Global Trademark Law Update: China And Canada

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Global brand owners must keep abreast of developments in trademark law and practice in countries and regions throughout the world. International agreements, such as the Madrid Protocol and Paris Convention, aim to harmonize trademark laws globally among their signatories, but marked and meaningful variations remain, and change is constant. China has recently implemented new policies that will significantly impact trademark prosecution and enforcement, and Canada has proposed broad changes to its own trademark laws.

Major Legislative Changes Enacted in China

China’s new trademark law went into effect on May 1, 2014, after more than ten years of debate. The new law aims to make registration more efficient and comprehensive, and to prevent bad-faith registration and piracy. The law also radically alters China’s prosecution, opposition and dispute procedures, by imposing new timelines for review and placing limitations on stakeholders’ ability to oppose applications and appeal decisions. These and other changes are already having an effect on trademark filing strategies in China.

Changes to Trademark Filing Requirements

The recent amendments to PRC’s Trade Mark Law made several changes as to the filing process and the nature of trademark applications in China. E-filing has been possible since 2009, but was not included in China’s statute. Article 22 of the amended trademark law codifies the ability to file trademark applications online.

Significantly, Article 22 also permits applicants to file trademark applications in multiple international classes. Until now, applicants seeking protection in more than one international class had to file separate applications for each class with the China Trade Mark Office (CMTO). Now, a single application can include multiple international classes. Further, sound marks may now be registered. Prior to this amendment, the CTMO would only register “visually perceptible signs,” such as words, devices, letters, numerals, three-dimensional signs, and color combinations. Protection is still not extended to moving images, scents, and single colors.

The amended law also imposes a good faith requirement: all applications must be made in good faith. However, the actual impact of the good faith requirement remains unclear, as lack of good faith is not currently listed as a basis for opposition or invalidation.

Changes Impacting Trademark Prosecution

Some of the most talked-about changes in the PRC Trade Mark Law are related to opposition, cancellation, and invalidation procedures. Under the new law, only rights holders and their licensees may oppose a third-party applicant based on likelihood of confusion (“relative grounds”). Any party may still oppose an application that is descriptive and/or immoral (“absolute grounds”) Additionally, rights holders are no longer permitted to appeal an adverse decision by the CMTO in an opposition proceeding. If a registrant opposes a third-party’s application and does not prevail, the registrant’s only option is to wait until the application proceeds to registration, and then file an action for invalidation. Applicants, however, retain the right to appeal a CMTO finding against them to the TRAB. From a practical standpoint, this change dramatically increases the import of providing evidence at the opposition stage. Registrants will have one chance to oppose a problematic application, so it is critical to gather relevant evidence and present a strong initial case to the CMTO.

Statutory Time Limits for Trademark Proceedings

Under China’s earlier trademark system, even an unopposed application often took upwards of 18 months to proceed to registration. The amended law provides the following time limitations for CMTO and TRAB proceedings:

Proceeding

Authority

Time Limit

Extension

Application - initial examination

CTMO

9 months

n/a

Review of CTMO refusal

TRAB

9 months

3 months

Opposition

CMTO

12 months

6 months

Review of CTMO opposition finding (applicant only)

TRAB

12 months

6 months

Invalidation (absolute grounds)

CTMO

9 months

3 months

Review of CTMO invalidation decision (absolute grounds)

TRAB

9 months

3 months

Invalidation (relative grounds)

TRAB

12 months

6 months

Cancellation

CTMO

9 months

3 months

Review of CTMO cancellation decision

TRAB

9 months

3 months

These time limits should streamline the application and prosecution process, and ensure that applications, reviews, and proceedings to oppose, invalidate, or cancel a mark are handled in a timely manner.

Anti-Infringement Efforts

China’s amended trademark law includes an expansion of the definition of infringement, and increases the maximum statutory damages for trademark infringement. PRC’s Trade Mark Law now includes the intentional facilitation of trademark infringement within its definition of infringement, opening the door for claims of indirect and secondary infringement. Further, the law provides for statutory damages up to RMB 3,000,000 (approximately $480,000), and introduces punitive damages in cases of intentional infringement.

The practical effects of the amendments to China’s trademark law will become more evident in the coming months as proceedings are brought in the CMTO, TRAB, and China’s court system. The ultimate impact of these changes has yet to be seen.

Proposed Amendments to Canada’s Trade-marks Act

This spring, the Canadian government proposed several significant changes to its trademark law, the Trade-marks Act, which are currently under review. The most dramatic policy shift proposed is the abandonment of use requirements. This change would harmonize Canada’s trademark policy with that of the European Union and many other countries, where use of a trademark is not a requirement for registration. Additionally, the proposed law would put an end to Canada’s unique trademark classification system; Canada would officially adopt the Nice Agreement classification system, which is used worldwide, including in the EU and the United States. While this would put Canada in line with international classification practices, this change may increase costs for applicants seeking to register their marks in multiple classes.

The bill further proposes shortening the length of registration terms from fifteen years to ten. Additional changes include granting the Trademark Office the authority to cancel registrations for non-use, harmonizing with international treaties including the Madrid Protocol, and broadening the scope of registrable marks to now include sound, scent, texture, and taste. The most immediately obvious change would be to the title of Canada’s trademark law itself, replacing the Canadian spelling “Trade-marks Act” with the more universal “Trademarks Act.”

In Canada, the proposed statutory changes will likely undergo significant modifications as they pass through Canada’s legislative bodies, the House of Commons and the Senate.

Impact of New Legislation

It is essential to regularly consult with trademark counsel to develop and revise global trademark strategies in light of the constantly-changing statutory landscape. In today’s global market, policies that adapt to and take advantage of such changes are key to securing continuous, effective trademark protection.

 

Topics:  Canada, China, International Trademark Protection, Madrid Protocol, Paris Convention, Popular, PRC Trademark Law Amendments, Trademarks

Published In: Civil Procedure Updates, Communications & Media Updates, Intellectual Property Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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