Comparing with the US, China has a short history of trademark law (Grinvald 55-56). However, with China’s expanding interest in global business, there is a threat that it will overtake the USA’s share in patenting and modernization in the new century (Jaeschke et al. 569). China’s investments are most intensive in the technology sphere. Additionally, it is trying to seize the right for renewable energy, biotechnology, semiconductors, and storage batteries (Jaeschke et al. 569). In order to completely realize the present state of things, it is necessary to look into the history of patent development in China and the US.
Historical Overview of Intellectual Property Laws in the US and China
China’s third and most assertive amendment to the patent laws was implemented in 2008. The new rules were enforced in 2010, along with the Patent Examination Guidelines (Jaeschke et al. 570). On the contrary to the US case-by-case method, China’s arrangement of juridical perception is a combination of rules developed from legislation, judge-made law, and the concepts of the Supreme Court judges (Jaeschke et al. 570).
While the patent law in the USA has its roots back at the end of the eighteenth century, China enacted its first patent decree only in 1985. The two amendments were soon added in 1992 and 2000 (Jaeschke et al. 570). Meanwhile, the patent law in the US has marked the technology progress from the steam engine and light bulb to nanotechnology and internet. Granting legal protection for an extensive amount of items has not been an easy matter. Still, the US Congress and the courts succeeded in administering the regulations and countermeasures for the most constructive commercialization of the innovations (Jaeschke et al. 570). The companies which want to succeed in China need to cultivate a combined IP strategy reflecting the issue they meet in the realistic evaluation of their aims and supplies (“Best Practices” 1).
The US-China Intellectual Property Complaint
Although the agreements about intellectual property (IP) rights between China and the US specified China’s commitments, it did not hurry to implement them. In 2007, the US charged a complaint against China for disobeying its duties under Trade-Related Aspects of Intellectual Property Rights (TRIPS) (Harris 96-97).
As China was growing its progress and impact in the world trade, it entered some IP protection transactions. By this, the country showed its promise to defend the IP rights. However, implementation of IP laws did not lead to enforcing them (Harris 97). The USA’s pledge to the World Trade Organization (WTO) included addressing China’s criminal IP regulations and accusing China of insufficient opposition to trademark infringement and piracy. For instance, China’s law did not punish the infringers unless they produced, sold, or circulated more than five hundred infringing duplicates (Harris 97). In order to ascertain the seriousness of the situation, the USA had to prove China’s violations (Harris 98-99). In general, the complaint was a reflection of the larger hostility issues between the two countries. Therefore, there was a suggestion that the conflict should be resolved at a diplomatic level between the two nations rather than via the WTO agreement procedure (Harris 185).
China’s New Trademark Law
In order to address the USA’ s complaints and keep up with the changes in the world intellectual rights protection, China issued the new Trademark Law in 2014. In this law, significant adjustments have been made in the fields of anti-piracy, governmental pursuit, imposition, use of well-known marks, opposition and annulment (“China’s New TL” 1). Organizations from other countries need to get acquainted with these changes in order not to lose any opportunities and not to allow their rights be violated (“China’s New TL” 1).
The important adjustments incorporate increased security against piracy, limited prosecution period for trademarks, reinforced protection of well-known marks, and possibility for utilizing the multiple class trademarks and sound marks. Additionally, the new law limits the legal standing for annulment and oppositions and raises the compensations and reparations against infringement (“China’s New TL” 1).
With the aim of increasing the trademark enforcement, the law forbids the use of a registered trademark or an unregistered popular mark as an enterprise name or even part of it (“China’s New TL: Changes” 3). The changes concerning violation involve equating assistance in the process to infringement itself. The penalties for such misbehavior have been considerably raised. Moreover, the infringer may receive a bigger penalty if he has been involved in two or more cases in the past five years. Finally, the trespasser may be demanded to reveal the account books with the aim of evaluating the damage. If the infringer does not do that, the losses will be decided according to the amount proposed by the trademark proprietor (“China’s New TL: Changes” 3).
Comparison of Trademark Law in China and the US
The first main difference between the two countries’ approaches is the principle of registration. While in the US it is “first to use,” in China it is “first to file” (Foley 1). Therefore, in China, the owner of the trademark is the one who registers it, and in the US – the person who uses it first. Based on this approach, even the unregistered trademark is guarded by law, and its owner has a right to search for the infringers and demand rectification.
Another divergence lies in the US additional federal registration protection (Foley 2). The advantages of such protection involve, among others, the possibility of the trademark to resist any “bona fide use” in all the country whereas the common law defends the brand only in the area of its use (Foley 2).
In order to successfully cooperate with the US, China needs to comprehend the divergences between the US and Chinese trademark regulations.
Protection of Unregistered Well-Known Marks in the Two Countries
Famous marks have a better degree of protection in the world as “their intrinsic nature serves to identify a particular source of a product” (qtd. in Zuber 60).
The US and China both have regulations protecting such trademarks. In the USA, three sections of the Lanham Trademark Act are devoted to this issue. In China, it is regulated by the Anti-Unfair Competition Law.
In China, a well-known mark is the one that is recognizable and has a positive image in the country. Until 2002, only Chinese-registered trademarks were allowed to get the qualification of “well-known,” but the state of things changed when Regulations on Recognition and Protection of Well-Known Trademarks were published by the State Administration for Industry and Commerce in 2003. These regulations provided guidelines for concluding the status of well-known for all marks, both Chinese and foreign (Zuber 60).
In the US, the well-known though unregistered trademarks are protected by three different parts of the Lanham Trademark Act: 43(a): likelihood of confusion, 43(c): trademark dilution, and 43(d): cybersquatting (Zuber 61). According to section 43(a), it is prohibited to use the names and symbols which may produce disorientation. Section 43(c) empowers the famous mark owners to prohibit others to employ the mark in a devaluating way. The purpose of section 43(d) is to forbid the people other than the trademark owner register the “domain name” and use it for getting illegal profit (Zuber 61).
The US and China have similar ways of protecting the unregistered well-known marks. The two countries view a famous trademark as the mark known in the whole state and not only at a regional level. However, the US approaches are more distinct and numerous: the mark owners may choose from several options for protecting their rights. Therefore, China needs to work on improving its system and developing more rational instructions (Zuber 62).
Conclusion
The trademark laws between China and the US have a short but complicated history. The US wants to maintain the diplomatic relations with China, but to do this, the latter needs to reconsider its IP laws thoroughly. As China is gaining more and more influence in the world trade relationships, other countries, including the USA, want to cooperate with it. However, to make this cooperation successful, China needs to conform to the laws protecting the IP. It has already made several decisive steps on the way to being accepted by the world’s leading countries. If China continues to improve its trademark protection laws, it will find a long-lasting and reliable partner in the face of the US.
Works Cited
“Best Practices: Intellectual Property Protection in China.” The US-China Business Council. 2015, pp. 1-5.
“China’s New Trademark Law.” Jones Day, 2013, pp. 1-4.
“China’s New Trademark Law Introduces Key Changes.” Mayer Brown JSM, 2013, pp. 1-4.
Foley, Christopher P. “Protecting Chinese Company Trademark Rights in the U.S.” China IP, 2010, pp. 1-4.
Grinvald, Leah Chan. “Making Much Ado about Theory: The Chinese Trademark Law.” Michigan Telecommunications and Technology Law Review, vol. 15. no. 1, 2008, pp. 53-106.
Harris, Donald P. “The Honeymoon is Over: Evaluating the U.S.-China WTO Intellectual Property Complaint.” Fordham International Law Journal, vol. 32, no. 1, 2008, pp. 96-187.
Jaeschke, Wayne C., Zhun Lu, and Paul Crawford. “Comparison of Chinese and U.S. Patent Reform Legislation: Which, if Either, Got it Right?” The John Marshall Review of Intellectual Property Law, vol. 11, 2012, pp. 567-600.
Zuber, Jeffrey J. “Protection of Unregistered Well-known Marks: China v. US.” China IP, 2008, pp. 60-62.