Introduction

This page has a glossary of concepts for Chinese law in the trademark rights topic. You can find a general overview of China trademark law at CBL’s .

General Rights

Exclusive Rights in a Trademark

In China’s trademark laws, the exclusive rights in a trademark refer to the legal rights granted to a trademark owner, preventing others from using the same mark on their own goods or services. The trademark system is a key part of the socialist market economy. Chinese historians point out that the country has used branding since ancient times, which shows the close connection between trademarks and economic progress.

However, significant developments in Chinese trademark law started in the 1980s. The evolution of the socialist market economy policy made exclusive rights protection for trademarks indispensable. Trademarks are now a well-recognized form of intellectual property by the public in China. In recent decades, China has implemented a legal system and administration for enforcing trademark rights.

Legal Aspects

Chinese legal theorists believe that rapid regulatory protection is more efficient than litigation for protecting exclusive rights. Regulatory enforcement of exclusive rights is currently about 90% of the trademark office’s caseload. Rapid regulatory enforcement is typically achieved by issuing a cease and desist order to the infringer. Administrative agencies can reach decisions much faster than the courts, even for difficult questions that require escalating issues.

Administrative agencies have a wide range of techniques at their disposal to take enforcement action against suspected infringements, including questioning, reviews, investigation, and injunctive orders. They also have a variety of penalties available to them, including injunctions, seizures, and destruction of infringing marks and the goods bearing these marks, in addition to fines. The administrative agency can also order the infringer to pay damages if requested by a party.

Business regulators are authorized to regulate how trademarks are used and may take enforcement action if they believe there may be infringement. The owner of the trademark exclusive rights or ordinary consumers who discover infringement may file a complaint with the local business regulator’s office.

Registered Trademark

A registered trademark in China’s trademark laws is a trademark that the trademark office has legally approved for registration. Trademark registration is governed by complex regulations.

In China, trademark registration provides the registrant with exclusive rights to the trademark, allowing them to prevent other businesses from using the same or similar mark on the same or similar goods or services. Trademark registration is the principal way to obtain trademark rights in China; attempting to acquire a trademark solely through use is often an extremely costly mistake.

Similar Goods

The concept of similar goods is central to Chinese trademark law, yet there is no explicit statutory definition for it. The judicial interpretation of similar goods includes–but is not limited to–anything that is similar or related in terms of use, industry sector, sales channel, or target market. These are goods that have a connection and could easily mislead consumers.

Chinese regulators have established a list of classified goods and services based on a combination of the international Nice Classification system and local customs. This list is the main reference for local trademark professionals when determining the existence of similar goods or services, however, it is not used in isolation; rather, trademark laws require making a similar goods and services determination based on a multi-factor test. This specific test weighs similarities and differences in features, usage, transaction method, type of service, where service is provided, and to whom the service is provided.

Famous Mark

In China’s trademark law covering dilution principles, a famous mark is one that is well-known among the consuming public in China. China has a broad definition of the consuming public, which includes both the consumers themselves and the workers involved in distributing or providing services to consumers. Famous marks are different from ordinary trademarks in that they are offered protection across multiple classes of goods and services.

Determination of Famous Mark Status

Determinations are made on a case-by-case basis whenever the holder of a famous mark alleges infringement under the Trademark Act and based on the individual facts of the case.

Passive protection is where the trademark office does not take action of its own accord, but rather waits until it receives a complaint in a dispute before making a determination as to famous mark status according to the parties’ requests.

As-needed determinations are made in response to a request by the famous mark’s owner during a case for protection or dispute resolution, which does not constitute an administrative action.

Comparison to Renown Marks

China has a separate distinction for brands that have recognition only in local provinces. Designating a mark as renown is used primarily as an honor bestowed on businesses in provinces and home-rule cities, as well as by local governments to improve the competitiveness of trusted brands.

Comparative Law

The Chinese concept of a famous mark was introduced through 19th-century Chinese legal scholars’ research into European law. Currently, marks in China must be extremely famous to qualify for protection.

North America’s trademark term “famous mark” is known as a “well-known trademark” in the United Kingdom and European English. German trademarks scholar Annette Kur has famously noted that the American concept of the famous trademark was directly copied from German jurisprudence by Harvard Law professor Frank Schechter, by way of reference to the Swiss “Odol” case in his influential 1927 article “The Rational Basis of Trademark Protection.” As NYU Law’s Professor Barton Beebe has noted, the article “implied that dilution was a home-grown American idea – Indeed, that it was Schechter’s own,” even though jurisprudentially and functionally, it was a German invention, not American.

The word “famous” as used in the US Trademark Act does not mean what “famous” typically means in English. Instead, it means that the mark is well-known, without requiring the positive connotations famousness requires.

https://www.cambridge.org/core/books/abs/transition-and-coherence-in-intellectual-property-law/german-misappropriation-origins-of- trademark-antidilution-doctrine-a-translation-of-the-1924-odol-opinion-of-the-elberfeld-landgericht/

License Contract

In Chinese intellectual property law, a License Contract is used to grant another party the right to share in its own exclusive rights to intangible property or the right to produce and sell products. License Contracts, often titled License Agreements are the main way by which technology is sold.

The parties to a license contract are the Licensor and the Licensee. There are three different types of contractual objects in a Chinese License Agreement, which can be a : patented technology, copyright, or trademark. Trademarks and patents in China are considered industrial property, which are exclusive technologies comprising intangible property not disclosed to the public at large.

There are several types of licenses that can be granted in a license contract: (1) A sole license, where only the Licensee is permitted to carry on the production, usage, and sale of the licensed object within the designated region. Third parties and licensors will not have any of these rights. (2) An exclusive license, where the licensee is permitted to produce, use, and sell the licensed object within a designated region, where no third party has such rights. (3) A non-exclusive license, where rights are granted to a third party, but the licensor still retains these rights.

Additional license contract options are available to control whether the technology can be given to a third party: (1) In an assignable license contract, the licensee is entitled to assign its rights under the contract to a third party in the designated region, constituting a non-exclusive license contract. (2) Under a non-assignable license contract, the licensee does not have the right to assign its rights in the technology to a third party. Furthermore, swap contracts are often used in China, involving the exchange of technology between parties without payment.

Priority Rights

In Chinese financial and intellectual property law, priority rights are granted to give superior rights against other parties. Priority rights do not exist independently, rather they combine with and enhance other rights. Although they resemble property rights, priority rights differ significantly from classic security interests, such as mortgages and pledges. Given their difference from typical creditor rights and security interests, Chinese law considers priority rights a quasi-security interest.

Trademarks

The principles of priority rights in Chinese law originate in intellectual property. The 1883 Paris Convention on Intellectual Property sought to improve international intellectual property administration. Under this convention, priority rights allowed a filer in one state who later filed in another state to use the initial application’s filing date in subsequent international filings. Thus, subsequent applications filed over the same matters would enjoy priority over competing applications filed after the initial filing date. This concept of priority rights has since been incorporated into Chinese civil law.

Debtor-Creditor

Under the Civil Code, a creditor who obtains a mortgage on property to secure a loan has the right to payment priority if the debtor defaults on the loan or under other events of default. This constitutes a typical financial priority right. A debtor in default on maturing debt or other events of default may reach an agreement with the creditor to provide priority payments from mortgage or sale of the property, which provides superior rights over other creditors.

Priority Rights Holder

A priority rights holder whose rights have been infringed under Chinese financial and intellectual property law is, in principle, entitled to damages to place them in the same position they were in prior to the infringement. This can be achieved in two ways.

One route is through property rights, restoring the priority right holder’s interest by voiding or revoking the interest of a subsequent holder. Another route is through damages, which requires paying compensation as restitution for harm suffered by the priority right holder. Judges in China typically use the property rights method and only award damages in exceptional cases.

Trademark Owner

In China’s trademark laws, the trademark owner is the person who has successfully filed an application to register a trademark.

Trademark Symbol

China’s trademark laws define a trademark symbol as a medium that conveys a trademark but is independent of the goods being marked. Trademark symbols are widely seen on everything from bottle labels and bicycle logos to clothing and other consumer goods.

The regulatory procedures for trademarks also define trademark symbols as any tangible medium containing a trademark that is placed together with goods into the stream of commerce, regardless of whether the trademark has been registered.

Types of Marks

Collective Marks

See full article here.

Color Combination

Chinese trademark law defines a color combination as a trademark comprised of two or more colors. Specifically, the two or more colors making up a color mark will have specific proportions and a definite ordering.

The fundamental element of a color combination in China is nonetheless the colors themselves. Color combinations were only recently added as a registerable category under the China Trademark Act. Chinese trademark policy thinking now recognizes that unique and innovative color combinations have an aesthetic appeal and the required distinctiveness needed to help the consuming public identify the source of who provides the goods or services. A color combination need not have a definite shape, rather it is expected to meld with the goods and services it signifies.

Distinctiveness

Chinese trademark law defines distinctiveness as any property of a trademark that indicates the origin of the goods and distinguishes it from the goods and services offered by other businesses. China’s laws consider distinctiveness to be the spirit of the trademark law and the central cog essential to the functioning of the trademark system.

Trademark distinctiveness has a close connection to the goods and services it represents. Distinctiveness cannot be considered in the abstract but must instead take the goods and services offered into consideration. The idea behind a logo and the signified goods and services must have a direct connection, not a weak or indirect one. The determination of whether a trademark is distinctive is based on the perspective of the consuming public in the relevant market, and not the personal opinion of the trademark examiner or judge. A mark is considered distinctive if the average consumer making ordinary purchases would recognize it as a trademark since an average consumer typically sees the trademark as a whole and does not focus on the small details. They are reasonably knowledgeable about what they are purchasing and are as careful as reasonably expected for that kind of good or service. A trademark is part of the private market economy, and therefore the context within which a trademark appears determines everything.

Jointly Owned Trademark

See full article here.

Service Mark

A service mark in China’s trademark laws is used by service providers and independent contractors to distinguish the services they provide from those of others. Like a trademark for goods, a service mark can be comprised of text, images, letters, numbers, three-dimensional marks, sounds, and color combinations. Sole and exclusive rights to the mark are granted when a business registers a service mark. Service marks are substantially similar to trademarks for goods, with the only difference being that they are used for services rather than goods. In this context, services refer to what is provided by the service sector of the economy.

Sound Mark

See full article here.

Three-Dimensional Mark

See full article here.

Trade Mark

In China’s trademark laws, a trade mark is a kind of trademark used to mark goods. A trade mark can be a combination of text or images, and registered so long as it is distinctive and not immortal, prohibited, or offensive.

Fee Schedule

Registering a trade mark requires a fee of ¥1000 CNY, which covers 10 classified goods and services. Each additional classified good or service requires an additional fee of ¥100 CNY, and the trademark office will deduct fees from a trademark agent’s prepaid account.