Further Details about Changes to China’s Trademark Law

Article 69 is new in the revised law and addresses two distinct situations involving trademark activity outside China’s borders.  First, where confirmation of a trademark’s well-known status in China is needed in the course of overseas trademark examination or case proceedings, the National Intellectual Property Administration may, upon request, make a formal confirmation of well-known status in accordance with the recognition factors set out in Article 63.  This provides a mechanism for Chinese trademark owners to obtain official documentation of well-known status for use in foreign proceedings.  Second, where a trademark agent handles overseas trademark registration or other trademark matters for a Chinese client using fraud or other improper means, causing harm to the client’s interests or to national interests, public interests, or the legitimate rights of others, the agency misconduct penalty provisions apply.  This extension of Chinese administrative penalties to overseas agency conduct is notable for agents handling international filing work on behalf of Chinese clients.  Concerning the previous law’s statutory damages cap of RMB 5,000,000 (approximately USD 690,000 at current exchange rates) for cases where actual losses, infringer’s profits, and license fee multiples are all difficult to determine, that has been retained, as has the punitive damages multiplier of one to five times the base amount for willful infringement with serious circumstances.  The revised law in Article 78 clarifies the non-use defense: a defendant may raise the rights holder’s failure to use the mark as a defense to a damages claim, and the relevant three-year use period is now expressly anchored to the period before the infringing act occurred, rather than simply the preceding three years as it was previously worded.

Commentary on China’s Revised Trademark Law

The newly revised Trademark Law, which will go into effect on January 1, 2027, was recently the topic of discussion on the IP Salon column of the CNIPA website.  The opinions of Liu Youhua (President of the IP Law Association of Hunan Law Society) and Zhang Yang (Vice President of the Henan IP Institute) are summarized below:

Liu:  The new revision addresses the critical issue of malicious trademark registrations by establishing a closed-loop regulatory framework featuring preliminary trademark search, interim adjudication, ex-post accountability, and joint liability for trademark agencies.  Specifically, Article 19 integrates the lack of intent to use and the use of improper means, enabling the provision to apply across the three major procedures of refusal, objection, and invalidation.  Meanwhile, it replaces the subjective criterion of malicious intent with the objective standard of clearly exceeding the needs of normal production and business operations, thereby reducing the evidentiary burden on competent authorities.  Also, Article 54 elevates malicious trademark registrations to an independently punishable violation, stipulating that authorities have the option of issuing a warning and a fine of up to RMB 100,000.  This penalty may deter chancers from randomly trying their luck.  Another part of the revision strengthens the non-use cancellation mechanism to facilitate the timely removal of zombie trademarks and reduce opportunities to profit from trademark hoarding.  Finally, enhanced accountability for trademark agencies is intended to cut off the key intermediary link in the chain of malicious trademark registrations.

Zhang: This revision places greater emphasis on preliminary prevention.  For example, Article 13 provides that the trademark administration department shall strengthen the development of an information-based and intelligent public service system for trademarks.  By strengthening the obligation to register trademarks for use, the revisions will deter market entities from accumulating hundreds of trademarks without actual business premises or operations, or engaging in bad-faith registration of public symbols, or initiating mass litigation against multiple competitors.