Stephen Kho, William Leahy Article on PRC Amended Trademark Law Published by Boao Review

Boao Review, a journal focusing on Asia-Pacific economic issues, has published “Is China’s Amended Trademark Law a Law with Teeth, or a Paper Tiger?” by Akin Gump international trade partner Stephen Kho and associate William Leahy.

The article discusses the Third Revision of China’s Trademark Law, which took effect in May 2014 and provides “foreign companies combating trademark squatters in China with potentially valuable new protections.”

The authors note that, while the Amended Trademark Law attempts to deter those who file trademark applications for another party’s mark, the “true value of the Amended Trademark Law will, however, only be revealed by the manner in which it is implemented.” To combat growing sophistication among trademark squatters—some of whom are current or former trademark agents—“China’s courts must aspire to greater consistency and transparency, particularly when dealing with squatters’ multiple registrations.”

Kho and Leahy write that China’s first-to-file system, its failure to require evidence of prior use or ownership and its single-class trademark application requirement, which means that companies must file in 45 different trademark classes, each of which has multiple subcategories, all leave room for squatters to exploit any oversights by companies.

The negative impact that trademark squatting and China’s weak trademark system have had on multinational corporations, including megabrands such as Apple, has “been a longstanding point of concern in the U.S.-China bilateral relationship.”

“One of the most significant changes within the Amended Trademark Law,” the authors note, “is the addition of a good faith filing requirement…which has been described by some legal commentators as a catch-all provision providing parties with a mechanism for guarding against bad faith registrations that have yet to be stopped by other measures under existing law.” The amended law also “addresses the disturbing trend of Chinese trademark agents abusing their positions and filing bad faith marks” and “contains other provisions that would benefit legitimate trademark holders in protecting them against squatters,” such as a single application for multiple classes.

They conclude by noting that, despite public expressions of concern by Chinese judicial officials, “inconsistency among the administrative and judicial bodies with jurisdiction over trademark disputes has stifled such efforts thus far…Only through consistency, stability and predictability in the decision-making and enforcement of trademarks by all of the Chinese adjudicatory bodies will the Amended Law prove to have real teeth.”

To read the full article, please click here.