Combating Malicious Trademark Filings- China's Actions

In recent years, the China National Intellectual Property Administration (CNIPA) has been taking decisive steps to address the issue of bad-faith trademark filings. In 2021 alone, the CNIPA rejected a staggering 482,000 trademark applications deemed to be filed in bad faith. Building on this progress, the administration continued its efforts in 2022 to combat trademark squatting, freeriding, and the imitation of famous brand trademarks.

To further strengthen its enforcement actions, the CNIPA issued the Circular on Continuing to Severely Crack Down on Acts of Malicious Registration of Trademarks in April 2022. The circular aims to intensify measures against trademark filings made without genuine intent of use, as well as crack down on those engaged in unfair competition through malicious trademark applications.

A significant legal precedent was set in the case of Emerson v Xiamen Hemeiquan el al (2021). The Fujian High People's Court upheld the ruling that numerous malicious trademark applications constituted acts of unfair competition. The court ordered the defendants to cease filing such applications, awarded damages amounting to RMB 1.6 million (USD 230,000) to the plaintiff, and held the trademark agency of the applicant jointly liable.

Recognizing the role of trademark agencies in facilitating such malicious filings, the CNIPA launched the "Blue Sky" campaign in 2022. Additionally, the State Administration for Market Regulation (SAMR) issued the Provisions on the Regulation of Trademark Agencies in November 2022. These provisions outline detailed regulations to prevent violations of the Trademark Law by local trademark agencies and enhance the deterrent effect of punishments.

Both the CNIPA and local administrations for market regulation have taken action against trademark agencies involved in malicious trademark filings and other unlawful activities. The goal is to curb the influence of these agencies in the ecosystem and maintain the integrity of trademark registration processes.

To discourage bad-faith applications, a new article (Article 4) was introduced in the Trademark Law through a 2019 amendment. This article stipulates that malicious applications lacking a genuine intent of use should be rejected. In line with this provision, the CNIPA has increasingly cited Article 4 in its decisions throughout 2022. However, this change in the law has resulted in a heavier workload for the CNIPA and has led to refusals of defensive marks filed by legitimate rights owners. The interpretation of what constitutes a bad-faith trademark application has often been unclear, causing frustration and challenges for legitimate rights holders.

As a result, successfully overcoming refusals under Article 4 has become more difficult. Legitimate rights owners continue to navigate the hurdles presented by this new regime, seeking innovative strategies to protect their trademarks and rights.

While progress has been made in combating malicious trademark filings in China, ongoing efforts are necessary to refine the interpretation of the law, strike a balance between protecting legitimate rights owners and deterring bad-faith applicants, and ensure a fair and effective trademark registration system.