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Chinese government on Friday introduced new trademark law to curb infringements and initiate strict action against defaulters to foster fair market for trademark holders.

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China's top legislature, the Standing Committee of National People's Congress passed the law during the bi-monthly session that has revised three times.

As per the new trademark law, the compensation for trademark infringement has been raised by six times as compared to the previous fine, to 3 million Yuan (500,000 US dollars). The hefty raise in the fine has been enforced on the basis of comments and suggestions from business house representatives, lawmakers and experts of trademarks from China and other countries of the world.

The new law has put the onus on trademark agencies for not accepting any entrustment if they know that their clients are entering into malicious registration or they are infringing upon the trademarks that are owned by other persons.

Chinese government had further made provision of a bad credit in the new law that will be filed by industrial and commercial authorities on agencies which will violate the new rules and regulations; and in worst cases, government can suspend the businesses of defaulters.

While, in a bid to make trademark registration in the country more efficient, the new law proposed changes in clauses for the examination period of applications before registering a new trademark.

Chinese government has also put forth some new provisions that protect the interests of renowned trademarks and now, the trademark owners have the right to ban other agencies from registering their trademarks or trademarks similar to them, even if such trademarks are not registered in the country. However, the law bans them from using 'renowned trademark' tagline in their ads or commercials.

This is fourth amendment by Chinese government in Trademark Law that was first introduced in the country in 1982.

As per the government records, China have 8.17 million registered trademarks and 6.8 million valid registered trademarks till June this year, one of the largest number in the world.