July 20, 2021

China’s first-to-file system has contributed to a rise in malicious trademark filings and hoarding, at the same time bad-faith trademark applications are increased significantly. These bad faith trademarks have seriously affected the trademark registration procedure, and worsened the market infringement and the interests of the Chinese market.

Article 4 of the Chinese amended Trademark Law states: CNIPA rejects any Trademark applications, which are not intended to be used and provides the grounds for initiating an opposition or invalidation action and effectively cracking down on malicious filings. Among other provisions, it gives examiners a legal grounds to reject bad-faith applications during the substantial examination stage.

The updates to the law provide a clear legal basis for regulating malicious trademark registrations and a comprehensive mechanism for combatting bad-faith filings and hoardings at any point in the trademark lifecycle. As a result, a bad-faith application may be:

. rejected as early as the substantial examination stage;

. prohibited from registration after preliminary publication;

. declared invalid after registration or cancelled for non-use three years after registration; or

. investigated applicant civil liability for infringement.

The State Administration of Market Regulation’s Provisions on Regulating Trademark Applications for Registration came into effect on 1 December 2019. Article 8 states as follows:

The following factors could be taken into consideration by the relevant trademark registration department wherein is determined whether the trademark registration application is in violation of Article 4 of the Trademark Law: (1) the amount of registered trademarks applied for by the applicant or the natural person, legal person or other organization associated with the applicant, the classes designated, the trademark transaction situation, etc; (2) The industry and business operation status of the applicant; (3) The applicant has been determined by an effective administrative decision or ruling or judicial judgment to have engaged in malicious trademark filings or trademark infringement against others’ exclusive trademark rights; (4) The trademark applied for is same as or similar to the others’ trademark with certain reputation; (5) The trademark applied for registration is same as or similar to the name of a well-known person, company trade name, abbreviation of trade name, or other business logos; (6) other factors.

The Beijing High People’s Court issued the Guidelines for the Trial of Trademark Right Granting and Verification Cases, which also list similar approaches in which to apply Article 4. This states as follows:

If any trademark applicant obviously lacks the true intention of use and is under any of the following circumstances, this applicant may be determined to violate the provisions of Article 4 of the Trademark Law: (1) applying for registration of the trademark identical with or similar to that of various subjects with certain popularity or higher distinctiveness, which is regarded as a serious circumstance; (2) applying for registration of the trademark identical with or similar to that of the same subject with certain popularity or higher distinctiveness, which is regarded as a serious circumstance; (3) applying for registration of the trademark identical with or similar to any other commercial signs other than trademarks of others, which is regarded as a serious circumstance; (4) applying for registration of the trademark identical with or similar to any name of place, scenic spot, building and others with certain popularity, which is regarded as a serious circumstance; (5) applying for registration of a large number of trademarks without good reasons. If the trademark applicant above claims that he has the true intention of use, but fails to present the relevant evidence, this claim shall not be supported.