishment not only on trademark registration with bad faith, but also on trademark litigation with bad faith. The modified Article 63.1 offers potentially higher amount of damages to be compensated to the trademark owners who suffer from trademark right infringement. The highest amount of damages will soon reach 5 million RMB (approx. 625,000 euro), which exceeds the previous 3 million RMB (approx. 375.000 euro) ceiling on damages.
These changes in the Trademark Law progressively supports the rightful legal stance of trademark owners and users. However, some critical observations are made by legal professionals. For instance, the new Article 63.1 will raise the maximum amount of damages compensable to the trademark holder. The reality has however shown that a case can rarely be decided with over a million RMB of compensation to the plaintiff in the past. If no other measure or regulation is in place to ensure that the future judgments will substantially bring in higher amount of damages to the plaintiff, this new amendment will not actually help too much. Another opinion regarding the actual use of a trademark to mitigate numbers of registration in bad faith shows concerns on the criteria and determination of the term “use”. Because other jurisdictions in which “use” has been a determinant in good faith trademark registration have already encountered difficulties on clarity in practice. Hence, many are looking forward to the upcoming implementation measures to fully gain more faith in Chinese Trademark Law.
Global Connect Admin B.V. | Xuan Hao
