Global IP Matrix - Issue 5

TRADEMARKS
Main Changes of the New Chinese
Trademark Law in 2019
Background
In recent years, with the in-depth
implementation of the trademark and
brand strategy and the continuous
promotion of the reform of trademark
registration facilitation, the number
of trademark applications in China
has been growing continuously. As a
result, China has maintained the title
of ‘top-ranking’ on new trademark
applications, in the world for many
years in a row.
In 2018, 7.3895 million trademark applications
were unbelievably filed nationwide with an
increase of 1.416 million over 2017 and a growth
rate of 23.72 percent. At the same time, many
malicious applications for free ride purposes
and a large number of hoarding trademarks
for profit for transfer also appeared. This has
severely disrupted the market economic order
and the trademark management order, caused
social attention, and has strongly called for
regulation.
As for the malicious application of free ride
behaviour; the current law is relatively clear,
and in recent years, the crackdown has been
very strong, so that this kind of behaviour is
effectively contained. However, in terms of
the regulation against hoarding registration
behaviour, there are only provisions in
principle in the law, and no direct, clear and
operable provisions, leading to an insufficient
crackdown in practice. This amendment aims
to stop the malicious application at the source
so that the trademark application can return to
the original source of the system for use.
Written by Mr. Lei Zhao – Senior Partner at Unitalen Attorneys
www.unitalen.com
Major change 1: strengthen
the regulation against bad
faith applications and bad
faith litigations
First, enhance obligation to use trademark,
adding a new provision “bad faith applications
without use purpose, shall be rejected” in
paragraph 1 of article 4. This new provision
could be even applied in the very early
examination stage by the Chinese Trademark
Office and could be used in opposition and
invalidation actions as a reasonable ground by
the CTMO and any parties including brand
owners.
Basically, “with the purpose of use” it is a
kind of subjective ideology on the directive,
however, how to show the use purpose in
the trademark applications is unclear at this
moment. Some think applicants need to
provide evidence for use or show the intent
to use in future new trademark applications.
Some even think defensive applications of
famous brands, such as full-class applications,
will simply be rejected in the non-used
classes. These subjective understandings
are not accurate; at least from the perspective
of this revision, it should not affect defensive
applications of famous trademarks and good
faith applications without use evidence.
On April 23, 2019, the 10th session of the
standing committee of the 13th Chinese
National People’s Congress adopted a decision
to amend the Trademark Law of the People’s
Republic of China. This revision contains many
highlights which have attracted the attention
and discussion of relevant practitioners and
brand owners. The changes involve six articles
and will take effect on November 1, 2019. The
National Intellectual Property Administration
will study and draft relevant laws and
supplementary regulations and departmental
regulations to fully ensure the smooth
implementation of the revised Trademark Law.
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