China releases new measures to regulate bad- faith applications

安杰世泽律师事务所

2019-12-11

导读：China releases new measures to regulate bad- faith applications

Authors｜Kevin Han, Yelian Fan

This article first appeared on WTR Daily, part of World Trademark Review, in (10/2019).

Introduction

China has intensiﬁed the crackdown on bad-faith trademark applications by introducing the “Measures on Regulating Bad-Faith Trademark Applications”, in line with the newly amended China Trademark Law, which will become effective on 1 November 2019. The new measures will come into effect shortly after on 1 December 2019.

In 2017 the total amount of trademark applications was reported to be over 5 million; the percentage of court appeals involving bad-faith issues amounted to over 30%. Since then, China has been stepping up its efforts to curb bad-faith applications, including blacklisting bad-faith applicants and encouraging the public to report such applicants.

Key points

Fines

In addition to elaborating on “bad-faith applications”, the measures allow the Chinese authorities to impose ﬁnes of up to Rmb100,000 on trademark agencies and up to Rmb30,000 on applicants for ﬁling bad-faith applications. This is a huge breakthrough compared to the State Administration for Industry and Commerce (SAIC)’s 2010 measures to regulate trademark agencies, under which the maximum ﬁne was only Rmb10,000.

What is a bad-faith application?

The principle of good faith has long existed under the China Trademark Law, but has rarely been referred to in speciﬁc cases due to a lack of applicable conditions. The measures specify the types of behaviour that indicate that a trademark application has been ﬁled in bad faith:

applying for a trademark without intent to use;
copying, imitating or translating another’s well-known trademark;
where an agent or a representative applies for a trademark without authorisation;
harming the prior rights of others or preemptively registering trademarks that have been used by others and have a certain inﬂuence by improper means; and
applying for a trademark by deceptive or other improper means.

In particular, when deciding whether an application has been ﬁled “without intent to use”, the following factors shall be considered:

the total amount of trademark applications, the designated classes and the trademark transaction history of the applicant or related parties;
the industrial sector and business activity of the applicant;
prior judgments or decisions concluding that the applicant had acted in bad faith; and
the similarity to others’ prior trademarks, names or trade names with a certain reputation.

The authorities may consider other facts which they believe to be relevant. For example, in recent opposition proceedings, the China National Intellectual Property Administration found that several other applications ﬁled by the applicant had been opposed by various entities and thus concluded that it was very likely that the applicant had acted in bad faith when applying for the opposed mark. Such decisions are very encouraging.

Why it matters

The measures were released to ensure the implementation of the newly amended articles of the China Trademark Law relating to bad-faith applications. It is likely that the measures will increase the chances of success of trademark holders in opposition and invalidation actions based on the applicant’s bad faith.

Another highlight is that the measures substantially increase the penalties imposed on trademark agencies. As mentioned above, the 2010 measures issued by the SAIC imposed ﬁnes of up to Rmb10,000 on trademark agencies for ﬁling bad-faith applications. In the new measures, the amount of the ﬁnes has been increased to up to Rmb100,000, with the responsible staff being liable to pay ﬁnes of up to Rmb50,000. This is expected to regulate the practice of trademark agencies effectively.