Doing Business in China: New Trade Mark Laws

We recently attended the International Trade Mark Association (INTA) Conference in Hong Kong. There were representatives from Microsoft, Gucci, YouTube and Oracle amongst others that spoke and gave some real life examples.

Although counterfeit products may not be as clearly visible on the streets, as they once were, it was apparent from the speakers that counterfeiters are actively operating in an online environment.

Amendments to the Chinese trade mark laws came into effect on 1 May 2014. The legislation aims to improve the efficiency and effectiveness of the Chinese trade mark system.

The changes include:

• heavier penalties have increased to deter infringers from RMB 500,000 (US$80,000) to the tune of RMB 3 million (that’s around half a million US dollars);
• new obligations of good faith – following the principles of honesty and trustworthiness – aimed at deterring counterfeiters from registering brands of other owners or of their partners they may be doing business with;
• multi class applications are permitted in Australia so brand owners who may sell shoes online for example, can register in multiple classes ie class 25 for shoes as well as for retail under class 35;
• ability to register sounds are now permitted; and
• timeframes have been reduced  - examination of an application must be completed within 9 months.

On the ground, brand owners are now getting Customs more involved in helping seize goods at point of export.

It’ll be a case of ‘wait and see’ as there is a fair amount of uncertainty as to how the implementation of such amendments will pan out and how they will work in a meaningful and practical way. One thing is for certain, these long-awaited amendments are welcomed by many brand owners who have been frustrated with the laws to date.