The State Administration for Market Regulation (SAMG) of the People’s Republic of China has recently issued Several Provisions for Regulating Trademark Application Actions (hereinafter referred to as the “Provisions”). The Provisions have a total of nineteen articles and are formulated for the purpose of regulating trademark application actions, curbing mala fide trademark applications, maintaining trademark registration management order and safeguarding public rights and interests. The Provisions will take effect as of December 1, 2019.
In accordance with the Provisions, trademark application actions will be deemed to be mala fide in the event of the following situations.
- Trademark applications that are not filed based on intent to use, as stipulated by Article 4 of the Trademark Law of the People’s Republic of China (hereinafter referred to as the “Trademark Law”);
- Trademark applications that constitute rampant replication, plagiarism and translation of others’ renowned trademarks, as stipulated by Article 13 of the Trademark Law;
- Trademark applications that are initiated by unauthorized agents or representatives or applications of trademarks that have been used by others by means of contracting, business or other relations, as stipulated by Article 15 of the Trademark Law;
- Trademark applications that jeopardize the exiting prior rights of others or constitute squatting by unfair means of trademarks that have been used by others and have gained certain popularity;
- Trademark applications that are filed by means of fraud or other unfair means;
- Trademark applications that are deemed to be in violation of good faith, public order and human morals or will result in negative impacts.
According to the Trademark Law and the Provisions, official actions that crack down upon mala fide trademark applications will include the following.
- As for trademarks in the process of application for registration, China Trademark Office (CTMO) will refuse and will not preliminarily approve mala fide application for registration of trademarks without intent to use that are in violation of Article 4 of the Trademark Law based on media coverage, public reports and investigation clues.
- As for opposed trademarks that have been preliminarily approved, the CTMO will deny registration if the opposition is found well-grounded upon review.
- As for registered trademarks, relevant interested parties are entitled to initiate an invalidation case against the trademark in question according to the law. The CTMO will rule to invalidate the trademark if the invalidation is found to be well-grounded upon review.
- As for trademarks that are not used for three consecutive years, any organizations or individuals are entitled to initiate a cancellation case against the trademark in question before the CTMO.
Apart from the above-mentioned, authorities for market regulation above the county level where the domicile of the illegitimate applicants locate or where illegal act occur can give warnings, impose a fine, and other administrative punishments. In the event of illegal gains, a fine that three times the illegal gains at a maximum of CNY30,000 can be imposed. Where no illegal gains have been obtained, a fine not exceeding CNY10,000 can be imposed.
According to the Trademark Law and the Provisions, the CTMO will give consideration to the following factor when it decides whether a specific application for registration belongs to a mala fide application without intent to use.
- Whether the applicant has filed applications for a large number of trademark registrations or assignments or has squatted trademarks of others for unsimilar goods or services resulting in occupation of public resources;
- Whether the history applications and assignments of the applicant are abnormal;
- Whether the trademarks are renowned registered trademarks or renowned geographical names.
- Whether the applicant has any previous illegal acts by means of search based on its business license and the National Enterprise Credit Information Publicity System.
According to the Trademark Law and the Provisions, punishments for applicants and agencies that pursue mala fide trademark applications are as follows.
- As for applicants, authorities for market regulation can give warnings, impose a fine, and other administrative punishments. In the event of illegal gains, a fine that three times the illegal gains at a maximum of CNY30,000 can be imposed. Where no illegal gains have been obtained, a fine not exceeding CNY10,000 can be imposed.
- As for agencies, authorities for market regulation can give warnings or impose a fine not less than CNY10,000 but not more than CNY100,000 against the agency, and give warnings or impose a fine not less than CNY5,000 but not more than CNY50,000 against its directors and directly responsible persons. Where criminal acts are found, criminal sanctions will be given. Under grave circumstances, the qualification for trademark agency matters can be suspended by the National Intellectual Property Administration (CNIPA).
Moreover, any of the above-mentioned administrative punishments will be publicly issued through the enterprise credit network on National Enterprise Credit Information Publicity System.
The CNIPA has achieved significant results in cracking down upon mala fide trademark applications. In 2018, around 100,000 trademark applications are found to be mala fide and have been refused in the process of review and oppositions. A total of 24,000 mala fide trademark applications have been refused in the second quarter of 2019, accounting for 4.2% of the total trademark applications.