Other than state interests and public interests, the Draft specifically provides that legitimate rights owned by others shall not be harmed by any abuse of trademark rights (Article 9), or the relevant parties may request the CNIPA to cancel the trademark in question (Article 49).
No right to preclude
Under the current Trademark Law, a trademark owner cannot preclude others’ use of the mark when the latter have used the identical/similar mark on identical/similar goods and have obtained certain influence prior to its trademark application.
In addition to the above, to make the boundaries of exercise of trademark rights clear, the Draft further clarifies the scenarios where a trademark owner has no right to preclude others’ use which should be considered as normal practice in commerce (Article 62): 1) when the use of one’s own name, title or address is in good faith;2) when the use is to describe the type, nature, quality, function, usage, weight, quantity, value, geographical origin and other characteristics of the goods, or when the name of a place, generic name of the goods, graphic, model, technical term or other descriptive sign is used and contained in a registered mark; 3) when the use only has the purpose of indicating the function, applicable object or context of the product, except if such use would mislead the public.
Malicious litigations have been mentioned since the 4 th Amendment to the Trademark Law in 2019 - in the event of malicious trademark litigation, the Court shall impose penalties on the parties who filed it.
The Draft further adds that it is possible to make counterclaims if losses are caused to the other party. It is provided that the amount of compensation shall include the reasonable expenses paid by the other party to stop the malicious trademark litigation (Article 84).
Other than the highlights above, the Draft contains other amendments which would also be of importance, such as broadening the protection of well-known trademark, refining Articles in relation to trademark infringement, tightening requirements on trademark agencies, digitalising the trademark industry, and emphasising the national strategy on brand protection. Overall, the Draft expands the PRC Trademark Law to 10 chapters and 101 Articles; hence we can see that the extent of change is significant and may have great influence on strategizing brand management and protection in China. We very much look forward to finalisation of the Draft and the following Implementing Regulations in the near future.
