China is the new black for business growth opportunities. The country is changing rapidly and intellectual property rights are no exception.
Those already doing business in China know the importance of protecting their intellectual property there.
The proposed changes to China's trade mark law don't change the basic approach, that is:
- a trade mark registration is still the best way to protect your trade mark in China
- filing to register your mark early is important, as any prior use rights will be limited and the registration process can take some time.
New changes to China's trade mark laws come into force on 1 May 2014. The changes will be mostly positive for businesses intending to export to China.
Briefly, the changes include the following:
Multi-class applications will be available
Allowing multi-class applications should mean there are some cost savings when filing a trade mark in more than one class directly to the Chinese trade mark office.
At present, a trade mark covering more than one class (eg, 'clothing' in class 25 and 'makeup' in class 3) requires a separate trade mark application for each class.
Multi-class applications will mean that all of your goods and services of interest can be covered in the one application. This is something that applications filed in China through the Madrid Protocol already allow.
The trade mark office will issue more office actions
At face value, this might sound terrible. When filing a trade mark application, we want to avoid compliance issues being raised by the national trade mark office.
The issue to date has been the process. Currently, the trade marks office only has the authority to raise issues with descriptions of the goods or services in an application. If the issue is more substantive then the trade mark office can only refuse registration. Under this system, the applicant needs to file for a review of the decision, which can take 12 to 18 months to consider.
Dealing with more substantive issues at the examination stage will be better for applicants. Applicants will have the opportunity to present submissions to the trade mark office to address any compliance issues. The new process should therefore be quicker and more cost-effective than the present process.
The trade mark office will be quicker
Timeframes for the trade mark office to examine applications will be codified in law. The time limits - which include a 9 month limit for trade mark applications and a 12 month limit for a trade mark opposition - are still quite long by Australasian standards, but they will be shorter than present and applicants will have clearer expectations of when an application will be examined.
Prior use of a trade mark will be recognised
The right of prior use will be introduced in China. Presently, a trade mark registration trumps what could be long-standing use in China.
Under the proposed changes, a trade mark owner that has been using its mark for some time in China, and has an established reputation in the mark, can continue to use that trade mark. However, the prior use will be confined to its original scope, and the owner of the registered trade mark can ask the owner of the prior use trade mark to attach an additional sign to the mark to help distinguish the trade marks.
Tools to counter bad faith improved
Finding that another business has registered your trade mark in China can be frustrating, especially when the registrant is known to you through a distributorship or other commercial arrangement. Amendments to China's trade mark law should make it easier to deal with these types of bad faith applications.
Damages will increase
Statutory damages will increase substantially, from around NZ$100,000 to around NZ$600,000. These are damages that can be awarded when it is difficult to accurately assess the damages or loss of profits that have occurred as a result of an infringement. Punitive damages will also be introduced for instances where the infringement is intentional and has serious consequences.
The proposed changes are welcome. China can be a tricky country when it comes to protecting a trade mark. Being able to respond to a broader range of compliance issues through the examination process is a positive change. And any tools that help protect against trade mark infringement or a trade mark application being filed in bad faith are great to see.An edited version of this article appeared in the April 2014 issue of NZ Retail.