China has adopted a registration system (as opposed to a use system) for protecting trademarks. Under this system, generally speaking, a trademark owner can enjoy the exclusive right of a trademark only when it is registered. Prior use does not guarantee exclusive right of use under the trademark law, though well-known trademarks may be protected without registration. Actual use prior to filing is not required under the trademark law.
According to the trademark law, any visual sign capable of distinguishing the goods or service of one natural person, legal entity or any other organization from that of others, including any word, design, letters of an alphabet, numerals, three-dimensional symbol, combinations of colors, and their combination, may be applied for registration as a trademark.
For filing an application for registration of a trademark in China, an applicant should provide: a) name and address, and nationality. b) trademark specimen; c) specification of goods/service for which a trademark is used ; d) Power of Attorney; e) priority document (if a convention priority is claimed).
An application must be filed based on a basis of per mark per class. Multi-class applications are not acceptable in China. The Chinese Trademark Office (CTMO) does not accept broad description of goods/service applied for. It is advisable that an applicant uses the standard goods/service under the 9th Edition of the Classification of Goods and Services for Trademark Registration (Nice Agreement).
As China is a member country of the Madrid Agreement and Protocol, applications may be filed in China in accordance with the Madrid Agreement and Protocol. Foreign applicants may file international trademark applications with the home Trademark Office designating China for extension protection under the Madrid Agreement and Protocol.
All applications must go through a preliminary examination for formalities and substantive examination for prior rights. It will take about three months for CTMO to complete the preliminary examination and issue a filing receipt when all formality requirements are met and all the goods/service applied for are accepted.
Then, the substantive examination will start and last 24 to 36 months currently. If CTMO does not find any reason for rejection, the application will proceed to publication for opposition purpose. If no opposition is filed within three months as from the date of publication, or if the opposition fails, the application will be granted for registration and a certificate of registration will be issued. The registration will be in effect for 10 years and may be renewable for further 10 years upon payment of renewal fees.
To file an opposition, the opponent must submit, within a period of three months of the publication of the mark, grounds for opposition and no extension of time is available. However, it is allowed for the opponent to file supplementary arguments and the relevant evidence within three months from the date of filing the opposition.
It will take 24 months for CTMO to examine the opposition case and make a decision. If either party is dissatisfied with the decision, they can file an appeal with the Trademark Review and Adjudication Board (TRAB). If still unhappy with the outcome, they can file an administrative lawsuit against the decision of TRAB with Beijing No. 1 Intermediate Court.
If a registered trademark fails to be in use for three consecutive years in China, it will become vulnerable to cancellation for non-use. Any third party may file such a cancellation action with CTMO. Any interested party may also challenge a registered trademark based upon: a) it is inherently unregisterable or was registered by fraud or other illegitimate means. b) if it copies or pirates a prior well-known trademark. c) it was registered by a distributor without authorization. d) it comprises improper geographical indications. E) it infringes prior rights. Such a cancellation action should be filed with TRAB within five years. If based on a well-known trademark, the cancellation action can be filed without the time limit.
In China, under the trademark law, the following would be considered constituting infringement of a registered trademark: a) using a mark that is identical or similar to a registered trademark in relation to identical or similar goods/services without authorization. b) selling goods bearing a counterfeiting registered trademark or providing services by using a counterfeiting registered trademark with knowledge of that registered trademark. c) counterfeiting or manufacturing or selling specimens of a registered trademark without authorization. d) removing a registered trademark without the consent of the trademark owner and replacing it with another mark and selling goods bearing the new mark.
There are two ways for a trademark owner to enforce his trademark right in China.
One is administrative action and the other is court action. Administrative actions are widely adopted by trademark owners because they are quicker and cost effective. The trademark owners can file complaints with the Administration for Industry and Commerce (AIC) and Technical Supervision Bureau (TSB) requesting administrative raid actions under the trademark law or product quality law. The AIC or TSB are empowered to seize and confiscate or destroy the infringing goods, labels or tools. The raid actions can be finished within a couple of months or even weeks. Therefore, the trademark owners can stop the counterfeiting activities efficiently. If the value of the seized counterfeiting goods or illegal income of infringers meets with the criminal threshold, the AIC or TSB will transfer the cases to the police for public prosecution. The suspects will be arrested and those who commit crimes can be sentenced to up to seven years in prison and imposed a criminal fine.
If claiming damage, trademark owners need to go to court. Civil action is becoming more and more attractive because it is the only legal action that allows trademark owners to be awarded damages and from the current trend, some local courts could make a ruling to increase the amount of compensation in trademark infringement cases by going beyond the maximum amount of statutory damages (500,000 yuan). To ensure a successful result in such civil actions, trademark owners should locate and freeze the assets of the infringers so that damages can be securely collected.
The author is partner of Unitalen Attorneys at Law. The views expressed here are the author's own.