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INTRODUCTION

What are Trademarks? Trademark for a layman may mean simply the hallmark of a company. Ramello (2006:2) has defined trademark as a sign a logo, a name, a word, a symbol or a combination thereof -used within economic activities by a producer or vendor to identify a particular product or service. In other words, it is a 'distinctive sign' that enables offerings of goods or services to be--more or less consistently--differentiated, and consequently enables consumers to distinguish between different goods and recognise their preference. These attributes make trademark an extremely powerful economic device. The essential function or role of a Trademark is creating distinctiveness thereby enabling differentiation between brands. To sum up it can be said that a trademark is a legally- protected word or symbol that is used to identify a business entity. The primary reasons for the existence and protection of trademarks thus can be identified in the Senate committee recommendation on Lanham Act (1946 U.S.C.C.A.N: 1274) as: (1) To protect the public, by way of giving them confidence that, in purchasing a product bearing a particular trademark which it favourably knows, it will get the product which it asks for and wants to get by (2) To Protect the owner of a trademark who has spent energy, time, and money in presenting to the public the product in a particular form, thus his investment is accorded protection from its misappropriation by pirates and cheats who may try to reap benefit out of his hard work and investments.

Trademark Law in China: An overview

Following Chinas WTO member China has made significant changes in its laws and regulations in pursuance of its WTO commitments. However Chinas legislative attempts have been more than inadequate in combating the problems of counterfeiting. The reason

attributed to such ineffectuality of laws is that laws enacted or amended are strong only on papers not in their implementation (China IPR Toolkit (2008)) The Trademark Law of the Peoples Republic of China (Trademark Law) was enacted in August 1982 and came into force on March 1983. The Chinese Trademark Law can be summed in five cardinal principles: 1) Protection upon Registration: This implies that protection to the owner of a trademark is accorded only consequent registration, necessary implying that no protection is accorded in the filing stage. Thus if an owner of Trademark wishes to protect its trademark in China, he needs to have it registered in China first. The exception to this principle is the well known trademark rule whereby an a trademark that is well known as per Article 13 of the Chinese Trademark Law and the Paris Convention shall be accorded protection even if it is not registered but in a passive manner.

2) Voluntary Registration: Chinese Trademark Law does not impose any obligation on the owner of a trademark to obtain registration of its trademark in China. In order words, the use of an unregistered trademark shall not infringe any other partys rights on their registered marks in respect of similar goods.

3) Substantive examination: Under Chinese Trademark Law substantive examinations are conducted in order to determine whether a trademark should be registered or not. The substantive examination shall be conducted both on absolute and relative grounds.

4) Centralised Registration and decentralized Administration: In China, the Trademark office is the only governmental organ responsible for trademark registration, while the trademark administration is carried out by administrations for industry and commerce at all levels in their respective areas.

With the rapid economic development and the improvement of the trademark legal system, applications for trademark registration in China have soared in recent years. In 1980, applications for trademark registration were only 26,177. By the end of 2004, China had had 2,240,000 registered trademarks in total. Trademarks filed by non-residents have also kept

increasing. In 1982, only 1,565 trademark applications had been filed by foreigners. The number reached 24,565 in 1993 and 60,335 in 2004. Before 1979, there were only 5,130 trademark registrations from 20 countries and regions. By the end of 2004, there were 403,000 trademark registrations from 129 countries1 and regions, and as Wenhui (2005:4-5) notes there was almost a 79-fold increase over that in 1979, accounting for 18 per cent of the total number of registered trademarks in China. Although, China has also put great emphasis on the protection of trademark rights yet instances of violations of particularly foreign trademarks are recurrent, more so figures are alarming. According to the Trademark Annual Report of China 2004 from 2001 to 2004, local administrations for industry and commerce (hereinafter referred to as local AICs) nationwide dealt with 169,600 cases that violated trademark laws and regulations, among which 113,000 cases involved trademark infringement and counterfeiting (12,000 cases involved foreign trademarks) and 56,600 cases were other types of violations of trademark laws and regulations (Wenhui (2005:6-7)). Thus, it can be suggested that an overhaul of the Chinese Trademark Law and its Enforcement mechanism has become not only imperative but also indispensable.

Foreign Trademarks: Register or Risk

Registration of Foreign Trademark assumes vital importance in the light of first to file system of trademark registration in China unlike the first to demonstrate commercial use system of a trademark protection in the US. This difference has significant implications for companies. If a trademark is not already registered in China, it exposes the trademark to risk of squatting, meaning thereby that virtually anyone can register the mark and use it to manufacture and/or market products or services in the Chinese market. This trademark squatting is entirely legal under Chinas first-to-file system. Unless you register your trademark in China first, you could be leaving your brand vulnerable to its legal use, or misuse, in China by someone else. Trademark squatting not only arrests yours own use of your trademark in China but magnifies the chances of counterfeiting of products, sold legally under your trademark in China. Infact one of the reasons of high counterfeiting practices in

About a fifth of all registrations are of foreign origin and cover 129 countries and regions, with the United States, Japan and Germany ranked first

China can be attributed to Trademark squatting. When a Trademark of a company is subjected to such squatting it needless to say diverts a companys current and potential revenue, thus significantly damaging their brand equity. Thus registering Foreign Trademark in China before commencement of business becomes more than imperative in the interests of companys interests. Dalsgaard (2011:17) identified another problem that arises as a result of First to File system which is, when a company with a Recognized trademark in another country, say Europe could be infringing on Chinese Trademark Law when entering China where another has already filed a trademark application prior to the first mentioned companys entrance in China. It is in such situation Article 13 comes into the picture. As China is a Member of the Paris Convention it has to recognize and protect well known Trademarks even if not registered. The protection of well known trademarks is implemented in the Chinese Trademark Law Article1314. The problem lies in the burden of proof which requires proof that the Trademark in question has a leading position firstly, in the country of origin, secondly, international recognition and lastly sufficient degree of recognition in the Chinese market or amongst the public in China.

To determine whether a trademark is well-known or not, Article 14 of the Trademark Law as amended especially sets out some factors for consideration: the degree of public recognition in its trading areas; the duration in which it has been in use; the duration and extent of its advertising, and the geographical areas the advertising has covered; the records of protection it has gained as a well-known trademark; and other factors serving to make it well known. Registration of Foreign Trademark Now that it is established that getting trademark registered before entering Chinese market is one of the most crucial risk mitigation strategy . The Chinese Trademark Law deals with the registration of Foreign Trademarks under Article 17 and 18. Article 17 provides that Where a foreigner or foreign enterprise applies for trademark registration in China, the matter shall be handled in accordance with any agreement concluded between the country to which the applicant belongs and the People's Republic of China, or any international treaty to which both countries are parties, or on the basis of the principle of reciprocity. Whereas Article 18 relates to cases wherein a foreigner or foreign enterprise intends to apply for the registration of a trademark or handle other trademark

matters in China. It is provided that in such circumstances the foreigner or foreign enterprise shall entrust an organization that is approved by the State and is qualified for serving as a trademark agent. Another Article of the Chinese Trademark Law that is significant is Article 24. Article 24 provides that Where an applicant, within six months from the date he applies for registration of his trademark for the fist time in a foreign country, again applies in China for registration of one and the same trademark for the same goods, he may, in accordance with any agreement concluded between the foreign country concerned and the People's Republic of China or any international treaty to which both countries are parties, or on the basis of the priority principle mutually accepted, enjoy priority.

ENFORCEMENT MECHANISM IN CHINA

The majority of Chinese trademark law is governed under the State Administration for Industry and Commerce of the Peoples Republic of China (SAIC). There are two different systems in place to address infringement issues. I) II) Administrative Track Judicial Track

The recourse that is most sought in China is the Administrative Track which involves the owner filing a complaint with the local administrative office of the relevant Chinese district. That is to say in reality, the majority of the trademark infringement cases occurring in China are handled by AICs, which take the initiative to investigate most of those cases according to their powers and duties. AICs have the advantages of acting on their own initiative, yielding high efficiency and enforcing potent measures. Shoukang & Dr. HUANG Hui (2010:24-25) had explained that when an AIC determines that an infringing act is established, it may, according to Article 53 of the Trademark Law 2001, order the infringer to cease infringement immediately, confiscate and destroy the goods involved and the tools specially used to manufacture the infringing goods and counterfeit the representations of the registered trademark, and may also impose a fine. Compared with the old versions, the Trademark Law 2001 allows far more effective means to crack down on trademark infringement.

Ryan (2009:18) in his article is of the opinion that the recent amendments in the Trademark Law have almost done away with the disadvantages of the Administrative Track by

entrusting them with wide yielding powers which they earlier lacked such as confiscation, imposing sanctions, etc. Thus administrative track is the most plausible recourse in case of Trademark violation in China given its wide sweeping powers, efficiency and timely disposal of case. However there are still some handicaps in the Administrative track such as the local administrative organs have limited resources, and besides enforcing trademark owners rights upon their complaints, these resources must also be allocated in accordance with national campaign styled enforcement. This limits the local agencies resources for carrying out investigations and occasionally makes them unwilling or unable to devote staff for doing this thoroughly.

Thomas (2005:297 et seq) explained the Judicial Track wherein a complaint could be filed in a special IP panel court. The jurisdiction determination is one issue that lurks the judicial track mechanism since the jurisdiction of IP protection is spread over several offices establishing within which court to file the complaint often becomes a Herculean task. Generally, each office oversees the protection granted by one statute or a specific area of IP law. Issues may arise due to geographic limitation or difficulties in multijurisdictional piracy or counterfeiting. The judicial Track suffers from the disadvantages that any judicial forum suffers from such as long time for cases disposal, expensive jurisdictional constraints etc. There are some complications related to filing a lawsuit in China, for instance the lawyer must be Chinese since foreign lawyers may not conduct a case in Chinese courts. In addition, all evidence must be in Chinese, as it is the case in the western part of the world, the plaintiff bears the burden of proof cf. the general rule in the Civil Procedure Law, Article 64. If the case is obvious the length of procedure as a whole will be around 6 months for the first instance and around 3 months in the second instance. However if the case is a bit more complex and there are foreigners involved it might take as long as 18 months to 2 years for two instances.

REFERENCES Giovanni B. Ramello, Whats in a sign? Trademark Law and Economic Theory, Department of Public Policy and Public Choice POLIS, Working Paper No 73 (March 2006) p.2 (Ramello 2006) Senate committee recommendation on Lanham Act, S. Rep. No. 1333, 79th Cong., 2d Sess. (1946), reprinted in 1946 U.S.C.C.A.N. 1274 United States Embassy Beijing China, China IPR Toolkit (2008): China has made strides to bolster and modify its laws and regulations. available at http://beijing.usembassychina.org.cn/ipr.html (China IPR Toolkit) Last visited 8.1.2013. Laurie Self and Jason Ma, Amending Chinas Trademark Law: A Discussion of the possible changes to trademark law in China, Trademark World #218, (June 2009) p. 18. Huang Wenhui, Establishing and Refining Trademark Examination System in China:From Comparison of Trademark Examination System between China and Japan, Trademark Office, State Administration for Industry and Commerce, China, Research Report (2005) p. 4-5 Anders Egebjerg Dalsgaard, Protection of Intellectual Property in the People's Republic of China: is it really as bad as it looks? (2011) p. 17. Prof. GUO Shoukang & Dr. HUANG Hui, China Trademark Laws & Cases A summary of the trademark system and comments and analysis of Trademark and Unfair Competition cases in China (2010) p.24-25. Ong, Ryan Tacling Intellectual Property Infringement in China, China business review March--April 2009, p. 18. Pattloch Thomas Intellectual Property Law in China, 2005, p. 297 et seq.

BIBLIOGRAPHY

ARTICLES Giovanni B. Ramello, Whats in a sign? Trademark Law and Economic Theory, Department of Public Policy and Public Choice POLIS, Working Paper No 73 (March 2006) Laurie Self and Jason Ma, Amending Chinas Trademark Law: A Discussion of the possible changes to trademark law in China, Trademark World #218, (June 2009) Huang Wenhui, Establishing and Refining Trademark Examination System in China:From Comparison of Trademark Examination System between China and Japan, Trademark Office, State Administration for Industry and Commerce, China, Research Report (2005) Anders Egebjerg Dalsgaard, Protection of Intellectual Property in the People's Republic of China: is it really as bad as it looks? (2011) Prof. GUO Shoukang & Dr. HUANG Hui, China Trademark Laws & Cases A summary of the trademark system and comments and analysis of Trademark and Unfair Competition cases in China (2010) Ong, Ryan Tacling Intellectual Property Infringement in China, China business review (2009) Pattloch Thomas Intellectual Property Law in China, (2005)

WEBSITE AND OTHER SOURCES United States Embassy Beijing China, China IPR Toolkit (2008) available at http://beijing.usembassychina.org.cn/ipr.html (hereinafter China IPR Toolkit)

Senate committee recommendation on Lanham Act, S. Rep. No. 1333, 79th Cong., 2d Sess. (1946), reprinted in 1946 U.S.C.C.A.N. 1274