Combating Bad Faith Trademark Applications

In January 2023, the China National Intellectual Property Administration (CNIPA) published a new draft amendment to the Trademark Law. It makes a number of important adjustments and adds 23 new articles. For foreign companies, the biggest advantage of this amendment is that it strengthens the fight against bad faith trademark registration at the legislative level, which will reduce the cost of rights holders to protect their trademarks.

The draft provides for the first time the concept of “trademark application in bad faith” and specifies the relevant sanctions. Under Article 67, those who register trademarks in bad faith without using them will face a fine of up to RMB 250,000 and confiscation of their illegal earnings. The aggrieved right holder may also file a lawsuit in court, and the amount of compensation must include at least the costs incurred by the right holder to prevent the trademark registration in bad faith.

In addition, repeated or successive registrations of trademarks that have been cancelled or declared invalid are also prohibited. This provision will significantly and effectively reduce the malicious registration of trademarks.

In order to increase the efficiency of a trademark opposition and reduce the cost of legal defence, the draft also shortens the opposition period from three to two months. It abolishes the current procedure for reviewing the trademark opposition decision if the Trademark Office decides not to register the opposition trademark. This means that the trademark applicant can only appeal against the decision not to register the trademark in court. He cannot go through the review procedure again, which increases the cost of defending the rights. Also, the envisaged obligation of the trademark applicant to account for the use of the trademark on the approved goods every five years will combat malicious trademark applications. Within twelve months after the expiration of five years – from the date of approval of the trademark registration – he must prove to the Trademark Office the use of the trademark or provide justified reasons for non-use. Six months after the expiry of the declaration period, the registered trademark shall be deemed abandoned.

Image> Xinhua

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