Celia Y. Li

The third Amendment to the Trademark Law of PRC was published by the Standing Committee of the National People’s Congress of the People’s Republic of China (the NPC Standing Committee) on August 30th 2013. Several substantial and procedural provisions are significantly changed in this Amendment. For the foreign entities that are engaging or will engage in doing business in China, it is important to keep abreast of these changes in order to develop their business plans accordingly. This article will discuss the main changes made in this Amendment along with possible legislative intent behind them.

I. Background introduction

Since the issuance of the current Trademark Law of PRC in 1982, the Chinese Trademark Act has been amended twice, first in 1993 and again in 2001 when China joined the WTO. After the second amendment in 2001, the number of trademark applications filed with the Trademark Office increased dramatically. In 2001, 270,417 applications were filed and 202,839 applications were approved for registration by the Chinese Trademark Office. This trend continues so that in 2012 this administrative authority received trademark applications totaling 1,648,316 and issued 1,004,897 approvals for registration over the year. Of the total trademarks filed in 2012, 15% were filed by foreign applicants and 48,586 were applications from national entry of trademark registration under the Madrid agreement.

In view of the drastic increases in the filing of trademarks and in response to the needs of economic development, the State Administration of Industry and Commerce (the SAIC) initiated the amendments to the current Trademark Law in 2003, which are typically called the draft of the amendments. After 10 years of survey and analysis, the Draft of amendment of the Trademark Law had been approved by the NPC Standing Committee on August 30th 2013, and will come into effect on May 1st 2014.

II. Guidelines for the amendment

1. Learn from and coordinate with relevant international conventions/ treaties

Nowadays, the importance of IP protection has been recognized worldwide for purposes o f economy and trade development. Regionalization, assimilation and internationalization are the main trend in development of IP legal system.

Generally speaking, the following conventions/treaties provide the basis of the worldwide trademark protection, the trademark international protection system: the Pairs Convention (1883), the Madrid Protocol (1891), the Nice Agreement (1957), the Trademark Law Treaty (1994) and the TRIPs. One of the common goals of the captioned conventions/treaties is to reduce the difference among trademark protection systems in contracting states, and therefore accelerate the harmonization of trademark protection systems worldwide.

China, as a contracting state of the above conventions/treaties, has a duty to amend its IP laws to meet the requirements of these treaties correspondingly. At the same time, as a developing country, the reality of China’s IP development level and understanding must be taken into account as well. The reality is that although a huge number of trademark applications are filed in China everyday, China has few trademarks that bear international influence.

Thus, this current amendment to the IP laws is rooted in the reality of the China’s business environment along with the needs to meet the requirement of relevant conventions/ treaties. More specifically, the amendments to China’s IP laws need to satisfy the minimum protection standard as required by relevant conventions/treaties. At the same time, the amendments need to be appropriate to the level of IP understanding in China, some of which may be based on the history of the IP law development in other countries.

2. Meeting the needs arose from economic development

 (a) Optimization of the prosecution procedure for trademark applications and improvement of efficiency and effectiveness of trademark disputes According to the current Trademark Law, the prosecution time for a trademark application is relatively long, and therefore an applicant must wait for a relatively long time in order to obtain trademark protection. In addition, the trademark dispute resolution mechanism is too complicated to protect a trademark owner’s trademark right effectively.

(b) Restricting of trademark right Nowadays, more and more countries realize that it is necessary to restrict the trademark right to the extent that it conflicts with the public interests or third party’s lawful right. However, the current Trademark Law does not have any provision that effectively deals with this issue.

(c) Development of Internet related trademark laws The recent hot topics, such as the relation between territoriality of trademark and internationalization of Internet, hyperlink trademark infringement, search engine trademark infringement and etc., are not stipulated under current Trademark Law of PRC.

II. Significant changes made in the new amendment

In response to the above needs along with the requirements of international conventions/treaties, significant amendments are made in the following areas: 1. Trademark registration (a) Extension of scope of registerable marks Under the current Chine s e Trademark Act, only visual marks that can distinguish the goods or services from those of others can be recognized as registerable marks.

Article 8 of the third Amendment expands the protection scope by adding sounds as registerable marks. Under the current law, sounds cannot be registered as trademark.