China to raise fines for trademark infringement

BEIJING - China is expected to raise the compensation ceiling for trademark infringement to 3 million yuan ($500,000), six times the current limit, lawmakers said Monday.

In cases of infringement, compensation of up to 3 million yuan shall be paid to the holders of trademark rights, according to the draft amendment to the Trademark Law, tabled for a third reading at the ongoing bimonthly session of the Standing Committee of the National People's Congress (NPC), China's top legislature.

When the draft amendment was tabled to the top legislature for the first time in December 2012, the compensation ceiling was set at 1 million yuan, up from 500,000 yuan under the current law, while the second reading in June raised it to 2 million yuan.

The move aims to protect exclusive trademark rights and crack down on infringement, said Xie Jingrong, deputy head of the NPC's law committee, at the session which runs from Monday to Friday.

The draft was based on comments from lawmakers, experts and representatives of businesses and trademark agencies, Xie said.

The third reading added clauses to prevent malicious registration of trademarks that are already in use as vicious competition and fraud frequently occurred among trademark agencies.

The agencies violating the law will face fines and a bad credit record filed by industrial and commercial authorities.

Those with serious cases will have their businesses suspended.

The draft also changed clauses regarding the examination period of applications for trademark registration to make it more efficient.

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 latest official statistics.