Doing Business with China

Legislation

Legislation relevant to the protection of well-known trademarks in the PRC includes:

• Paris Convention for the Protection of Industrial Property (the Paris Convention) 14 July 1967;

• Agreement on Trade- related Aspects of Intellectual Property Rights (the TRIPS Agreement) 15 April 1994;

• Recognition and Administration of Well-known Trademarks Tentative Provisions (the Tentative Provisions) 14 August 1996;

• Trademark Office of the SAIC, Several Questions Concerning Applications for the Recognition of Well-known Trademarks Circular (the Circular) 28 April 2000;

• PRC Trademark Law, 2nd Revision (the Trademark Law), 1 December 2001; and

• Regulation for the Implementation of the PRC Trademark Law (the Implementing Regulations), 15 September 2002.

Defined

Well-known trademarks are trademarks that enjoy a high reputation and are known through long- term use and which, due to their general recognition and reputation, cause the public to associate them immediately with certain commodities or services. Although not clearly defined under PRC law, the following factors are considered when well-known status is granted to a trademark:

• the trademark's degree of recognition among the relevant public;

• the length of continuous use of the trademark;

• the continuous length, degree and geographical scope of the publicity for the trademark;

• the record of protection of the trademark as a well- known trademark; and

• other factors associated with the trademark's being well-known.

Background

The concept of well-known trademarks originated under the Paris Convention. Article 6bis of the Paris Convention protects well-known trademarks, but the scope of protection is confined to the registration and use of trademarks identical with or similar to another person's well-known trademark for identical or similar goods. Under Article 16 of the TRIPS Agreement, however, protection of well-known trademarks includes the trademarks for goods or services of different classes from those for which an identical or similar trademark is used. China is a member of the Paris Convention, a signatory to the TRIPS Agreement, and now, a WTO member.

Under its WTO commitments, China must fully comply with the TRIPS Agreement standards for well- known trademarks. China's amendment of its Trademark Law is one way that it is trying to comply with its WTO commitments with respect to the TRIPS Agreement. Examples of such changes include stronger guidelines for authentication of a well-known trademark and judicial review of trademark office decisions.

Authentication under the revised Trademark Law Before it was revised in 2001 the Trademark Law did not directly protect well-known trademarks. Instead, the Tentative Provisions protected well-known trademarks. Under the Tentative Provisions, authentication and protection of well-known trademarks were difficult to achieve and decisions, which were the exclusive domain of the Trademark Review and Adjudication Board, were not subject to review. In its WTO negotiations China promised to amend those parts of the Trademark Law that were not TRIPS Agreement compliant.

The revised Trademark Law provides that any mark that copies, imitates or translates a third party's well- known trademark covering identical or similar goods or services will not be registered, regardless of whether the well-known mark is registered in China. With respect to different and unrelated goods and services, the trademark will only be prohibited from use or registration if it is a copy, imitation or translation of a well-known registered mark in China.

Judicial review Perhaps the most noteworthy change in the amended Trademark Law is the transfer of the power of final adjudication from administrative departments to judicial departments. In China, trademark rights established by the Trademark Review and Adjudication Board under the SAIC had always been final and the parties could not request judicial review. The amended Trademark Law rescinds the power of final adjudication of the Trademark Review and Adjudication Board and allows the parties to initiate legal proceedings at the people's court .

Scope of protection

The scope of protection of well-known trademarks is generally broader than that of ordinary trademarks because unauthorized usage may cause the public to mistake the ownership or origin of the goods or services, thereby impairing the well-known trademark owner's rights and interests. While the owners of ordinary registered trademarks may prohibit others from using trademarks that are identical with or similar to their registered trademark for identical or similar goods registered in the same class, the owners of well-known trademarks registered in the PRC may block a third party's use of the same mark for goods or services in different classes. Well-known trademarks that have not been registered in the PRC are eligible for protection against unauthorized use on similar products. This underscores a gap between PRC legislation and the Paris Convention in that, under the Paris Convention, well- known trademarks include registered and unregistered trademarks, so long as the unregistered trademarks are well-known. Under the PRC Trademark Law, however, if a well-known trademark is not registered in the PRC, it will only receive protection for the same class of goods or services.

Obtaining well-known status

Under the Implementing Regulations well-known status may be obtained in two ways:

• First, if a dispute arises during a trademark registration or appraisal, and any party believes its trademark is well-known, such party may ask the Trademark Office or Review and Adjudication Board to recognize it as well-known and to reject or cancel any other trademark registrations or applications that violate Article 13 of the Trademark Law; or

• Second, if a party requests the SAIC to prohibit the use of a trademark that it considers well-known (as provided under Article 13 of the Trademark Law), the party must first prove such claim by applying for well-known status for the trademark at the Trademark Office. The Trademark Office will review the application in accordance with Article 14 of the Trademark Law and determine whether such trademark qualifies as well-known.

Alternatively, the PRC courts have also determined that certain foreign-owned trademarks are well-known, and therefore subject to protection in accordance with the Trademark Law.