China is drastically revising its Trademark Law to meet the needs of an economy in transition from central planning to rule by the market. The draft of the law has been finished and sent to concerned parties to solicit their opinions, it is reported. It will subsequently be submitted to the State Administration of Industry and Commerce (SAIC) for approval before it goes to the State Council and finally the National People's Congress for revision and approval. Some insiders disclose right now SAIC is making preliminary investigations and appraisal in respect of the revision of the Trademark Law. The Trademark Law currently in use went into effect in 1983 and was revised in 1993.

According to the draft, four provisions of the present law will be canceled, 15 changed and 40 more added. Registering for malicious purposes trademarks which are being used by others and have not been registered will be forbidden. The provision is aimed at protecting the rights of trademark users by preventing the registration of others' trademarks for the purpose of selling them at exorbitant prices back to the users.

The revision also intends to improve protection of intellectual property rights with more severe punitive measures. It gives an explicit definition of trademark infringement. In cases of infringement, damages should also cover a proper proportion of court costs and lawyer's fees. Fines for trademark infringement or counterfeit commodities will be 500 to 1,000 times the worth of a single counterfeit commodity. The present provisions stipulate that the fine should be one-half to five times the illegal income from trademark infringement or sales of counterfeit commodities. However, it has proved almost impossible to ascertain the actual illegal income for compensation purposes.

Moreover, as there is no specific stipulation concerning damages, in some cases they have hardly covered the lawyer's fees, which has dented enthusiasm for taking action to protect trademark rights. This is especially so in some foreign-related cases, insiders say. All this will be addressed in the revised law, into which special protection provisions for famous trademarks will also be written. Taking account of economic globalization, there will also be clear stipulations granting the same rights to internationally registered trademarks which have applied territorial extension as to domestically registered ones. Procedures for applying for international registration by a domestic holder of a registered trademark will also be made clear in the revised law. The revision will also allow anyone to apply for registration of a trademark and permit the co-ownership of a trademark. The important constructive elements of a trademark will be expanded. The revision is also expected to simplify trademark registration procedures, shorten the legal time limit and strengthen judicial supervision.