Prior-Use Defence in the Chinese Trade Mark Law

While the registration-based trade mark regime is known for its simplicity in finding an objectively recognisable basis for granting trade marks, it could lead to some unfair scenarios of trade mark squatting. If a party has been using a disputed mark long before its registrant, yet for whatever reason failed to register the mark before the registrant, the party may be subject to the legal risk of infringing the registrant’s trade mark. China has three mechanisms in the Trademark Law (TML) for prior users to protect their unregistered trade marks: well-known marks, prior rights and prior use. This article focuses on the prior-use defence in art.59(3) of the TML. In addition to analysing the elements of the prior-use defence, this article also discusses its similarity and dissimilarity with well-known marks and prior rights followed by a legislative proposal to the TML.