Trademark Enforcement Boost

Highlights of the New Amendment to the PRC Trademark Law

On April 23, 2019, the Standing Committee of the National People’s Congress adopted a new amendment to the PRC Trademark Law. The amended Trademark Law will take effect on November 1 2019, and it reflects the continued effort China is undertaking to crack down on both trademark infringement and bad-faith trademark registration.

At the same time, the State Intellectual Property Office is currently drafting the Regulations on Standardizing the Application for Trademarks Registration (“Regulation”), which will provide specific details to implement the newly amended Trademark Law.

Below are some highlights of the amended Trademark Law:

  1. Emphasis on cracking down on bad-faith trademark registration

The amended Trademark Law allows the China Trademark Office (CTMO) to refuse trademark applications which CTMO has good reason to believe that the applicant has no intention to use. Of course, the Law itself is not specific about what constitutes a “good reason to believe,” but we anticipate that a more precise definition will be found in the final version of the above mentioned Regulation.

It is also worth noting that according to the amended Trademark Law, trademark agents shall be subject to administrative penalties for accepting entrustment while knowing that the trademark application is filed in bad faith. The above mentioned Regulation will also introduce a “Credit File” to further manage the trademark agents. Trademark agents involved in bad-faith trademark registration might even be disqualified if they seriously breach their duties.

  1. More stringent punishment for trademark infringement

The amended Trademark Law also allows courts to award increased levels of punitive damages against infringers in serious counterfeiting cases. Specifically, for serious counterfeiting cases, punitive damages shall be one to five times the standard compensation amount calculated, and the maximum amount of punitive damages is raised from 3 million RMB to 5 million RMB.

Moreover, the new amendments expand the authority to destroy items connected with infringing goods. Authorities are now allowed to destroy not only the infringing goods, but also the tools and materials used to create them. The significance of this deterrent emphasizes the lengths to which China is willing to go to combat infringers.

Final Words

The amended Trademark Law provides the legal bases for more enhanced tools to be wielded by trademark authorities and courts when dealing with bad-faith trademark registration cases. With this additional step towards greater IPR protection in China, we anticipate more and more substantial enforcement actions being taking going forward, as well as more rejections of applications that don’t pass muster.