China’s legislature yesterday passed a new trademark law to crack down on infringement and ensure a fair market for Chinese and foreign trademark holders.
After three readings over the past two years, the revised law was passed at the bimonthly session of the Standing Committee of the National People’s Congress.
The new law, which goes into effect from May 1 next year, raises the compensation ceiling for trademark infringement to 3 million yuan (about US$500,000), six times the previous limit.
The revision was based on comments from lawmakers, experts and representatives of businesses and trademark agencies from China and abroad, said Wang Qing, an official with the Legal Affairs Commission of China’s top legislature.
The law treats Chinese and foreign enterprises equally, said Xu Ruibiao, director of the Trademark Bureau under the State Administration for Industry and Commerce. “Based on the amendments, it will become easier for foreign trademark holders to protect their rights in the case of infringement,” he said.
“We have provided protection for nearly all the well-known foreign brands in China,” Xu said. “Foreign enterprises should be confident in the fairness of trademark protection in the Chinese market.”
The law adopts the principle of good faith during the registration and use of trademarks. Infringement of the trademark rights of others could result in fines about five times the sales volume resulting from illegal business.
The new law also mitigates trademark holders’ responsibility in providing proof of infringement, saying the alleged offenders shall provide their account books or other materials for investigation. Otherwise, compensation amounts could be determined according to the amounts proposed by trademark holders.
This could reduce litigation costs for trademark holders and increase the costs and penalties that infringers have to pay, said Li Shunde, an intellectual property professor with the Chinese Academy of Social Sciences.