By  Nina Li ，Partner of IP March

Table of Contents

I.  Features of Chinese Trademark System

II.  What Constitutes a Trademark according to Chinese Trademark Law

III. Registration Procedure

IV. Appeals

V. Oppositions

VI. Maintenance and Removal of Registrations

VII.  Enforcement and Remedies for Violations of Trademark Rights

Features of Chinese Trademark System

1. Source of trademark rights

The Trademark Law of the People’s Republic of China.

2. How do trademarkrights arise?

By registration.

3. Bona fide intention to use the trademark

To apply for registration, the applicant does not need to prove actual use or bona fide intent to use the mark. However, malicious trademarks that are applied not because of the actual intention to use the marks shall be rejected.

4. Commercial useof thetrademark 

Commercial use is not required to obtain a registration of a trademark in China.

5. Nice Classification?

The CNIPA uses the Nice Classification.

6.“Class-wide”applications not allowed 

Class-wide applications are not allowed in China. The applicant should identify the specific goods or services for which the mark will be used.

7. Protection to unregistered trademarks

Where a trademark used for identical or similar goods is a reproduction, imitation or translation of another person’s well-known trademark not registered in China and is liable to cause public confusion, no application for registration may be granted and its use shall be prohibited.

An application to register a trademark for identical or similar goods shall not be approved if:

    · the trademark under application is identical or similar to an unregistered trademark already used by another party;

    · the applicant is clearly aware of the existence of the trademark of that other party due to contractual, business or other relationships with the latter; and

    · that other party raises an opposition to the trademark application.

No trademark applicant may, by illegitimate means, seek to register a trademark that is already in use by another person and has acquired a certain influence.

Anyone that uses another party’s unregistered well-known trademark as a trade name and thereby misleads the public, which constitutes an act of unfair competition, shall be dealt with in accordance with the Anti-unfair Competition Law of the People’s Republic of China.

If, before a trademark applicant submits its trademark application, another party has used a trademark that has acquired certain influence and is identical or similar to the registered trademark for the same or similar goods or services, the holder of the exclusive right to use the registered trademark has no right to prohibit that party from continued use of the trademark within the original scope of use. However, the right holder may require the latter to add a mark to distinguish between the two.

8. Legal rights conferred by a trademark registration

The exclusive right to use the registered trademark. However, this right is limited to trademarks which are registered upon approval and to goods for which use of the trademark is approved.

Any of the following acts shall constitute infringement of the exclusive rights to use a registered trademark:

    · using a trademark that is identical to a registered trademark for the same kind of goods without a licence from the trademark owner;

    · using a trademark that is similar to a registered trademark for the same kind of goods, or using a trademark that is identical or similar to a registered trademark for similar goods, without a licence from the trademark owner, where such use is likely to cause confusion

    · selling goods that infringe the exclusive right to use a registered trademark;

    · counterfeiting, or making without authorisation, representations of another person’s registered trademark, or selling such representations;

    · altering a registered trademark without the permission of its owner and selling goods bearing such an altered trademark;

    · intentionally committing acts that infringe the exclusive right to use a trademark, or facilitating the commission of such acts; and

    · impairing another party’s exclusive right to use a registered trademark in any other manner.

What Constitutes a Trademark according to Chinese Trademark Law

Any signs, including words, graphs, letters, numbers, three-dimensional symbols, colour combinations, sounds or any combination thereof, that are capable of distinguishing the goods of a natural person, legal person or other organisation from those of others may be applied for registration as trademarks.

A registrable trademark must bear noticeable characteristics and be readily distinguishable and must not conflict with legitimate rights previously obtained by others.

None of the following signs may be used as trademarks:

    · Signs that are identical with or similar to the state name, the national flag, emblem or anthem, the military flag, emblem or songs or medals of the People’s Republic of China; or sings that are identical with the names or emblems of central state organs, the names of specific locations where central state organs are seated or the names or designs of landmark buildings;

    · Signs that are identical with or similar to the state name, national flag, national emblem or military flag etc., of a foreign country, except with the consent of the government of that country;

    · Signs that are identical with or similar to the name, flag or emblem of an international inter-governmental organisation, except with the consent of that organisation or except where it is unlikely to mislead the public;

    · Signs that are identical with or similar to an official mark or inspection stamp that indicates control and guarantee, except where authorised;

    · Signs that are identical with or similar to the symbol or name of the Red Cross or the Red Crescent;

    · Signs that discriminate against any nationality;

    · Signs that are deceptive and likely to mislead the public in terms of the quality, place of production or other characteristics of the goods; and

    · Signs that are detrimental to socialist ethics or customs, or that have other unwholesome influences.

No geographical names of administrative divisions at or above the country level or foreign geographical names known to the public may be used as trademarks, except where the geographical name has another meaning or constitutes part of a collective trademark or certification trademark. Registered trademarks in which geographical names are sued shall remain valid.

None of the following marks may be registered as trademarks:

    · a mark which bears only the generic name, design or model number of the goods concerned;

    · a mark which only directly indicates the quality, principal raw materials, function, use, weight, quantity or other features of the goods; or

    · a mark that otherwise lacks of any distinctive character.

However, such a mark may be registered as a trademark if it has acquired distinctive features through use and is readily distinguishable.

No application for registration of a three-dimensional symbol as a trademark may be granted, where the sign merely indicates the shape inherent in the nature of the goods concerned, or is dictated by the need to achieve technical effects or the need to give the goods substantive value.

Where a trademark bears a geographical indication of the goods and the place indicated is not the origin of the goods in question, thus misleading the public, the trademark shall not be registered and its use shall be prohibited. However, where the registration is obtained in good faith, it shall remain valid.

Registration Procedure

CNIPA governs the examination and registration procedures of trademarks.

Formality examination: After a trademark application is filed with the CNIPA, examiners will conduct formality examination, including the examination on the descriptions of designated goods/services. If the application meets the formality requirement, official filing receipt will be issued by the CNIPA and the trademark application will enter into substantive examination procedure. However, if the examiners consider that amendment needs to be made, e.g. non-standard descriptions have been used, official notification will be issued. The trademark application will not be officially accepted before proper response is made within 30 days from receipt of the notification. Therefore, the formality examination may take several days to around 3 months.

Substantive examination: After a trademark application is officially accepted by the CNIPA, substantive examination concerning whether the mark is registrable, whether the mark violates absolute grounds or relative grounds, etc. will be conducted. Trademark application will be preliminary approved of registration or provisionally refused. If it is provisionally refused, the applicant is entitled to appeal with the CNIPA. The substantive examination procedure may take around 6 to 12 months.

Publication & registration: Trademark applications that are preliminary approved of registration will be published on the Trademark Gazette for opposition by third parties within 3 months.  If no opposition is initiated, the trademark will be approved of registration and a registration certificate will be issued in around 1 to 2 months.

Appeals

If a trademark application is provisionally refused by the CNIPA, the applicant is entitled to pursue the application by lodging an appeal against the provisional refusal with the CNIPA (review department) within 15 days of the date of receipt of the refusal. If the provisional refusal is sent via registered mail, the date indicated by the postmark shall be considered as the date on which the applicant receives the notification. If the provisional refusal is sent via electronic form, e.g. email, through its e-system, the notification will be deemed as received by the applicant 15 days after it was sent. If the deadline falls into public holidays, it can be automatically extended to the first working day after the holidays. Otherwise, extension is not allowed. However, after appeal is filed, the applicant can supplement further evidences within three months.

If the appeal is officially accepted by the CNIPA, adjudication usually will be made in around 6 to 12 months.

If dissatisfied with the adjudication, the applicant is entitled to bring a lawsuit (first instance) against the adjudication with the Beijing Intellectual Property Court, within thirty days as from the date of receipt of the adjudication. For administrative lawsuit (first instance), against CNIPA’s adjudication on the appeal concerning a provisional refusal, it usually takes around 5 to 6 months for the judges to make the judgment.

If dissatisfied with the judgment made by the Beijing Intellectual Property Court, the applicant is entitled to further appeal (second instance) with the Beijing Higher People’s Court, within thirty days as from the date of receipt of the judgment of the first instance. The judgment usually will be made in around 3 to 4 months.

Oppositions

The opposition period is three months as from the publication date of the mark.

If a holder of prior rights or an interested party holds that the published trademark is in violation of relative grounds for refusal, it may oppose the mark within the opposition period. Any party that is of the opinion that the published mark is in violation of absolute grounds for refusal may oppose the mark within the opposition period. Oppositions should be brought to CNIPA.

Where an opposition is raised, the CNIPA will send a notification and a copy of the documents filed by the opponent to the opposed party. The opposed party has 30 days from receipt of the notification to respond. For both opponent and the opposed party, both of them are offered a three-month period to supplement further evidences. Whether the opposed party responds or not, the CNIPA will decide whether to approve the registration of the mark after investigation and verification.

If the opponent is dissatisfied with the decision that the trademark is approved of registration, it can initiate invalidation after the mark is registered.  If the opposed party is dissatisfied with the decision not to approve the registration of the trademark, the opposed party is entitled to appeal with the CNIPA within 15 days of receipt of the decision.

 Maintenance and Removal of Registrations

A registered trademark remains valid for 10 years in China, as from the date on which the registration is approved, and may be renewed for subsequent 10-year periods thereafter, as from the date immediately following the expiry date of the last period of validity.

1. The CNIPA may cancel a trademark registration on its own.

According to the Trademark Law, a trademark may be cancelled at the initiative of the CNIPA if the trademark is ineligible to function as trademark, it is malicious trademark registration not for use, goods/services other than IP agency services applied by IP agent or the trademark registration was obtained by fraudulent or other illegitimate means.

If a trademark owner, without authorization, alters the registered trademark, its name or address of or other registered information, it will be ordered to correct such alteration within a timeframe specified by the relevant local AMR; if it fails to do so, the registration will be cancelled.

2. A third party may seek cancellation of a trademark registration

According to the Trademark Law, if a registered trademark violates the absolute grounds, e.g. the trademark is ineligible to function as trademark, it is malicious trademark registration not for use, goods/services other than IP agency services applied by IP agent or the trademark registration was obtained by fraudulent or other illegitimate means, other entities or individuals may request the CNIPA to invalidate the trademark.

If a trademark registration infringes another party’s prior civil rights, that party or another interested party may, within five years of registration of the trademark, request CNIPA to invalidate the trademark. If the registration was obtained in bad faith, the owner of a well-known trademark is not bound by the five-year restriction in seeking invalidation.

If a registered trademark has become the generic name of the goods for which it is used or has not been used for three consecutive years without a justifiable reason, any entity or individual may apply to the CNIPA for revocation of the registered trademark. 

3.Procedure for appealing a decision cancelling a registration

An interested party which is dissatisfied with the decision that a trademark registration is cancelled or invalidated at the initiative of the CNIPA or a trademark registration is cancelled by the CNIPA upon other party’s request may apply for a review before CNIPA within 15 days of receipt of notice of the decision from the CNIPA. If a party is dissatisfied with the adjudication of the review, it may file lawsuit before the people’s court within 30 days of receipt of notice of the adjudication from CNIPA.

Where other entities or individuals request CNIPA to invalidate a registered trademark and are dissatisfied with its decision, they may file lawsuit before the people’s court within 30 days of receipt of notice of the decision.

 Enforcement and Remedies for Violations of Trademark Rights

1. Available remedies against trademark infringement

Customs measures: The owner of a registered trademark can record its registered trademark right with the General Administration of Customs of the People’s Republic of China. Upon discovering suspected infringing goods pending import or export, the trademark owner may present an application to Customs at the port of entry or exit to detain such goods and provide Customs with security. Customs will then detain the suspected infringing goods.

On discovering any imports or exports that are suspected of infringing a recorded registered trademark right, Customs shall immediately notify the trademark owner in writing of the suspected infringement. If the trademark owner presents an application and provides security within three working days of the date of service of this notification, Customs will detain the suspected infringing goods.

Customs shall investigate and then determine, within 30 working days of the date of detention, whether the suspected infringing goods are in fact infringing. The suspected infringing goods shall be confiscated by Customs if it determines that they have infringed a registered trademark right. Where the import or export of infringing goods constitutes a crime, criminal liability shall be investigated according to the law.

AMR measures: A trademark owner or an interested party may request the relevant administrative department of Administration for Market Regulation (AMR) to address the issue. If the AMR finds that an infringement has occurred, it shall order the relevant party to immediately cease the infringing acts, and shall confiscate and destroy the infringing goods and instruments mainly used to manufacture the infringing goods and forge the registered trademark. Where the illegal business revenue is RMB50,000 (about USD7,250) or more, a fine of up to five times the illegal business revenue may be imposed; where there is no illegal business revenue or the illegal business revenue is less than RMB50,000 (about USD7,250), a fine of up to RMB250,000 (about USD36,250) may be imposed thereon.

If a party commits trademark infringement on two or more occasions within five years or falls under any other serious circumstances, it shall be subject to more severe punishment.

If a party is unaware of the infringing nature of products that it sells, can prove that the products were obtained by legitimate means and can provide information on the suppliers of the products, the AMR shall order it to stop selling the products.

In case of a dispute over the amount of damages due for trademark infringement, the parties may apply to the AMR for mediation, or may file lawsuit at the people’s court in accordance with the Civil Procedure Law of the People’s Republic of China. If the parties fail to reach agreement through mediation, or fail to execute the mediation agreement once it has become effective, the parties may file lawsuit at the people’s court in accordance with the Civil Procedure Law of the People’s Republic of China.

The AMR has the power to investigate any act of trademark infringement. If it suspects that a crime has been committed, it shall promptly transfer the case to a judicial department for handling in accordance with the law.

In investigating a case of suspected trademark infringement, an AMR at or above county level may conduct inspections and seal or seize articles that are proven to have been used for the infringement.

Judicial remedy: A trademark owner or an interested party may file lawsuit before the people’s court.

The amount of damages for trademark infringement shall be determined based on the actual loss suffered by the trademark owner as a result of the infringement. If it is difficult to determine the actual loss suffered, the amount of damages may be determined according to the profits earned by the infringer. If it is difficult to determine both the loss of the trademark owner and the profits earned by the infringer, the amount of damages may be reasonably determined by reference to the multiple of royalties payable for a licence for the trademark. If the infringement is malicious and serious, the damages may be more than doubled and less than five times. The amount of damages awarded shall cover reasonable expenses incurred by the trademark owner in stopping the infringing act.

If the trademark owner has exhausted its efforts in discharging its burden of proof, but the account books and materials relating to the infringement are mainly controlled by the infringer, the people’s court may order the infringer to submit account books and materials relating to the infringement. If the infringer fails to provide such account books or materials, or provides false account books or materials, the people’s court may render a judgment on the amount of damages based solely on the claims of, and the evidence presented by, the trademark owner.

If it is difficult to determine the actual loss suffered by the trademark owner as a result of the infringement, the profits earned by the infringer from the infringement or the royalties for a licence, the people’s court shall render a judgment awarding damages in an amount of up to RMB5 million (about USD725,000) based on the circumstances of the infringement.

If the trademark owner or an interested party proves that another party has infringed or will soon infringe its trademark, and that unless promptly stopped, such infringement will cause irreparable damage to its legitimate rights and interests, it may, in accordance with the law, apply to the people’s court for an injunction to preserve assets before a lawsuit is filed.

In order to stop an infringement, and where evidence may vanish or be destroyed, or may become unobtainable in the future, the trademark owner or interested party may, in accordance with the law, apply to the people’s court for evidence preservation before filing a lawsuit.

If a party, without the permission of the owner of a registered trademark, uses an identical trademark for the same kind of goods, which constitutes a crime, then in addition to compensating for losses suffered by the trademark owner, that party shall be investigated for criminal responsibility in accordance with the law.

If a party counterfeits or makes without permission representations of another person’s registered trademark, or sells such representations, which constitutes a crime, then in addition to compensating for losses suffered by the trademark owner, that party shall be investigated for criminal responsibility in accordance with the law.

If a party knowingly sells goods bearing a counterfeit registered trademark, which constitutes a crime, then in addition to compensating for losses suffered by the trademark owner, that party shall be investigated for criminal responsibility in accordance with the law.

2. Procedure for pursuing claims for violation of trademark rights

The trademark owner or an interested party may file lawsuit before the people’s court or request the relevant AMR to address the dispute. The AMR’s decision may be appealed before the people’s court. There are usually two instances of appeal. 

3. Typical defenses available to a defendant in trademark litigation

If, before an applicant applies to register a trademark, another party has used an identical or similar trademark that has acquired a certain influence for the same or similar goods or services, the applicant cannot prohibit that party from continued use of its trademark within the original scope of use. However, the applicant may require the latter to add a proper mark for the purposes of distinguishing between the two marks.

Where a trademark owner seeks damages for infringement and the alleged infringer counterclaims that the trademark owner has never used the registered trademark, the people’s court may require the trademark owner to provide evidence of actual use of the registered trademark in the three years prior to the lawsuit. The alleged infringer shall not be liable for compensation if the trademark owner cannot prove actual use of the registered trademark in the three years prior to the lawsuit, and further cannot prove other losses suffered as a result of the infringement.

If a party is unaware of the infringing nature of products which it is selling, can prove that the products were obtained by legitimate means and can provide information on the suppliers of the products, it shall not be liable for compensation.

4. Procedure for appealing a decision in a trademark case

If dissatisfied with a first-instance decision of the local people’s court, a party may appeal to the people’s court at the next level within 15 days of the date of service of the decision. There are usually two instances of appeal.