China's top legislature on August 30 passed a new intellectual property law to crack down on copyright infringements and ensure a fair market for trademark holders.
After three readings over the past two years, the revised law was passed at the bi-monthly session of the Standing Committee of the National People's Congress.
The new law, which will go into effect on May 1, 2014, raises the compensation ceiling for trademark infringement to 3 million yuan ($500,000), six times the previous limit.
It also mitigates the responsibility of trademark holders in providing proof of infringement, saying the alleged offenders shall provide their accounting books or other materials for investigation. Otherwise, compensation could be determined according to the amounts proposed by trademark holders.
Trademark agencies are forbidden from accepting entrustment if they know or should know that their clients are conducting malicious registration or infringing on the trademark rights of others.
Agencies violating the law will face fines and credit score penalties. Those involved in serious cases will have their businesses suspended.
The new law offers protection for well-known trademarks, giving owners the right to ban others from registering their trademarks or using similar ones—even if similar brand names are available.
China adopted its Trademark Law in 1982 and made amendments in 1993 and 2001.