Foreign Trademark Application
Recent Changes to Trademark Law in China
It has long been a complaint of companies doing business, or wanting to do business, in China that Chinese trademark law does not do enough to protect the rights of brand owners.
Legislative amendments were recently passed in China that are intended to strengthen protection for brand owners, discourage trademark infringement and unfair competition, extend protection to non-traditional marks, and streamline registration and opposition processes.
Highlights of the changes that will come into effect on May 1, 2014, are as follows:
1) Harsher Penalties for Infringers
Infringers will face increased fines based on revenue from the illegal use of a trademark. Repeat infringers will face heavier fines.
Maximum statutory damages have also been increased from 500,000 yuan (approximately C$84,000) to 3,000,000 yuan (approximately C$500,000). The maximum compensation can be tripled if it is determined that the infringement was committed in bad faith. The definition of “bad faith” must still be clarified.
Another welcome change is that infringing companies can be forced to disclose sales records for the assessment of damages. If the infringer refuses, damages can be awarded based on the claims of the trademark owner.
2) Good Faith Provisions
The new law contains a provision that trademark applications must be used and registered in good faith.
The amendments provide a means for trademark owners to oppose the registration of identical or similar marks by distributors, manufacturers, or others with whom they have a prior relationship.
The new law also places obligations on trademark agents to act in good faith, e.g. by not handling a trademark application when the agent is aware that the client is acting in bad faith or infringing another party’s rights.
3) Multiclass applications are permitted
Applicants will no longer need to file separate applications for each international class of goods and services. We are hopeful that this will mean reduced costs for our clients who have goods and services in a variety of classes.
4) Trademark Examination Timelines
Timelines have been set out to shorten the registration process. Under the new law, the timeline for the initial examination of an application is nine months.
5) More Limited Right to Oppose
Oppositions based on relative grounds, including confusion with a prior right, may only be filed by the owner of the pre-existing right or an interested party. Prior to the changes, anyone could oppose on relative grounds.
6) Removal of the Opponent’s Right to Appeal Registration
If the opposition is decided in favour of the applicant, the mark will proceed directly to registration with no opportunity for the opponent to appeal. The opponent may file an invalidation action post-registration. However, the opponent would be at risk of infringing the applicant’s trademark until a decision to invalidate the registration is rendered.
This change was presumably meant to restrict vexatious oppositions, but has been criticized for ostensibly favouring bad faith applicants. As a result of this change, opponents will need to place greater emphasis on putting their best case forward at the opposition stage.
7) Registration of Sound Marks
Under the new law, sound marks are now eligible for registration.
8) Well-known Trademarks
The amendments clarify how and when a trademark will be recognized by authorities as a well-known trademark and prohibits the use of the term “well-known trademark” on products, packaging and advertising.
Overall, the changes appear to move China’s trademark law in the right direction, although the full impact of the law will depend on how it is applied in practice.
Proper Trademark Usage – Part 1
Marking: What Those Symbols Mean and When to Use Them
Trademark marking refers to the use of symbols or other designations to indicate trademark rights. We have all seen symbols such as ™ and ® on products and advertising, but what is not always clear is the distinctions between them, and when they should and should not be used.
1) Types of Designations
The following are examples of symbols often seen in Canada:
|MC||Marque de commerce|
- TM (Trademark)
May refer to a registered or unregistered trademark, whether or not an application has been filed.
- MC (Marque de commerce)
French language equivalent of the ™ symbol. Commonly used in Québec. May refer to a registered or unregistered trademark, whether or not an application has been filed.
For packaging and advertising that is used in English and French speaking markets, it is not uncommon to see both English and French symbols, e.g. ABCTM/MC
- SM (Service Mark)
More common in the United States. May refer to a registered or unregistered trademark used with services, whether or not an application has been filed.
- ® (Registered Trademark)
Should only be used after a mark has registered, and only in relation to goods and services covered by the registration.
- MD (Marque Déposée)
French language equivalent of the ® symbol. Commonly used in Québec. Should only be used after a mark has registered, and only in relation to goods and services covered by the registration.
The above symbols should appear immediately following the trademark. Trademark rights can also be designated in footnotes or ownership legends, e.g.
ABC is a registered trademark of ABC Inc.
This is often preferred when the above symbols would be considered cumbersome or aesthetically displeasing.
2) What are the Canadian Requirements With Respect to Trademark Marking?
Simply put, the use of trademark symbols is not compulsory in Canada. The Trade-marks Act does not contain any requirements with respect to trademark marking. There is currently no legal obligation to use the above symbols, nor any legal repercussions for misusing them in Canada. That said, the above-mentioned trademark symbols are widely recognized in practice in Canada, and making proper use of them is advisable, for the reasons stated below.
3) Purpose of Trademark Marking
• Alerts the public to your trademark rights – puts third parties who may be considering adopting the same or similar marks on notice. In addition to serving as a deterrent to potential infringers, this public notice will, in some countries, entitle the mark owner to additional remedies in litigation.
• Shows that mark is not being used generically
• Set trademark content apart from surrounding text or graphic elements – This is useful when a mark is used in close proximity to other elements, to clearly identify the subject matter covered by a trademark.
4) International Considerations
Although Canada has no marking requirements, brand owners who do business in other countries need to be aware that marking laws will vary by country.
Some countries require that trademarks be properly identified as registered in order to be entitled to certain legal remedies. For example, in the United States, failure to give notice of the registered status of a trademark may limit the ability to recover damages and profits in an infringement suit.
Further, in some countries, false or misleading marking can result in claims of unfair competition, fines, and even imprisonment.
In the United States, improper use of the federal registration symbol ® that is deliberate and intended to deceive or mislead the public is fraud (TMEP §906.04). Thus, if a business is using the same marketing collateral in both Canada and the United States, but only has a trademark registered in Canada, the safest approach is to use the ™ symbol until such time as the mark has registered in the United States.
Although the ® is commonly used around the world, other symbols may be more appropriate in certain regions. For example, M.R. (“Marca Registrada”) is used in many Spanish and Portuguese speaking nations.
Because of these international differences, advertising and packaging may need to be customized to comply with local marking requirements. Since websites may be accessed from anywhere in the world, it may be advisable to have regional websites with a marking strategy tailored for each country.
It is best to consult with your Trademark Agent if you have questions concerning marking requirements in specific countries.
Case Law Update: Foreign Use & Registration Claims in Canadian Trademark Applications
In Canada, applicants may rely on one or more bases when filing a trademark application, including use in Canada, proposed use in Canada, and foreign application/registration and use. The latter basis permits foreign applicants who own a corresponding registration in their country of origin and who have used the trademark in any foreign country to obtain a registration in Canada without having used the trademark in Canada. The material date for establishing use abroad has been a source of debate amongst trademark practitioners, and was recently addressed by the Federal Court in The Thymes, LLC v. Reitmans (Canada) Limited, 2013 FC 127.
Before addressing the court’s decision, it may be helpful to review the relevant legislation.
Section 16(2) of the Trade-marks Act reads as follows:
(2) Any applicant who has filed an application in accordance with section 30 for registration of a trade-mark that is registrable and that the applicant or the applicant’s predecessor in title has duly registered in or for the country of origin of the applicant and has used in association with wares or services is entitled, subject to section 38, to secure its registration in respect of the wares or services in association with which it is registered in that country and has been used, unless at the date of filing of the application in accordance with section 30 it was confusing with
(a) a trade-mark that had been previously used in Canada or made known in Canada by any other person;
(b) a trade-mark in respect of which an application for registration had been previously filed in Canada by any other person; or
(c) a trade-name that had been previously used in Canada by any other person.
Section 30 of the Act reads as follows:
30. An applicant for the registration of a trade-mark shall file with the Registrar an application containing
(d) in the case of a trade-mark that is the subject in or for another country of the Union of a registration or an application for registration by the applicant or the applicant’s named predecessor in title on which the applicant bases the applicant’s right to registration, particulars of the application or registration and, if the trade-mark has neither been used in Canada nor made known in Canada, the name of a country in which the trade-mark has been used by the applicant or the applicant’s named predecessor in title, if any, in association with each of the general classes of wares or services described in the application;
In Thymes, the applicant filed an application in Canada claiming a) proposed use and b) use and application in the United States. The Federal Court upheld the decision of the Opposition Board to reject the second filing basis, as the applicant was unable to establish use in the United States as of the Canadian filing date.
In explaining the Court’s decision, Justice Manson noted that “the material date for determining compliance with section 30 of the Act is the date the application was filed” and stated the following in reference to Section 16(2) of the Act:
“There is no doubt a proper reading of that section requires that, at the time of filing the application, if an applicant relies on registration or application and use abroad pursuant to that section, there must have been use of the trade-mark at the time of the application to rely on this section as a valid basis to obtain registration in Canada.”
He went on to say that “further, the last portion of section 16(2) of the Act, namely: ‘unless at the date of filing of the application in accordance with section 30’, also supports the view that both section 16 and section 30 requirements must exist and be reviewed as at the date of filing the application.”
It is difficult to argue with the decision as it relates to the particular facts of this case – in Thymes, the 16(2) claim was made before there had been any use of the mark in the US. What is notable is the breadth of the language used by Justice Manson, as it may be interpreted to mean that use as of the Canadian filing date is required for a valid 16(2) claim, regardless of when the claim is made.
It has been common practice for many Canadian trademark practitioners to amend applications after filing to make a claim under 16(2) in situations where foreign use commences after filing but before advertisement. In that case, the applicant can credibly claim foreign use and application/registration prior to the filing date of the revised application. The Federal Court’s decision casts doubt on whether such claims will hold up in an opposition proceeding.
At Coastal, it has long been our practice to only rely on use and registration abroad when the following conditions are met at the filing date of the Canadian application (or priority date, if applicable):
i) a corresponding application or registration exists in the applicant’s country of origin, and
ii) the applicant has used the mark with the wares and/or services in any country.
At least until the scope of the Thymes decision is tested, a cautious approach will help safeguard clients’ applications and registrations from opposition or cancellation for invalid 16(2) claims.