Introduction

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

Bad Faith Application

In China’s trademark laws, a trademark application is considered made in bad faith if the applicant knows that there is a priority rights holder or has an ulterior motive for registering the mark. Bad faith registration is different from trademark squatting. Trademark squatting covers fewer activities than bad faith applications; in particular, trademark hoarding does not fall under trademark squatting. There are a variety of bad faith intentions behind these kinds of practices. For example, in a trademark squatting case, subjective bad faith may be based on tapping into brand equity or for the purpose of extorting the brand. The China Trademarks Act has provisions addressing bad faith applications.

A bad faith application will be rejected by the trademark office if the examiner finds there is no intent to actually use the mark. Following initial approval and listing in the Trademark Gazette, a party may file an opposition with the trademark office. If successful, this opposition results in the rejection of the bad faith application.

The trademark office is required to revoke any trademarks following a reexamination trial upon the identification of a bad faith application, after which it will issue public notices of the trademark trial rulings that invalidate trademarks based on findings of bad faith application. The trademark office will also issue public notice of trademarks found invalidated due to any bad faith reasons.

Consuming Public

In Chinese trademark law, the consuming public refers to either the consumers who purchase the goods or the workers who distribute or provide services related to those goods. The standards for determining famous trademarks provide that a trademark is famous if it is renowned among the consuming public and enjoys a strong reputation in China. The consuming public has a broad definition, including both consumers and workers who facilitate that consumption, such as distributors and customer service workers. For example, car parts sold by a third-party brand that car owners may not be aware of but are used by service technicians during routine maintenance and repairs.

The consuming public therefore includes the following categories of people:

People who produce the goods or provide the services.

Consumers who purchase those goods or services.

Distribution channel workers for the goods or services.

Comparison to Other Jurisdictions

The “general public” in China matches what is referred to as the “general public” in the United States. However, China goes further by dividing the public between specialists and laypersons, using this distinction as an element within the infringement determination and applying categorical reasoning using these categories. This approach is inherited from European legal philosophy, which is deeply indebted to Kant’s categorical imperative. China’s semantic structure derives from the French concept of “public pertinent,” which divides society into “public général” and “public spécialisé. ”

When protecting famous marks, United States law uses the passive voice instead of a reference to the public, prohibiting marks that would “be likely to result in confusion, mistake, or deception.” Unlike the categorical approach used in the EU and China, United States courts apply a multi-factor test and do not divide the general public into specialists and laypersons Chinese law does. The multi-factor test approach draws on the consequentialist tradition of Jeremy Bentham’s legal philosophy and provides judges with more discretion.

Hong Kong uses a different term from Mainland China to refer to the concept of the general public, one inherited from English tradition. In UK law, a similarly vague reference is made to “the public” without categorical analysis.

Translation Errors & False Friends

There is another American English term that is a false friend of this Chinese term, the “relevant public,” which in US federal law and similar state statutes refers to “the actual or potential purchasers of the particular goods or services in the marketplace” (Magic Wand v. RDB, 940 F.2d at 640). US federal courts apply the traditional purchaser understanding test in making this determination and refer to the public under this test as the “purchasing public.” Chinese law, however, has no concept equivalent to the US “relevant public.”

Intellectual Property Rights

Chinese intellectual property law defines intellectual property rights as the product of creativity or a mark that identifies goods or services. The three main fields of intellectual property are copyrights, trademarks, and patents. China also has a concept of industry rights that encompasses patents and trademarks.

The 2021 Civil Code enumerates specific intellectual property rights unique to China, granting exclusive rights to (1) works; (2) inventions, utility patents, and exterior designs; (3) trademarks; (4) geographic indications; (5) trade secrets; (6) integrated circuit design drawings; (7) new plant cultivars; (8) any other objects provided for by law.

National Intellectual Property Administration

China’s National Intellectual Property Administration is a cabinet-level agency ranking just below a ministry. Its functions are defined by the intellectual property policy of the Chinese Communist Party’s Central Committee.

Component Agencies

(1) Treaty Law Division: Coordinates and facilitates international treaty agreements and negotiations.

(2) Strategic Planning Division: Formulates policies for intellectual property strategy with the aim of making China a major intellectual property power. Carries out predictive analysis and provides early warnings of intellectual property risks.

(3) Intellectual Property Protection Division: Responsible for establishing an effective system to protect intellectual property. It drafts the trademark and patent infringement determination standards and testing standards for enforcement actions. Provides administrative law judgment for trademark trials, patent reexaminations, and revocations. The division also provides enforcement protection for geographical indications of origin, integrated circuit designs, and exposition and Olympic games signs, as well as guidance for intellectual property disputes, assistance with infringement claims, and mediation for disputes.

(4) Intellectual Property Promotion Division: Designs policy systems to drive creativity and application of intellectual property rights. Standardizes appraisal methods for intangible intellectual property rights assets. Develops policies to govern intellectual property transactions and oversees intellectual property brokerages.

(5) International Affairs Division (and Hong Kong/Macau Office): Coordinates transnational intellectual property matters. Researches trends in the field of international intellectual property rights.

Trademark Goodwill

In China’s trademark laws, trademark goodwill means the opinion or impression a consumer has of a trademark. Trademark goodwill is mainly associated with the quality of the goods or services but can also be associated with the color, variety, packaging, and advertising.

The value of trademark goodwill is determined by its market recognition. The more recognized a trademark is, the higher its value. A determination of the trademark goodwill value is made by examining how the mark is used, how consumers perceive the mark, and the quality of the goods. Trademark goodwill is typically complemented by an assessment of the trademark’s value based on the costs invested into the trademark. Additionally, the value of a trademark can be viewed from the perspective of the mark’s brand equity value or its design value.

Trademark Infringement

Trademark infringement under Chinese trademark law refers to the unauthorized use of a registered trademark or a similar mark on the same or similar goods, or any other actions that interfere with the lawful use of a registered trademark thereby harming the interests of the trademark owner. If an infringer knows or should know that they are counterfeiting a registered trademark, the individual or entity with exclusive rights to the infringed trademark has the right to demand the infringer cease and desist the infringing activities, pay damages, and take steps to eliminate the impact of the infringing marks.

Trademark Protection

In China’s trademark law, trademark protection refers to the institutionalized practice of protecting trademarks. China has adopted an aggressive stance on protecting trademarks.

The goal of trademark protection is to ensure the law protects the exclusive rights of a registrant in their trademark, and to put others on notice that they may not use that mark or a similar mark. Violators of exclusive rights protection will be held liable at law. The general public should be able to use trademarks to distinguish between different goods and services. Additionally, consumer and business rights are fully protected.

The first step to get protection for a trademark is to register it, thus gaining exclusive rights to mark the goods or services and to license the mark to other businesses.

Chinese trademark law authorizes two methods for protecting trademarks. First, the jurisdictional business regulator or the police economic crimes unit are both lawfully empowered to investigate possible trademark counterfeiting or infringement, with either law enforcement agency able to receive and act on reports of violations. Moreover, a trademark registrant may file a lawsuit against infringers with the court of competent jurisdiction. A trademark may be registered in China for a term of ten years and renewed an unlimited number of times for a fee. However, renewals must be done within the statutory renewal term.

Trademark Trials and Appeals

Trademark trials and appeals are administrative law procedures that allow China’s Trademark Trial and Appeal Board to issue judgments in trademark disputes.

Types of Trademark Trials and Appeals

(1) Reexamination of a trademark registration application by the trademark office;

(2) Reexamination of the trademark office’s decision in an opposition;

(3) Reexamination of the trademark office’s decision to reject an application to assign a trademark;

(4) Reexamination of a trademark revocation decision by the trademark office.

(5) Reexamination of the trademark office’s decision to revoke an inappropriate trademark;

(6) Hearing of an opposition to a trademark filed by a priority rights holder;

(7) Hearing of a revocation application filed against a trademark that any organization or individual claims is inappropriate.

Trademarks Trial and Appeal Board

Chinese trademark law establishes a trademarks trial and appeal board, which applies the law to issue judgments on trademark matters. China’s Trademark Trial and Appeal Board is part of the National Intellectual Property Administration, and its role is provided in Section 2 of the Trademark Act. The Board protects the legal rights of parties by reviewing and ruling on disputes over trademark rights, making it central to trademark rights enforcement in China.

Difference Between Courts

The Board is statutorily empowered as an administrative law judge. Both the Board and trial courts follow the statutory rules of procedure when hearing cases. The Board issues judgments and notifies parties, and courts hearing trademark cases follow the same statutory procedures designed to ensure equity.

Trademark Trial and Appeal Board judgments are not binding and are not considered judicial acts, rather they are administrative law judgments subject to judicial review. In contrast, judgments in the judiciary are final.

Comparative Law

Compared with United States law, the trial and appeal board for trademarks in China has relatively greater power. This is because the trademarks statute in China affords the board with great independence, whereas Chinese law courts are treated as an administrative agency of the legislature and lack the same level of independence that US courts have.