Interpretation of Issues Related to the Amendment of the Trademark Law

　　On April 23, 2019, the Standing Committee of the 13th National People's Congress decided to amend the Trademark Law of the People's Republic of China. To strengthen the publicity and education of the rule of law, popularize legal knowledge, and create a social atmosphere of knowing and abiding by the law, we introduce and interpret the main clauses and their application of this amendment to the Trademark Law in the form of Q&A, responding to issues of widespread concern in practice.

　　Question 1: What is the background of this amendment to the Trademark Law?

　　In order to implement the decisions and deployments of the Party Central Committee and the State Council, adapt to the economic and social development situation, strengthen intellectual property protection, further optimize the business environment, solve prominent problems in practice, more effectively curb malicious trademark registration, and increase the protection of trademark exclusive rights, the 10th meeting of the Standing Committee of the National People's Congress on April 23, 2019 decided to amend the Trademark Law. This amendment involves a total of 6 articles and will come into effect on November 1, 2019. The State Intellectual Property Office will promptly study and draft supporting laws, regulations, and departmental rules to fully ensure the smooth implementation of the content of this amendment to the Trademark Law.

　　Question 2: Why does this amendment to the Trademark Law need to strengthen the regulation of malicious registration?

　　With the optimization of the trademark registration process, the shortening of the registration cycle, and the reduction of registration costs, it is more convenient for parties to obtain trademark registration. At the same time, there have also been problems such as malicious applications for the purpose of傍名牌 and hoarding trademarks for profit transfer, which have seriously disrupted the market economy order and trademark management order, causing widespread social concern and strong calls for regulation.

　　For the former type of malicious application behavior, the current legal provisions are relatively clear, and the crackdown has been very strong in recent years, effectively curbing this behavior. However, in terms of the regulation of hoarding registration behavior, the law only has general provisions and lacks direct, clear, and operable clauses, resulting in insufficient enforcement in practice. This amendment aims to stop malicious application and registration from the source, so that trademark application and registration return to the original intention of the system, which is based on use.

　　Question 3: In what aspects are the amendments regulating malicious registration reflected?

　　This amendment mainly involves the following three aspects in regulating malicious registration: First, strengthening the obligation to use trademarks, adding the provision that "malicious trademark registration applications that are not for the purpose of use should be rejected," which is first applied at the examination stage to achieve the forward movement of the crackdown on malicious registration, and it is used as a reason for filing an opposition and requesting a declaration of invalidity, directly applicable to the opposition procedure and the invalidation declaration procedure; second, standardizing trademark agency behavior, stipulating that trademark agencies that know or should know that the client has malicious registration behavior shall not accept the entrustment, and once discovered, their responsibilities shall be investigated according to law; third, penalty measures are stipulated for the applicant and trademark agency's malicious application for trademark registration and malicious litigation. Therefore, the regulation of malicious registration behavior runs through the entire trademark application, registration, and protection procedures, and the responsible entities include both applicants and right holders, as well as intermediary service agencies.

　　Question 4: How will the amendments on regulating malicious registration be implemented?

　　As a supporting measure for this amendment to the Trademark Law, the State Intellectual Property Office is studying and drafting departmental regulations—"Several Provisions on Regulating Trademark Application and Registration Behavior".

　　These regulations will refine the content of the legal amendments at the operational level and clarify the specific types of malicious applications and hoarding registrations and other processing measures, such as listing in detail typical behaviors such as registering a large number of trademarks that clearly exceed a reasonable limit, preemptively registering trademarks that have been used by others and have a certain influence, and repeatedly applying for trademark registration for improper purposes. In addition to the rejection and invalidation measures in the trademark registration process stipulated by the Trademark Law, it will also use regulatory measures such as credit files, industry self-discipline measures, and suspension of acceptance of trademark agency business in serious cases, and stipulate that any organization or individual who discovers abnormal trademark application and registration behavior can provide clues to help administrative management departments make judgments and handle them. The regulations have now concluded the public consultation and will be improved based on the feedback, so that the amendments to the Trademark Law can be implemented.

　　In current examination practice, the State Intellectual Property Office has already taken measures against malicious registration according to law. Trademark examiners will comprehensively consider factors such as the applicant's business scope, ability to use, trademark application history, number of trademarks applied for and registered under their name, originality of the applied trademark, and prior judicial judgment results to make individual judgments on whether malicious registration constitutes. According to the provisions of the Trademark Law, if it is considered that the applicant is suspected of malicious application or hoarding registration, relevant explanations can be requested.

　　Question 5: Why is it necessary to increase the obligations of trademark agencies when regulating malicious registration?

　　Currently, trademark agencies are of uneven quality, and there are industry irregularities where some bad agencies assist or directly engage in malicious applications and hoarding registrations. Some agencies establish affiliated companies to apply for a large number of trademarks in unrelated fields, resell them for profit, or use their professional knowledge to maliciously preempt their clients' trademarks and demand high transfer fees, causing a bad social impact.

　　This amendment includes malicious registration applications in the circumstances where trademark agencies are not allowed to accept entrustment and the reasons for punishing trademark agencies, and also as a reason for filing objections and invalidity declaration procedures for trademarks registered by agencies. This is conducive to regulating agency behavior, purifying the trademark agency market order, and encouraging public supervision. The upcoming "Several Provisions on Regulating Trademark Application and Registration Behavior" will clarify the regulatory measures for trademark agencies, such as using credit files, industry self-discipline measures, and suspending the acceptance of trademark agency business in serious cases.

　　Question 6: What amendments have been made regarding the increase in the amount of compensation for infringement?

　　In order to further increase the cost of infringement, punish malicious infringers, strictly protect trademark exclusive rights, and give right holders more sufficient compensation, this amendment, in reference to the relevant provisions of the draft amendment to the Patent Law, increases the multiple of the calculation of the amount of compensation for malicious infringement of trademark exclusive rights from more than one time but less than three times to more than one time but less than five times, and increases the upper limit of the statutory compensation amount for trademark infringement from three million yuan to five million yuan.

　　Question 7: What additional provisions have been added regarding the crackdown on the act of counterfeiting registered trademarks?

　　The act of counterfeiting registered trademarks has greatly infringed on the interests of consumers and seriously interfered with the market environment, and has been a long-term concern of the whole society. This amendment refers to the relevant provisions of the Civil Code on the assumption of civil liability and the Copyright Law on civil sanctions by judicial organs, and clarifies the disposal of goods with counterfeit registered trademarks and materials and tools mainly used to manufacture goods with counterfeit registered trademarks. The newly added content stipulates that in the trial of trademark dispute cases, the people's court may, at the request of the right holder, order the destruction of goods with counterfeit registered trademarks and materials and tools mainly used to manufacture goods with counterfeit registered trademarks; goods with counterfeit registered trademarks shall not enter commercial channels after only removing the counterfeit registered trademarks. The above amendments make destruction and prohibition from entering commercial channels the main disposal methods, greatly increasing the illegal costs of those who counterfeit registered trademarks and effectively deterring them. At the same time, the added provisions balance the administrative handling methods stipulated in the current Trademark Law, making the protection of trademark rights more comprehensive.