In terms of rights and obligations, Chinese trademark law is broadly similar to European trademark law. However, it has only existed in this form for about 15 years. The last improvement to the law was only 4 years ago. In order to make it easier for the courts to interpret certain legal terms, the Supreme Court has issued a new regulation.

In China, the highest court has adopted a set of rules that provides both procedural and trademark law instructions for trademark dispute proceedings before administrative courts in 30 articles. The rules will come into force on March 1, 2017.

Specifically, the rules are directed at the administrative courts, which conduct proceedings on decisions of the Boards of Appeal of the Administration of Industry and Commerce in matters such as:

– Rejection of a trademark application;

– Opposition to a trademark application;

– Cancellation or declaration of invalidity of a registered Trademarks.

The regulations deal to a large extent with the refusal of protection due to descriptive character, risk of deception and infringement of older third-party rights, including bad faith trademark applications by unauthorized persons.

The following summary of the contents of the 30 articles provides a picture of where the Supreme Court sees a need for clarification in individual cases:

Art. 2: The court shall base its decision on the submissions of the parties.

Art. 3: With regard to identity and Risk of Confusion of a Trademarks with official signs of China, the impression of the trademark as a whole must be taken into account.

Art. 4: Deceptive and misleading Trademarks regarding the quality and place of origin of the goods must be rejected.

Art. 5: The legal ground for refusal of protection “other negative effects” (Art. 10.8 Trademarks Act) includes Trademarks that have a negative influence on the public interest or the social order or that contain the name of public figures (politics, culture, economy, religion, ethnicity).

Art. 6: Trademarks that contain, in addition to another component, the name of a domestic or foreign region known to the public in China are eligible for protection if they as a whole have a meaning beyond the mere indication of origin.

Art. 7: Trademarks must be assessed as a whole with regard to the goods/services claimed from the point of view of the general perception of the target public. A single descriptive element of the Trademarks does not prevent Protectability, provided that the Trademarks as a whole is distinctive.

Art. 8: Foreign-language Trademarks must be assessed in the light of the language skills of the targeted Chinese public.

Art. 9: Shape marks are a priori not protectable. However, if they have become established in trade due to long and extensive use, they can be registered.

Art. 10: Whether a Trademarks is a non-protectable generic term is determined by whether the term is customarily used by the relevant laws, countries, industry standards or the targeted Chinese public (throughout China) to designate the product. The time for the assessment is generally the date of application, but factual changes that have occurred up to the date of grant can also be taken into account.

Art. 11: A Trademarks that suggests but does not describe characteristics of the product (e.g. raw material, function, purpose, weight, quantity, origin) is still protectable if it has a distinctive function.

Art. 12: If a trademark is attacked on the basis of a non-registered well-known trademark, various aspects must be considered as a whole, such as similarity of the trademarks (reproduction, imitation, translation), similarity of the products, degree of recognition of the earlier trademark, attention of the public at the time of purchase or intentions in the later trademark application.

Art. 13: If a trademark is attacked on the basis of a registered well-known trademark, various aspects must be considered as a whole, such as similarity of the Trademarks (reproduction, imitation, translation), similarity of the products, degree of recognition of the earlier trademark, overlapping with regard to the target public and its attention when purchasing or circumstances of the individual case with regard to the legality of the later trademark.

Art. 14: In the event of a conflict with a registered well-known Trademarks, the court may hear the case directly if the challenged later trademark was registered less than five years ago.

Art. 15: Unlawful registration of another’s trademark by the agent is deemed to have occurred if the applicant for the registration of another’s trademark is an existing or future agent, distributor or retailer of the trademark owner or if he is a confidant (e.g. a family member) of an agent, etc.

Art. 16: An “other relationship” between the trademark applicant and the owner of the earlier Trademarks also includes the following relationships: (1) family relationship, (2) employment relationship, (3) geographical proximity, (4) unsuccessful negotiation of a trademark representation (5) unsuccessful negotiation of a business relationship.

Art. 17: A Lawsuit for a declaration of invalidity of a disputed trademark due to misleading geographical indications in the trademark within the meaning of Art. 16 of the Trademarks Act must be upheld if the plaintiff can prove that the targeted public is likely to be misled as to the origin or the product characteristics associated with the geographical indication.

Art. 18: Senior rights of a first user of the Trademarks which prevent a subsequent Application by a third party are also to be understood as his civil rights or other interests worthy of protection. However, if these senior rights no longer exist at the time of registration, they no longer prevent the registration of the later Trademarks.

Art. 19: If the Lawsuit claims that the challenged Trademarks would infringe its Copyright Law, the court shall examine whether the requirements of the Copyright Law are met.

Art. 20: If the plaintiff claims that the challenged trademark infringes his right to a name, the court should examine whether the targeted public associates the trademark or the goods with the plaintiff. The same applies to pseudonyms, artists’ names, translated names, provided that these names are known to the public and are associated with the plaintiff.

Art. 21: If the Lawsuit claims that the challenged Trademarks would adversely affect its trade name, the court shall examine whether the trade name has acquired a certain reputation, whether the Trademarks applied for are identical or similar to the trade name, whether there is a Risk of Confusion between the Trademarks and the trade name.

Art. 22: An action for cancellation based on Copyright Law must be upheld if the title or the names of the characters have a high degree of recognition and if, as a result, the public is misled because it assumes a connection between the later Trademarks and the owner of the Copyright Law.

Art. 23: If the plaintiff, on the basis of his own earlier used well-known Trademarks, demands the cancellation of a later applied for disputed trademark, the Lawsuit must be upheld if the later trademark was applied for in an “otherwise illegitimate manner”, if the owner of the later trademark knew or should have known of the earlier used trademark. The Lawsuit can prove the reputation of the earlier used Trademarks by the duration of use, territory of use, sales volume, advertising and publicity. If the later trademark is registered for different goods, the Lawsuit of the user of the earlier trademark must be dismissed.

Art. 24: A Trademark may also be canceled for being obtained by “other illegitimate means” if it was not registered in bad faith, but if it disturbs the order of Trademarks registration, has a negative impact on the public interest, results in an illegitimate commitment of public resources or serves other illegitimate purposes.

Art. 25: In the examination for bad faith filing, the court should apply a holistic approach. If the Applicant of the disputed Trademarks cannot show a legitimate reason for the Trademarks application, the court shall presume bad faith.

Art. 26: Use by the licensee or any other use that is not contrary to the free will of the trademark owner should also be deemed to be use that preserves the rights pursuant to Art. 49 of the Trademark Act. Use in a slightly different form from the registered Trademarks should be considered sufficient. The transfer or licensing of the Trademarks, the public announcement by the trademark owner that the trademark is registered or the declaration that the trademark owner has exclusive rights are not sufficient use.

Art. 27: A violation of the procedural rules by the Board of Appeal is deemed to have occurred in particular if the right to be heard is denied, if the composition of the Board of Appeal has not been communicated to the party and if a member of the Board should have withdrawn.

Art. 28: If the decision of the Board of Appeal results in the cancellation of the Trademarks and the facts on which the Board of Appeal based its decision no longer exist, the court may determine the new facts and decide the case anew.

Art. 29: If the Board of Appeal admits a Trademarks for registration on the basis of new facts and legal grounds which the Applicant could not yet present in the previous proceedings for objective reasons, the appeal before the Court by the proprietor of the earlier Trademarks cannot be dismissed on the basis of “the same facts and grounds”.

Art. 30: Second proceedings before the court must be dismissed if a court has already validly ruled on the facts and legal bases.

Art. 31: The Ordinance shall enter into force on March 1, 2017.

Links: Supreme_Court_Regulations_on_Several_Trademark_issues_-with_authorized_approval_of_NTD.PDF