The Impact of the New Trademark Law of China in the Fashion Industry 

March, 2014 - Garrigues

The rapid expansion of brands in the Chinese foreign market has problems relating to the protection of these arise and hence of their owners. The last amendment to the Trademark Law of China reflects one of the main problems that foreign companies often face in China which is "brand hijacking."

The records of "bad faith" requested by the opportunists of fashion brands block applications for registration of trademarks by their rightful owners. The new Chinese Trademark Law, the "good faith" was first introduced as a general principle prohibiting any advantage gained by unfair means through an opposition or litigation in bad faith registration. For example, when an applicant for a trademark registration has a contractual or professional relationship with the legitimate trademark holder, the holder thereof may file an opposition against that trademark application, and if the opposition succeeds, the mark applied may not be recorded.

The new law also protects owners of trademarks in good faith, which is an exception to the basic principle of the first applicant. So if someone has been using an identical or similar mark and it has gained some fame when the mark was applied for, the first user can continue to use it as part of his "prior use."

Another issue is the strong emphasis on taking action against infringements. In this sense, constitutes infringement using a trademark which is identical to a registered trademark for the same goods without the permission of the trademark mark "or" use a similar mark registered for identical products or brand using a brand identical or similar to a trademark in respect of similar goods without the authorization of the trademark, in cases where such use causes brand confusion."

From the administrative point of view, the penalties are increased. Thus, "in cases where the illegal turnover exceeds 50,000 RMB, the fine shall not exceed five times the illegal business volume "and" in cases where no illegal turnover or volume of illegal business is below RMB 50,000, the fine shall not exceed 250,000 RMB"(about 30,000 €).

As to the civil courts, the maximum amount of compensation has increased significantly from 500,000 RMB to 3,000,000 RMB (€ 60,000 € 360,000 approximately).

Moreover, the new law imposes time limits to all proceedings before the Trademark Office and Review Board Resolution brands to accelerate decisions concerning opposition proceedings and review of the denial or invalidation of the mark. Another important development is that the signs can not be represented graphically (like sounds) may also be registered as trademarks.

The third amendment to the Trademark Law of China was held on August 30, 2013 and the new law will come into force on 1 May this year. This shows the determination of China to protect the rights of intellectual property and provide a better environment legal.




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