China to double fines for trademark infringement

China is expected to double the compensation ceiling for trademark infringement to 2 million yuan (325,400 U.S. dollars), according to the latest draft amendment to the Trademark Law. Compensation ranging from 20,000 yuan to 2 million yuan shall be paid to the holders of trademark rights in the case of infringement, according to the draft tabled for a second reading at the ongoing four-day bimonthly session of the Standing Committee of the National People's Congress (NPC), China's top legislature. The first draft amendment set the compensation ceiling at 1 million yuan, up from 500,000 yuan under the current law. The move aims to better protect exclusive trademark rights and further crack down on infringement, said Xie Jingrong, deputy head of the NPC's law committee. The second draft deleted a previous article which allowed single colors to be registered as trademarks. As only about 100 colors can be distinguished by people's eyes, allowing single colors to be registered as trademarks would cause color monopoly and confusion, explained Xie. Compared with the previous one, the second draft added new clauses to prevent malicious registration of trademarks that are already in use. Trademark agencies shall inform their clients in case the trademark they apply for cannot be registered according to law. The agencies are not allowed to accept entrustment if they know or should know that their clients are conducting a malicious registration or infringing others' rights of trademarks, according to the draft. The draft also offers protection for renowned trademarks, giving their owners the right to ban others from registering the trademarks or using similar ones -- even if such trademarks are not registered. But the words "renowned trademark" shall not be used in promotions or advertising. Trademark registrations will become more efficient under the latest amendment to the law in response to complaints that it takes too long to examine applications. The initial examination of applications for trademark registration is limited to nine months. The period for seeking public opinions is three months, while verification should be completed within nine months, according to the draft. The draft was made with a number of significant changes based on the receipt of public comments. The working group also conducted research in the cities of Beijing, Shanghai and east China's Zhejiang Province, Xie said. China adopted its Trademark Law in 1982 and made amendments in 1993 and 2001. As of June 2012, China held the world's largest number of registered trademarks and valid trademark registrations, at 7.17 million and 6.09 million respectively, according to the most recent official statistics.