Chinese Ministry Website Analyzes PRC Trademark Commission: Actions Not Illegal, Just a Case of Excessive Government Intervention (Story in Chinese)

September 20, 2004

The Legalinfo website, affiliated with the PRC Ministry of Justice (MOJ), carried critical extensive analysis of legal and regulatory issues surrounding the PRC Commission for the Promotion of Trademarks (Commission) issuance of a list of 271 "famous product brands" through a yearly competition. Corporations expend significant efforts and funds to secure government recognition of their brands.

First, the article raises the question of whether this practice might be illegal under the Administrative Licensing Law. Second, the article illustrates the tendency of Chinese government organs to rely on administrative regulation to determine issues which might (in the U.S.) be decided by the market. Third, the article also illustrates the careful nuance Chinese legal observers must adopt when criticizing government policies.

Quoting Chinese legal academics, the article raises the question of whether the competition process might constitute an illegal attempt to exercise licensing power under a different name. In a relatively terse, unconvincing analysis, the article rejects this argument. However, the article goes on to extensively analyze (and judiciously quote Party officials) on the desirability of government organs passing judgment on issues such as brand fame, and concludes that these are best left to the market. In particular, the article points out that such competitions invariably lead to corporations struggling for favorable attention from government officials, rather than focusing on actual market perceptions of their brands.

The terse rejection (on a MOJ website) of any illegality of government policy appears likely to be a clear signal against raising legal challenges under the Administrative Licensing Law. However, the careful analysis of the desirability of such policies illustrates the extent to which even Chinese government-sponsored organs have some ability to give, receive, and respond to criticism.