Optimization of the trademark application and registration procedure
The past few years have seen a continuously increasing trend in trademark application and registration, with the number of trademark applications exceeding one million for two years consecutively. The annual increase of applications and the increased awareness of trademark protection in society have led to a dramatic increase of trademark review cases. SAIC statistics show that in 2012, 1,648,000 applications were accepted, more than 16.3% in the previous year, ranking China as the country with the most trademark applications in the world for the 11th year; 1,227,000 applications were examined, more than 1.8% in the previous year; 73,000 trademark opposition cases were ruled, more than 28.7% more than in the previous year; and 52,500 trademark review cases were closed, more than 50% in the previous year. By August 2013, the total trademark registration applications reached over ten million to reach 12,539,000, the total trademark registrations were 8,335,000 and the valid registrations were 6,953,000, with these numbers continuing to be No.1 in the world. (See the figure below)
The complicated procedure of trademark registration and the frequent occurrence of malicious registration and infringement have been long-standing issues in the trademark arena. Therefore, one of the essential purposes of the new revision has been to streamline the procedure and improve the efficiency of trademark ownership determination. These problems are also high on the agenda of trademark administrations.
To make it convenient for registration applicants, the new revision includes time limitations applicable to the examination of registration applications and the adjudication of related cases, provides that an applicant may apply for one trademark for more than one category, allows applications to be filed in electronic formats, and restores the examination opinion system. Moreover, it goes further to improve the trademark opposition system by restricting opposition requesters’ qualifications and grounds of opposition and by requiring the Trademark Office to decide whether to grant a trademark immediately after examination, to shorten the period of trademark registration.
It is particularly worth noting that without precedents in trademark legislation in any other country, the new revision creates and states expressly the specific periods and the longest periods applicable to trademark examination, registration, opposition, review and invalidation, to further improve the examination efficiency.
According to Yang Yexuan, a former deputy inspector of the SAIC Trademark Review Board, the pile up of trademark ownership cases is not because the trademark examination offices are less efficient, but essentially because trademark applications are seriously in excess of the need of current economic growth, and some of applications are unnecessary, sometimes referred to as “bubbles,” “wastes” or “zombies.” Thus, the fundamental solution to the administrative backlog is not to “add water” but to “take away the firewood to keep the water from boiling.” In other words, from the perspective of scientific development, what should be done is to reverse people’s erroneous ideas concerning political achievements and the value of trademarks, so that the overheated and reckless increase of trademark applications can return to the healthy level.
Clarification of the well-known mark protection system
Since its inception, the well-known mark protection system has been effective in curbing the passing off of famous brands. In its implementation, however, there have been a number of companies which take the branch for the root. Treating a well-known mark as an honorary title granted by the state, they take it as their end to file for and gain well-known mark recognition and engage in exaggerated promotions of such marks. They compete unfairly and disturb the normal order in the market. The dissimilation of the well-known mark system deviates from the original legislative intention and endangers the normal system.
The new revision clarifies the internal meaning of well-known marks by stating that a well-known mark is “a mark well-known to the relevant public.” It further prescribes that a well-known mark should be determined on a case by case and passive basis, and states who should determine well-known marks and how to do it. Particularly, Article 14(5) provides that “the phrase ‘wellknown mark’ shall not be used by any manufacturer or other business operator on any product or its package or container, or in any advertisement, exhibition or other commercial activities.” Article 53 is a penal clause that “If Article 14(5) herein is violated, correction shall be ordered and a fine of RMB 100,000 may be imposed by the relevant local industrial and commercial administration.”
These provisions are helpful to move the well-known mark system back on track in that it encourages companies to respect market rules and on that condition, and develop their own brands to truly increase their competitiveness in the market.
According to Yang Yexuan, the well-known mark, as a legal concept, is recognized to establish a system to enlarge the protection of trademarks, which is a usual practice internationally. However, the building and enhancement of this system was never intended to establish any special type of trademarks. The legislation was originally intended to provide fair protection to otherwise unregistered reputable marks and prevent unfair competitive acts such as squatting or infringement upon the reputation. The new revision re-defines the wellknown mark system and its return to rationality.
Regulation of the trademark agent sector
The past decade has seen a rapid growth of the trademark agent sector. According to statistics in the Annual Growth Report on the Trademark Strategy of China 2012, by December 31st, 2012, there was a national total of 8,719 trademark agent organizations, of which 1,662 such organizations were newly added in 2012, a new historical record high. (See the figure below)
On November 6th 2012, SAIC and the Ministry of Justice jointly issued the Measures for the Management of Law Firms Providing Trademark Agent Services that became effective on January 1st 2013. The inclusion of law firms with trademark agent services for statistical purposes led to a considerable perceived growth in the number of trademark agent organizations.
