The Chinese National People’s Congress (NPC) is in the final stages of a process of revision of the Chinese Trade Mark Law that – if implemented – should have positive implications for foreign trade mark owners.

As the importance of trade mark protection in China and the consequent number of foreign trade mark filings in that Country have grown exponentially in the last decade, many foreign applicants have seen their trade mark applications in China rejected on the grounds of an earlier often identical trade mark in the name of a Chinese company or individual. In many cases the Chinese company or individual were the owners of several (in some cases we have come across hundreds) of trade mark applications/registrations for marks known to belong to foreign companies.  Despite the likely ‘opportunistic’ nature of these earlier registrations, foreign trade mark owners have in most cases found it impossible to overcome the obstacle with the Chinese Trade Mark Office or succeed in an opposition or invalidity action against the earlier mark. The situation was incredibly frustrating for the ‘legitimate’ trade mark owners (and their advisors!) who were often left with no option but to approach the owners of the earlier marks with a view to purchasing it, only to be met with requests for ludicrous amounts of money.

The new Chinese Trade Mark Law proposal introduces – amongst others – two key changes that should improve the position of foreign trade mark owners facing this kind of situation:

1)      A requirement for good faith for the validity of a trade mark application;

2)      Removes the need for a prior trade mark to have been used in China in order to form the basis for a challenge to a trade mark application/registration, albeit retaining the requirement, when claiming bad faith, for some form of contractual or other relationship between the applicant and the opposing party which would have enabled the applicant to be aware of the prior mark.

This new legislation is open for a public consultation until 31 January 2013 and we were delighted that the Institute of Trade Mark Attorneys (ITMA) took the initiative of sending a circular to all its members (copy attached here – ITMA Call for evidence – with email attachment here – Chinese Trademark Law Consultation Jan 2013 Information Note) asking for anecdotes of situations such as those described above for reference when submitting its comments to the NPC on the new Trade Mark Law.

Hopefully, this new legislation will be a breakthrough for foreign trade mark owners wishing to protect their marks in China. We presume it will not have a retroactive effect, but it is most definitely promising news. Keltie will support ITMA’s initiative and is preparing a selection of case studies to submit.

Manuela Macchi   15 January 2013