This article is co-written by Landy Jiang and Melanie Zhu(Rouse).

Because the recently issued amendments to China’s Trademark Law are not likely to come into force for some time, brand owners might be tempted to sit back and think there’s nothing they need to do at the moment. That would be a mistake.

The proposed amendments, particularly those relating to bad faith registrations and use requirements, are a reflection of the government’s continuing efforts to strengthen the intellectual property system, and an indication of both current trends in China’s trademark scene and likely changes to the practice of CNIPA (China National Intellectual Property Administration) and the courts. To avoid unpleasant surprises, and make sure you are well placed to take advantage of these trends and changes, now is the time to check brand protection and enforcement strategies and make any necessary adjustments.

Here are six key changes to consider.

Portfolio management strategies

1. Filing defensive applications: Article 22 of the draft amendments provides that, where a large number of applications for registration of the same mark are filed without any intention to use the mark, those applications will constitute bad faith applications. Brand owners accustomed to using defensive filings as a means of preventing trademark squatting in China should, therefore, now be giving very careful consideration to the applications they file. Whereas defensive filings will still be necessary, careful consideration should be given to the marks and the goods/services in relation to which registration is sought, and to whether and what evidence of use, or intended use, can be filed. In appropriate cases, consideration may also be given to relying on the extended protection of well-known marks (see more on this below).
2. Developing new trademarks: Article 22 also classifies as bad faith applications, those for marks that are detrimental to the national or public interest, or have otherwise significant negative associations. This should be borne in mind when developing and registering marks, particularly any marks that contain political, religious, racial, or sexual elements.
3. Fulfilling use requirements: While details of the proposed amendments are yet to be finalised, strengthening the use requirements is a major focus for removing ‘dead wood’ from an overcrowded register. Among other things, a compulsory declaration of use of a registered mark every five years has been contemplated, with the Trademark Office making spot checks requiring the production of such evidence. Whatever form the requirements ultimately take, brand owners should be taking steps now to create and maintain an evidence bank containing appropriate evidence of use of all their marks. They should also be conducting regular audits to ensure that they have appropriate evidence of use in place for all their marks.

Enforcement strategies

4. Making greater use of enforcement authorities: The power of enforcement authorities is being significantly enhanced, giving brand owners more and better options for tackling trademark infringement. In the past, because of the limited penalties enforcement authorities could impose, even successful administrative actions would often not be sufficient to deter infringers, and infringement would continue. That is changing, as authorities will be able to impose more stringent penalties. As a result, administrative actions should be playing an increasing role in enforcement strategies.
5. Combatting bad faith registrations: Bad faith trademark applications have long been a major problem in China and reducing them is a major focus of on-going efforts to improve the intellectual property system. The actions available to brand owners in this area are expanding and enforcement strategies should be reviewed with this in mind. For example, Article 83 of the draft amendments proposes that any party suffering damage from a bad faith filing can bring a civil action and claim damages, which would include at least the reasonable legal costs of taking action. The draft also makes provision for applications to CNIPA for the mandatory transfer of bad faith registrations, under certain circumstances.
6.  Actions based on well-known mark protection: Because the draft amendments extend the scope of protection available to well-known marks, action may now be available in situations where in the past it would not have been. Cross-category protection, for example, has been extended to unregistered well-known marks. It is also important to note that both local and international registrations will be taken into account in determining whether a mark is well-known. Further, dilution, tarnishment, and free-riding are prohibited in relation to marks that are “familiar to the general public”. Brand owners should be ready to take action in appropriate cases: preserving and maintaining appropriate evidence will be key.

Considering and checking these aspects of your trademark protections and enforcement strategies now, and making appropriate adjustments, will help ensure brand owners are well-placed to benefit from current trends and developments, and to take defensive action wherever necessary.