07 June 2019

Chinese Trade Mark Laws Strengthened in Bad Faith Battle

On 23 April 2019, the China National Intellectual Property Administration (CNIPA) enacted revisions to the country's trade mark law to combat trade mark filings which have been used to cause havoc and extract unlawful payments from the rightful brand owners. The China trade mark law has been amended to prohibit the registration of a trade mark "without genuine intention to use."

The new Chinese trade mark law also provides that trade mark attorneys have to inquire regarding their client's intention in filing a trade mark application. The new law allows trade mark examiners to conduct assessments of new applications to identify whether they may be part of an illegal filing pattern. This should assist in spotting and ultimately rejecting fraudulent trade mark applications. When it has been determined that a trade mark application filing is being made in bad faith, the attorney is encouraged to refuse to file the application.

These recent amendments should reduce the need for brand owners to oppose and attempt to cancel such marks. Opposition and cancellation proceedings in China have been very costly for brand owners.

The trade mark law changes also increase potential damages for infringement based on direct evidence of intentional infringement. In addition, the new trade mark law now provides for increased statutory damages, when no direct evidence of damages is offered. Damages for intentional trade mark infringement have been increased, now up to five times the actual damages proved by the trade mark owner.

The new trade mark law now provides that all counterfeit goods and all moulds, including the materials used for such production, shall be destroyed upon the trade mark owner's request. The amended trade mark law states that counterfeit goods shall not be put back into commercial circulation after removal of the infringing trade mark. This was previously a cheap way in which an infringer could work around a settlement agreement or judgment in China, to the frustration of the legitimate trade mark owners.

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