By Jim Boyce

Lots of companies know the trauma of learning that their brand has been trademarked — some might say hijacked — in China by someone who often has no relation to the wine business and that they have little recourse — besides perhaps paying a barrel full of money to get it back — given the first registered, first served nature of the legal system. A revised trademark law, set to take effect May 1, is positioned to curtail such situations:

“The new law states that trademarks shall be registered and used in accordance with the principal of good faith,” states this “Lex Vini” wine blog post by the law firm Dickenson, Peatman & Fogarty.” More from the post:

On the one hand, distributors and manufacturers are advised to refrain from applying for a trademark identical or similar to a trademark which has been used earlier (but not yet registered) by their partners, with respect to identical goods or services. “Partnership” is interpreted in a broad way to include contractual relationships, business relationships and other relationships.

As an added boon, the amendments prohibit a trademark agent in China to handle a trademark application if it knows or should know that the client’s application is an attempt to usurp or hijack another person’s trademark or is made with intent to preemptively register, in an unfair manner, a trademark that is already in use (but not registered) by another person who enjoys a certain reputation. Moreover, trademark agencies are prohibited from registering trademarks in their own names for other services outside IP services.

Put into practice, this should provide a much better intellectual property regime in China, the world leader last year in terms of local and global patent filings, according to this post by the World Intellectual Property Organization. Of course, it doesn’t negate that the best strategy is to register your trademark as early as possible.

For more, see this summary by the National People’s Congress, this English version of the new rules as translated by Bridge IP Law Commentary, and this article, which points out some ambiguities, by Cornell International Law Journal.

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