This entry is dedicated to trademarks. The legal panorama on the protection of Intellectual Property Rights is vast in China, and it is composed by several different laws and regulations. It is necessary to start with this subject, in fact all the businesses wishing to enter the Chinese market and to do business in China have their own trademark(s) to protect if they want to expand their presence here.
(A very useful web-site to help the foreign investor understanding IPR in China is the following:
http://www.chinaipr.gov.cn/
).
The Chinese Trademark Law dates from 1982 (the latest version of the
Trademark
Law
is available at:
http://www.npc.gov.cn/npc/xinwen/lfgz/flca/2012-12/28/content_1749326.htm
) with amendments in 1993 and 2001, and Implementing Regulations in 2002, and revised in 2008 (new revised Trademark Law). (Recently changes to the Trademark Law have been discussed, please visit the following web-site:
http://www.managingip.com/Supplement/88447/Supplements/China-IP-Focus-2013-11th-edition.html
).
China’s membership of the Madrid Protocol provides a unitary method of reciprocal trademark registration (for subscribers), with registration based on either a national or a Community trademark (if registered in EU). When dealing with trademarks in China, it is also necessary to make reference to the
Rules on the Recognition and Protection of Well-Known Marks
and to
Measures on the Registration and Administration of Collective Marks and Certification Marks
.
Chinese law prohibits the use or registration of any trademark for identical or similar goods that is a
“reproduction, imitation or translation of another person’s trade mark not registered in China and likely to cause confusion.”
In the case of non-identical or dissimilar goods, the law bans the imitation of the
“well-known mark of another person that has been registered in China, misleads the public and
is likely to create prejudice to the interests of the well-known mark registrant.”
If there are two or more applicants for
“identical or similar trade marks for the same or similar goods”
the one that was registered first prevails (first to register principle). Regulations about the “right of priority” for those applying in China for trademarks for which applications have already been made overseas are similar to those for patents, in accordance with international practice. This right applies to
“the same trade mark for identical goods”
and the prior registration must be no more than six months beforehand (this is the so-called right of priority). Registration by foreign firms under the Madrid Protocol takes about 18 months, while a direct registration using the Chinese domestic system will usually take two and a half to three and a half years—and in some cases up to four years. A trademark is valid for 10 years, after which it may be renewed indefinitely for further 10-year periods. If it is not renewed there is a six-month grace period, after which it is cancelled. A trademark must continue to be used to remain in force. Application for cancellation may be made
“where the use of the registered trade mark has ceased for three consecutive years.”
The registrant then has two months to explain the situation or provide evidence of use.
The trademark authority in China is the Trademark Office, operating under the State Administration for Industry and Commerce. SAIC has wide-ranging market regulation and competition supervisory roles including trademark registration, administration and enforcement.
Individuals and business entities must instruct a Chinese Trade Mark Agent to apply for trademark registration on their behalf.
In parallel with the European position, following preliminary approval by the Chinese Trade Mark Office (hereinafter CTMO) of an application to register a trademark, the application is advertised in the China
Trade Marks
Gazette
and is open for three months to opposition by interested parties. Applicants can file a response to any opposition, and the CTMO will decide the outcome. Applicants and opponents are permitted to appeal to the Trademarks Review and Adjudication Board (hereinafter TRAB) within 15 days of a decision. Where the applicant is dissatisfied with the TRAB decision, it may seek judicial review by filing an administrative appeal to the People’s Court within 30 days of receiving written notification of the TRAB decision.
Assignment and licensing of registered trademarks is also possible. Under Chinese law a registered trademark may be assigned to a third party, although the assignment must be approved by the CTMO, and the assignee must guarantee the quality of the goods on which the assigned trademark is used. Usually the procedure takes six to eight months, based on the current caseload of the CTMO, to obtain this sort of approval. A registered trademark may also be licensed to a third party, but in this case it is preferable that the trademark owner continues to monitor the usage of his/her mark, and the assignee must guarantee, the quality of the goods on which the licensed trademark is used. A copy of the trademark license should be recorded with the CTMO before payment of royalties to an overseas licensor. This process usually takes six to eight months (based on the current caseload of the CTMO).
This entry was intended to introduce the legal framework regulating trademarks in China. In the next entries I will examine Patents, Utility models and Design Rights.
(Some of these articles are extracted from my work titled M&A and Takeovers in China, so if you are interested in this topic, please visit:
http://www.kluwerlaw.com/Catalogue/titleinfo.htm?ProdID=9041140484
).
Cristiano Rizzi