Background information:
CNIPA released on their official website Draft Amendment to the current Trademark Law (hereinafter referred to as “Draft”) on 13 January 2023 and is welcoming the public to raise comments and suggestions based on the Draft by 27 February 2023.  
Although it is not sure about the timetable when the Draft will be submitted to the National People’s Congress for discussion and adoption, the Draft could be seen as a signal of the possible trend of change to China Trademark Law which may bring crucial influences to the trademark strategy in mainland China.  It is advisable to have a rough idea of the possible amendment so that the future strategy can be planned ahead.  
Below are highlighted amendments which we think may affect the current trademark strategy adopted by our clients:

1. Use requirement
Article 5 Trademark applications for registration
Natural persons, legal persons or unincorporated organizations, who need to obtain the exclusive right for trade-marks in use or undertaken to use in the production and operation activities, shall file trademark applications for registrations with the administrative department of intellectual property department of the State Council (currently CNIPA, and will be referred to as “CNIPA” hereinafter).
Article 61 Statement for Use of Trademarks
The trademark registrant shall, within twelve months after every five years from the date of approval of the registra-tion of the trademark, state to the CNIPA the use of the trademark on the approved goods or justifiable reasons for non-use. The trademark registrant may make a centralized statement on the use of multiple trademarks within the above-mentioned period. If not stated till the expiration date, the CNIPA shall notify the trademark registrant, and if the trademark registrant has not stated within six months from the date of receipt of the notification, the registered trademark shall be deemed abandoned and the registered trademark shall be cancelled by the CNIPA. 
The CNIPA shall conduct random checks on the authenticity of the description, if necessary, the trademark regis-trant may be required to add relevant evidence or entrust the local intellectual property management department to check.  If the description is not true, the CNIPA shall invalidate the registered trademark.
Our comments:
Currently, voluntary filing of use statement and evidence is not obligatory in mainland China according to the current Trademark Law in force.  Evidence of use is required only when a registered mark is challenged by third parties by means of non-use cancellation action.  
The impact of above mentioned use requirement to the current defensive strategy of filing applications in 45 classes will be:
· Undertaking for use shall be filed when filing new applications;

· Descriptions for use or justifiable reasons for non-use shall be filed every five years for each trademark registration. 

Our suggestions: 
The defensive registration can be maintained at registry for five to six years at most if the trademark registrant is unable to submit use statement. Besides, non-use cancellation actions can be filed by any party after trademarks have been registered for three years. The timing for re-filing applications shall be carefully calculated based on specific scenarios for certain mark, considering the one-year isolation period described in Article 21 (mentioned below) as well.  

2. Prohibition of duplicate applications
Article 14 Conditions for registration

An applied trademark shall have distinctive features that are easy to identify, shall not violate public order and good customs, and shall not conflict with the legal rights or interests previously acquired by others.

Unless as otherwise provided, the same applicant shall register only one identical trademark on identical goods or services.

Article 21 Prohibition of duplicate applications
An applied mark shall not be identical to prior trademarks applied/registered in the name of the same trademark registrant designating identical goods, or has been published as withdrawn, cancelled, or invalidated within one year before the date of application.  There are exceptions prescribed in this provision. 
Our comments:
The purpose of these provisions is to limit the number of applications under the same applicant and prohibit duplicate new applications successively filed which will weaken the effect of provisions aiming to clear the unused trademark filed for hoarding purpose and repeated filing out of bad faith.  
Our suggestions:
· Choose a slightly different design for trademarks;
· Select different goods descriptions from the same subclasses when refiling new applications.
· Place watches on the trademark gazette for cited marks which are under cancellations or invalidations, etc.  

3. Added item in the list of prohibited signs
Article 15 Prohibited signs
The following signs shall not be used as trademark:
……
(5) Those identical with or similar to the names and symbols of important traditional culture, except being authorized.
Our comments: 
Currently no official explanations have been issued for the definition of “names and symbols of important traditional culture” , which might be expounded by the corresponding implementing regulations in the future. Where Chinese version of trademark is to be selected in the future by the clients, this added limitation needs to be taken into consideration.  

4. Applications on the same day to buy time for pending cases
Article 25 First for application
Where two or more applicants apply for registration for identical or similar trademarks designating identical or similar goods, the trademark which is first applied for shall be preliminarily examined and approved; If it is not possible to ascertain the time of application when applying on the same day, the trademark which was first used shall be given preliminary examination and approval, while the application filed by the other person shall be rejected.
Our comments: 
Applications filed through CNIPA’ s on-line platform will no longer be feasible for adopting the strategy of filing two same applications on the same day so as to buy more time pending the result of relevant cases, since it is easy to ascertain the exact time through online system. 
Our suggestions:
If clients need to prolong the time frame of examination by filing two same applications by different persons simultaneously, paper applications filed by post on the same day, preferably through two different local agencies in the same city shall be filed, so as to ensure the paper applications will arrive at CNIPA on the same day.  The same date of receipt (only date, no specific time) of the applications will be taken as the filing date of said two applications, and the proceedings for applications filed on the same day will be initiated.  

5. Well-known trademarks
Article 18 Protection of well-known trademarks
Trademark being used or applied for registration on the same or similar goods is a copy or imitation or translation of third parties’ well-known trademarks not registered in China will be prohibited from use and will be rejected for registration. 
Trademark being used or applied for registration on dissimilar goods is a copy or imitation or translation of third parties’ well-known trademarks, which may be misleading to the public and may do harm to the interests of the holder of the said well-known trademark, will be prohibited from use and be rejected for registration. 
Trademark being used or applied for registration is a copy or imitation or translation of third parties’ well-known trademark which is familiar to the general public, and (co-existence of the marks) is highly likely to cause confusion among the relevant public that the said trademark is related to the well-known trademark to certain extent and hence dilute the distinctiveness of the well-known trademark, or to derogate the market reputation of the well-known trademark, or to abuse the good will acquired on the well-known trademark, will be prohibited from use and be rejected for registration.      
Our comments: 
As indicated in the second paragraph, literarily speaking, protection extended to dissimilar goods will not be limited to registered well-known trademarks.  So long as a trade mark, as a copy, or imitation or translation of the well-known trademark (registered or not) will be misleading to the public and hence do harm to the interests of the holder of the well-known trademark, such trade mark will be prohibited from being used and will be rejected if applied.    
The third paragraph is added to Article 13 in the current Trademark Law regarding protection of well-known trademarks.  Dilution and derogation of well-known trademark will be prescribed in the legislation for the first time, provided that this amendment is eventually enforced.  To our understanding, such protection is likely to be limited to those trademarks well-known to the general public, rather than within relevant public.  For products which are for everyday use, for example, household appliances, fashion products, and other consumption goods, if this third paragraph can be adopted in the final version, such provision will provide strengthened legal support to opposition/invalidation cases filed by the clients’ against third parties’ trademarks, especially when the goods/services are dissimilar.   

6. Changes in opposition procedure
Article 36 Trademark oppositions
For any trademark application preliminarily published, if the prior right owners, interested parties hold it violates the provisions of Article 18, Article 19, paragraph 1 of Article 20, Article 23, Article 24, Article 25, or any person who holds it violates the provisions of Article 15, Article 16, Article 17, Article 21, paragraph 1 and 2 of Article 22, Article 26 of the Law, an opposition shall be filed within two months from the date of publication. If no opposition is filed till the expiration of the opposition period, a trademark registration certificate will be issued. 
Our comments: 
Opposition period is shortened to two months after publication. 
New absolute reasons for opposition are added: 
· Article 21 (prohibition of repeated applications), 
·Article 22 (trademark applications and registrations out of bad faith) (This article incorporates Article 4 and paragraph1 of Article 44 of the current trademark law)
Our suggestions: 
Trademark watches shall be placed in advance and opposition shall be filed in time. 
Repeated new applications may face risks of being opposed and may not even mature into registration. When making decisions on re-filing new applications, we shall carefully study and select the goods descriptions in each subclass and shall check the status of the cited marks to see whether they are within the one-year isolation period. 

7. Deprivation of right to file review for opposed party
Article 39 Examination of oppositions
Paragraph 3: Where CNIPA has made a decision to reject the opposed application as the result of the opposition procedure, the opposed party who disagrees with the decision may bring a lawsuit to the court within 30 days from the date of receipt of the decision. The court shall notify the opponent to participate in the proceedings as third person.
Our comments:
Rights for submitting review on opposition decision granted to the opposed party was revoked.  If the opposed party receives an unfavorable decision, they only have the right to initiate litigation proceedings.  The opponent can initiate invalidation action after the opposed application is approved for registration before resorting to the court, but the opposed party will have no other ways but litigation proceedings which will undeniably boost the costs for opposed party.  If this provision takes effect, the term of opposition and the successive procedure will be effectively shortened to the benefit of the opponent.  

8. Revocation of preliminary published applications
Article 37 Revocation of preliminary publication
Where, prior to registration, CNIPA finds that an application for trademark registration which has been preliminarily approved and published violates the provisions of Article 15 (forbidden signs for use and registration as trademarks) of this Law, the authority can revoke the publication and conduct re-examination.
Our comments: 
In our suggestions to the authority, we proposed that administrative acts shall hold the principle of consistency and if the preliminary approval and publication can be arbitrarily cancelled, the uncertainties for trademark examinations will be greatly enhanced.  The applicants shall be at least granted right to file for administrative reconsideration request or administrative litigation proceedings. Moreover, the existing opposition proceeding can be used to correct errors, so that such revocation procedure is less necessary. 

9. Suspension of administrative proceedings
Article 42 Suspension of proceedings
In the course of trademark examination and hearing, the CNIPA may suspend the examination and hearing if the determination of the prior rights involved must be based on the result of another case being tried by court or being handled by an administrative organ. After the reasons for suspension are eliminated, the examination and hearing procedures shall be resumed without delay.
When the court tries the decision made by the CNIPA on review of rejection, decision of not-granting-registration or invalidation made by the CNIPA in accordance with Article 24 and Article 25 of this Law, the actual state at the time the decision was made shall prevail. If the status of the relevant trademark changes after the decision is made by the CNIPA, it shall not affect the hearing of the decision by the court, except where the principle of fairness is obviously violated.
Our comments: 
We already suggested that the word “may” shall be replaced by “shall” . In this way, the principle of consistency for administrative acts can be kept, and can radically avoid repeated applications from parties aiming to wait for the results of other related cases, and hence improve the efficiency of administrative examinations and save administrative resources.  In the second paragraph of this article, the principle of change of circumstances is excluded.  If that is the case, it is even more crucial to suspend the procedures before the CNIPA, pending the outcome of relevant cases which will bring critical effect to the administrative case. 

10. Revocation of preliminary published applications
Article 37 Revocation of preliminary publication
Where, prior to registration, CNIPA finds that an application for trademark registration which has been preliminarily approved and published violates the provisions of Article 15 (forbidden signs for use and registration as trademarks) of this Law, the authority can revoke the publication and conduct re-examination.
Our comments: 
In our suggestions to the authority, we proposed that administrative acts shall hold the principle of consistency and if the preliminary approval and publication can be arbitrarily cancelled, the uncertainties for trademark examinations will be greatly enhanced.  The applicants shall be at least granted right to file for administrative reconsideration request or administrative litigation proceedings. Moreover, the existing opposition proceeding can be used to correct errors, so that such revocation procedure is less necessary. 

11. Deprivation of right to file review for opposed party
Article 39 Examination of oppositions
Paragraph 3: Where the CNIPA has made a decision to reject the opposed application as the result of the opposition procedure, the opposed party who disagrees with the decision may bring a lawsuit to the court within 30 days from the date of receipt of the decision. The court shall notify the opponent to participate in the proceedings as third person.
Our comments: 
Rights for submitting review on opposition decision granted to the opposed party was revoked.  If the opposed party receives an unfavorable decision, they only have the right to initiate litigation proceedings.  The opponent can initiate invalidation action after the opposed application is approved for registration before resorting to the court, but the opposed party will have no other ways but litigation proceedings which will undeniably boost the costs for opposed party.  If this provision takes effect, the term of opposition and the successive procedure will be effectively shortened which will be beneficial to the opponent.  

12. Suspension of administrative proceedings
Article 42 Suspension of proceedings
In the course of trademark examination and hearing, the CNIPA may suspend the examination and hearing if the determination of the prior rights involved must be based on the result of another case being tried by court or being handled by an administrative organ. After the reasons for suspension are eliminated, the examination and hearing procedures shall be resumed without delay.
When the court tries the decision made by the CNIPA on review of rejection, decision of not-granting-registration or invalidation made by the CNIPA in accordance with Article 24 and Article 25 of this Law, the actual state at the time the decision was made shall prevail. If the status of the relevant trademark changes after the decision is made by the CNIPA, it shall not affect the hearing of the decision by the court, except where the principle of fairness is obviously violated.
Our comments: 
We already suggested that the word “may” shall be replaced by “shall” . In this way, the principle of consistency for administrative acts can be kept, and can radically avoid repeated applications from parties aiming to wait for the results of other related cases, and hence improve the efficiency of administrative examinations and save administrative resources.  In the second paragraph of this article, the principle of change of circumstances is excluded.  If that is the case, it is even more crucial to suspend the procedures before the CNIPA, pending the outcome of relevant cases which will bring critical effect to the administrative case. 

13. Correction of errors at the side of CNIPA
Article 43 Correction of obvious errors
Where the trademark applicant or registrant finds obvious errors in the trademark application documents or registration documents, they may apply for correction. The CNIPA shall make corrections and notify the parties concerned.
Our comments: 
We already suggested that definite time frame shall be prescribed for such correction applications in the legislation. Currently, no matter errors in trademark particulars or classification of subclasses on the CNIPA’ s official website, or applications for correcting errors in the official certificates are filed through online platform or written requests, no replies will be provided to the applicant/registrant.  This issue is time consuming and cannot be effectively and timely solved.  In practice, it happens that our written request for correcting errors in the certificate of registration has been filed for several months, and no update or revised certificate is received.  Since most of e-commerce platforms will require submission of electronic certificate of registration, errors in the official documents will bring inconvenience to the clients in such scenario.  In other cases, arbitrary division of goods/services in sub-classes/groups by the CNIPA especially against International Registrations designating China will directly incur incorrect refusal by citing improper prior marks.  The efficiency of correction mechanism is important.  

14. More option in invalidation actions
Article 45 Option of transfer of registered trademark in invalidation action
The petitioner of invalidation action based on prior right (prior well-known trademark, priorly used mark) can require for transfer of the mark in dispute to the petitioner themselves, rather than invalidate the registered mark. The CNIPA will make a decision on whether to maintain the registration, or to transfer the registration to the petitioner per their request or to invalidate the registration.  
Our comments: 
The option to have the registered mark transferred to the petitioner will benefit the owner of prior right by obtaining the registration directly and exempt the petitioner from the risks that their posterior application being rejected by citing intervening applications filed during the interim.  And the petitioner will acquire the registration with prior filing date directly, which is beneficial to the petitioner.      

15. Identify a registered trade mark 
Article 64 Legal liability for arbitrary change of registered trademark in use
Where a trademark registrant, in the course of using a registered trademark, changes the registered trademark, the name, address of the registrant or any other registered matters on its own, the department responsible for trademark law enforcement shall order correction within a time limit and may impose a fine of no more than RMB 100,000 (around USD 14,700); Where it fails to make corrections within the time limit, CNIPA shall cancel its registered trademark.
Our comments: 
There is no fine imposition in the current Trademark Law. We doubt the administration will actively initiates cancellations of registrations based on this provision. However, risks may be posed if competitors of the clients report to the administrative offices that improper use of the registered mark is spotted.  
Our suggestions: 
The  symbol shall be used more carefully and the registered marks in use shall not be altered in respects of trademark samples, names and address of the registrants without approval of CNIPA.  

16. Abuse of other parties’ registered trademark in e-commerce
Article 72 List of Infringement activities
One more infringement action is added in the list, namely, unauthorized use of a sign, identical or similar to third parties’ registered trademark in the activities of e-commerce in relation to identical or similar goods which will be misleading to the public.   
Our comments: 
Even if clients cannot secure registration on retail/wholesale services in class 35 in respect of their products other than medical, pharmaceutical, veterinary and sanitary products, this provision will offer legal basis for infringement claim against abusing clients’ trademarks in e-commerce activities by unauthorized parties, for instance, using the trademark as trade name of on-line shops.  

17. Penalty imposed on bad-faith applications
Article 67/Article 83 Penalty to applications out of bad faith as listed in Article 22 of the Draft of Amendment.  
Comparing with the current Trademark Law, Article 67 of the Draft provides range of amount of fine for applications out of bad faith, including behavior of trademark squatter.  The cap of the penalty can be RMB 250,000 (around USD 36,800), besides the confiscation of illegal gains.  
Article 83 entitles the owner of prior right to claim civil compensations by initiating civil action before the court against the party who files trademark applications out of bad faith and claim compensations to cover at least the reasonable costs incurred by the principal to cease such behavior of the trademark applicant and to enforce their right.  
Article 84 imposes punishment to principals who file trademark litigation in bad faith.  If losses have been caused to the other party, compensation can be claimed which shall cover the reasonable expenses paid by the other party to stop the malicious trademark action. 
Our comments: 

Such provision will substantially increase the costs of violating the law, and hence deter the parties from continuously applying for trademarks copying and imitating the renowned house mark of clients.