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Guide for Examination of Article 4 of Chinese Trademark Law

05

JAN

2022

Malicious trademark registration is a pain in China over the years. It causes damages to other party’s legitimate rights and interests, increases pressure to the examination capacity of CNIPA and Courts, disturbs the order of trademark registration, and disrupts fair market competition. To step up the crackdown of bad faith filing, China has amended its Trademark Law in 2019. A key change is Article 4. Article 4 is amended to include that malicious trademark applications that are not intended for use shall be rejected. It empowers the China National Intellectual Property Administration (CNIPA) to reject malicious trademark applications not for practical use at the initial examination stage, opposition and invalidation procedures. To match the amended Article 4, the CNIPA has further published and implemented Regulations for Standardizing the Trademark Application Behaviors from December 1, 2019, a month later after the amended law has taken effect. The Regulations outline multiple factors to be considered in examination of malicious trademark applications.

There has been considerable progress after the amendment of Chinese Trademark Law in 2019. The CNIPA refused about 100,000 abnormal trademark applications at the examination stage in 2018, resulting in a steep decrease of large-batch applications filed by a single applicant in 2019. In early 2020, some applicants took advantage of public attention on the COVID-19 pandemic to file trademark applications. The CNIPA took a firm stand to fight against the malicious applications involving the epidemic and swiftly refused the trademark applications. It also asked the relevant local authorities to question and punish the applicants and agencies infringing the law and regulation and required violators to make corrections. In August 2021, during Tokyo 2020 Summer Olympics, some companies and individuals rushed to registernames and nick names of famous Olympic champions from the Chinese national team. The CNIPA denounced the malicious trademark registrations, refused the applications outright, and investigated and punished the trademark agencies involved. According to the statistics revealed in an internal training course on Dec. 23, 2021, the CNIPA has cracked down nearly 481,500 malicious trademark applications up to now in 2021, including refusal of 60,400 applications, voluntary withdrawal of 52,400 applications and non-acceptance of 368,7000 applications.

Based on the successful experience, the CNIPA recently rolled out a new Guide on Trademark Examination and Adjudicationwhich will supersede the current Standards of Trademark Examination and Adjudication and take effect as of January 1, 2022. The Guide contributes a chapter to explain how the examination of Article 4 is conducted, making examination process more scientific and transparent.

Undoubtedly, the Guide quotes the Article 4 of Trademark Law and Article 3, 5 and 8 of Regulations for Standardizing the Trademark Application Behaviors as legal basis in the Chapter about examination of malicious applications under Article 4. Applicants who file a big amount of trademark applications without intention to use strain trademark resources by unfair means and disrupt the order of trademark registration, will be deemed as engaging in malicious trademark registration. The Guide substantiates and summarizes nine typical situations of malicious trademark registration as follows, and presents typical examples for illustration:

  1. Filing a huge amount of trademark applications that are obviously exceeds the need for normal business;
  2. Filing numerous trademark applications to copy, imitate and plagiarize various parties’ reputable or distinctive trademarks;
  3. Repeatedly filing applications to copy a specific party’s trademarks with certain popularity and strong distinctiveness;
  4. Filing numerous trademark applications that are identical with or similar to other parties’ trade names and short names, names of E-commerce platforms, domain names, commodity names, packaging and decorations that enjoy certain influence, others’ advertising slogans, designs and other commercial signs that are known and distinguishable;
  5. Filingnumerous trademark applications that are identical with or similarto the names of celebrities, names of famous works of art and names of the roles, signs of fine art and other public and cultural resources;
  6. Filing numerous trademark applications that are identical with or similar to the names of administrative districts, mountains and rivers, scenic spots, architectures, etc.
  7. Filing numerous trademark applications that are identical with or similar to the generic names of designated goods or services, industry terminologies and signs that directly refer to the quality, main materials, function, use, weight, quantity and other features and are devoid of distinctiveness;
  8. Filing numerous trademark registration applications, and assignment applications in volume to different assignees;
  9. Selling trademarks in volume in order to earn undue profits, coercing prior trademark users or other parties into business cooperation, demanding high compensation for trademark assignment, license or damages of trademark infringement.

Malicious trademark registrations are not limited to the above-said applications filed by bad faith applicants themselves, but cover the applications filed by other individuals, legal entities or other organizations who collude with the bad faith applicants or have a special relationship or connection with the bad faith applicants. Further, the Guide warns that trademark assignment will not affect the CNIPA’s judgment of violation of Article 4by the applicants.

If malicious trademark applications are obvious and severe, the CNIPA will refuse them directly and quickly. But if Examiners on the “front line” have doubt and hesitancy for refusal under Article 4, the CNIPA will issue examination opinions to require the applicants to submit use evidence or evidence of its intention of use.

The latest trend of malicious trademark registration is multiple filingsby different related parties at different time in small amounts. The new Guide strengthens coordination between different examination procedures of trademark applications, assignment, oppositions and invalidation. The Examiners will spot bad faith applications by monitoring the number of trademarks of the applicant, checking the applicant’s trademarks and class(es), the span of time in which applications are filed, considering the applicant’s industry and business status, business practices, establishment date, business scope, registered capital, the trademark assignment history, effective decisions and court rulings about the applicant’s trademarks, and the applicant’s reply to the Examination Opinions, etc.. To ensure efficient and equitable examination, the CNIPA sets up channels to collect and exchange clues, accept complaints filed by the public and regularly holds meetings of directors to discuss and identify malicious trademark registrations and make decisions.

To respond to the worries of good-faith applicants, the Guide for the first time explicitly makes two exceptions that Article 4 shall not apply: 1. the applicants file defensive applications of trademarks that are identical with or similar to their own registered trademarks; 2. the applicants file trademark applications in a reasonable amount for their expectant future business. This is good news for big and vibrant companies with strong needs for trademarks.

The CNIPA is on track to combat malicious trademark registrations. With new tools of Amended Trademark Law, Regulations and Guide, the CNIPA will certainly improve its ability to achieve the goal.

About the Firm

Unitalen Attorneys at Law
Address 7th Floor, Scitech Place, No. 22 Jian Guo Men Wai Ave., Beijing, 100004 P. R. China
Tel 86-10-5920 8888
Fax 86-10-5920 8588
Email mail@unitalen.com
Link www.unitalen.com

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