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Commentary on China's New Trademark Law

On October 27, 2001 the final amendments to the Trademark Law were approved by the Standing Committee of the National People's Congress of the People's Republic of China. The new amended version will become effective as of December 1, 2001. The new version, in the spirit of abiding by WTO rules, borrows much language from the Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement and makes great strides in improving intellectual property protection in China.

Lehman, Lee & Xu's China Intellectual Property Law Newsletter will devote the next three issues to explaining the most significant changes in the Trademark Law. We hope this three-part explanation will provide our colleagues and other interested parties with a greater understanding of the consequences the recent amendments will bring to IP holders.


Part I of III

Types of Marks

Article 3 now combines several articles in the previous Trademark Law concerning the registering of a "goods trademark", "service trademark", "collective mark" or a "certification mark" into one article. The explanations of a "collective" or "certification" mark are much clearer additions to the Trademark Law. The specific definitions of "collective mark" and "certification mark" below were only previously included in supplementary stipulations instead of in the Trademark Law.

The definition of a "collective mark" refers to a symbol registered in the name of a group, association or other organization for the purpose of being used by members of such group, association or organization in business activities showing the membership of the users in such group, association or organization.

The definition of a "certification mark" in this law refers to a symbol controlled by a organization that has the ability of supervising a certain kind of product/service and is used by entities or individuals beyond such organization for proving the place of origin, raw materials, manufacturing process/method, quality and other certain characters of such products or service.

Similar to the previous trademark law, the new one still appoints the Administration for Industry and Commerce of the State Council to be responsible for determining the special issues regarding the registration and management of "collective marks" and "certification marks."

According to the old Trademark Law, only foreign individuals could apply to register trademarks in China. Now, Article 4 now allows for individuals, legal persons and other organizations to apply to register a trademark and obtain the exclusive right of use for a product they manufacture, produce, process, select or sell, or a kind of service they render to their clients. This now allows Chinese individuals the right to apply to register a trademark. While this will not affect foreign applicants, this addition greatly expands the possible applicant base in China, as only organizations were allowed to apply previously.

Article 5 stipulates that two or more individuals or legal persons or other organizations may jointly apply for registering the same trademark with the Trademark Office and enjoy and implement the exclusive right of use of such trademark. This new stipulation meets the requirement of allowing a group of companies in a partnership to jointly own the rights to a trademark. We believe there will be specific stipulations concerning this in the new Implementing Regulations of the new Trademark Law. This is an important amendment because many foreign applicants jointly owned a trademark in other countries but found they were not able to enjoy joint-ownership in China.


Registrable Parts of a Trademark

Article 8 now allows that any visible symbol that differs one's product/service from that of others, including characters, devices, letters in different languages, figures, combinations of three-dimensional symbols and colors and combinations of the above elements, can all be registrable parts of a trademark. This new stipulation now protects three-dimensional marks with their corresponding color combination. There will be more specific stipulations concerning this in the new Implementing Regulations under the new Trademark Law of the People's Republic of China.

Article 10 determines that the following words or devices shall not be used:

(1)those identical with or similar to the State name, national flags, national emblem, military flag, or decorations, of the People's Republic of China and those identical with the name and device of a special place/location and symbolic of constructions/buildings of the State central department;

(2)those identical with or similar to the State names, national flags, national emblems or military flags of foreign countries, excluding those agreed by the government of such country;

(3)those identical with or similar to the flags, emblems or names of international intergovernmental organizations, excluding those agreed upon by such organizations or those that will not mislead the public;

(4)those identical with or similar to official symbols or testing and verification symbols indicating implementation of controls and guarantees, excluding those that have been authorized;

(5)those relating to generic names or designs of the goods in respect of which the trademark is used;

(6)those having the nature of discrimination against any nationality;

(7)those having the nature of exaggeration and fraud in advertising of goods or services; and

(8)those detrimental to socialist morals or customs, or having other unhealthy influences.

Government-related Geographical Indications

The geographical names of the administrative divisions at or above the country level plus foreign geographical names well-known to the public shall not be used as trademarks, but such geographical names that have another meaning or are part of a collective mark or certification mark shall be accepted for registration. Where a trademark using any of the above-mentioned geographical names has been previously approved and registered, it shall continue to be valid.

Article 10 is an amended article in which exceptions are added in the sub-items 2 to 4. Another important change is the addition of the exception of geographical names as part of certification marks or collective marks. According to the old Trademark Law, geographical names cannot be used as trademarks even if they compose part of a certification mark or collective mark or have acquired another meaning.

Article 11 determines that marks with the following characteristics cannot be registered as trademarks:

(1)only include generic names or terms, devices and model number;

(2)only directly indicate the quality, main raw materials, function, usage, weight, quantity and other characteristics of the product/service;

(3)lack of distinctive character.

However, Article 11 also allows that any above-mentioned marks that have acquired a distinctive character by use and are therefore easily recognized, can be registered as trademarks. More specific explanations concerning this article are expected in the new Implementing Regulations.

Article 11 was amended from terms 5 and 6 of Article 8 in the old Trademark Law which stipulated that "words or devices relating to generic names or designs of the goods in respect of which the trademark is used or those having direct reference to the quality, main raw materials, function, use, weight, quantity or other features of the goods in respect of which the trademark is used, shall not be used in trademarks."

Article 11was amended with the considering that symbols that have some of the above-mentioned characteristics have a secondary meaning. More specific explanations concerning this article may be included in the new Implementing Regulations.

Three Dimensional Marks

Article 12, a new provision concerning three-dimensional marks, is one of the more important amendments in the new Trademark Law. It stipulates that three-dimensional symbols, shapes that are derived from the nature of the relevant product, and shapes that have the purpose of solely acquiring an effect of high technology or substantial value, cannot be registered as trademarks.

Article 12 uses the language in Article 3 (e) of the European Union's First Council Directive to Approximate the Laws of the Member States Relating to Trademarks. It will be interesting to see how Chinese examiners and judges will address this issue in future implementation as in other areas of the world such as Europe or the U.S., the standard to judge the non-functionality and distinctiveness of the shape of goods or packages of goods has always been an issue in dispute.

Well known Trademarks

Articles 13 and 14 provide protection for well-known trademarks. Article 13 of the amended law was amended using the principles of Article 16 of TRIPs. Article 14 goes beyond the requirements set by TRIPs by establishing criteria that Chinese examiners and judges will follow when examining requests for recognition of well-known trademarks.

Article 13 stipulates that trademarks which are identical/similar to well-known trademarks registered in China by others or to similar goods/services through imitation, copying or translation, and will easily cause confusion, shall not be granted registration and are forbidden to be used. Article 13 also determines that trademarks which are identical/similar to well-known trademarks through the imitation, copying or translation of well-known trademarks registered in China by others on different goods/services and will easily cause confusion to the public and harm the right and benefits of the owner of such well-known trademarks, shall not be granted registration and are forbidden to be used.

Article 14 requires that the following elements/factors shall be considered while verifying and ascertaining well-known trademarks:

(1)The extent/degree of the knowledge of such trademark by the correlative/relevant public;

(2)Duration of using such trademark;

(3)Duration, degree and geographic scope/area of the publicizing of such trademark;

(4)Record of such mark being protected as a well-known trademark;

(5)Other elements/factors regarding being well-known.

Unauthorized Registrations

Article 15 ensures that trademark agents or authorized representatives shall not abuse their right to register or use their client's trademark. It stipulates that trademarks registered by the agents or representatives of principals/individuals/legal persons/organizations without authorization shall not be registered if such individuals/legal persons/organizations raise opposition against registration. The new trademark law does not provide for statutory damages, as this falls under the contract law.

Geographical Indications

Article 16, by using the language of Article 22 of the TRIPs agreement, meets the criteria set in the international agreement regarding protection of geographical names. Article 16 of the new trademark law stipulates that trademarks that include geographical indications, but which are not originally from the areas expressed by such a name and will cause confusion to the public shall not be approved to be registered and shall be forbidden. Those that have been registered and approved shall continue to be valid.

The above-mentioned "geographical indications" refers to symbols indicating that a certain product is originally from a certain area and the quality and reputation or other features/characters of such product is determined mainly by natural factors or other factors of such area.



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The China Intellectual Property Law Newsletter is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu will not be held responsible for any such reliance on its contents.

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