The Korea Intellectual Property Office said Monday that a full revision of China's trademark law has passed the National People's Congress and will take effect in January. China developed the revision, which focuses on preventing the registration of bad-faith trademarks, expanding consumer protection, and improving the management and supervision system for trademark agencies, through more than three years of review and public consultation.
Under the revision, registering trademarks to preemptively seize others' marks in China will become more difficult. Applications that imitate or preempt marks with knowledge that they belong to others may draw a warning along with a fine of up to 100,000 yuan (about 22 million won). The law explicitly lists as grounds for rejection the practice of filing large volumes of trademark applications that significantly exceed normal business needs, without any intention to use them. Based on this provision, Korean companies whose trademarks have been maliciously preempted in China are expected to be able to file oppositions and invalidation trials.
Consumer protection was also expanded. Using a trademark to exaggerate or falsely represent a product's performance or origin in a way that misleads consumers will be deemed illegal, drawing a corrective order along with a fine of up to five times the profit gained from the violation (up to 250,000 yuan, about 55 million won). Registration may be canceled if the violation is severe. Korean companies need to be cautious about exaggerated or potentially misleading expressions in advertising and labeling within China.
The management and supervision system for the trademark agency business was also revamped. The revision clarifies the reporting obligations of trademark agencies and strengthens the oversight authority of supervisory bodies to block assistance for bad-faith applications and unfair practices in the agency market. This helps Korean companies reduce the risk of damage from negligent or bad-faith agency services when using Chinese trademark agencies, and to proceed with applications and management in a trustworthy environment.
"As the system has shifted to a 'use-centered' approach, our companies also need to systematically manage evidence of trademark use in China (sales, advertising, distribution data, and the like) on a regular basis," said Kim Yong-sun, Commissioner of the Korea Intellectual Property Office. "The Korea Intellectual Property Office will closely analyze the revised content and actively help our companies secure and protect their trademark rights stably in the Chinese market through overseas intellectual property centers (IP centers) and other channels."
