China: The New Trademark Law Enhances Trademark Protection In China

It has been more than two years since the promulgation and implementation of China's new Trademark Law in 2019. During this period, how the amendments to the new Trademark Law have been implemented? What effect has been achieved? What regulations or interpretations have been issued by the China Intellectual Property Administration (CNIPA) or Court, and what measures have been taken to promote and ensure the smooth implementation of the new Trademark Law? The following will be explained in combination with the major revisions of the new Trademark Law:

In order to implement the revision of the "Trademark Law" and standardize the behavior of trademark application and registration, the State Administration for Market Regulation (hereafter referred to as SAMR) issued the "Several Provisions on Regulating the Behavior of Trademark Application and Registration" (Order No. 17) in October 2019. It provides specific factors to determine whether a trademark application should be defined as a "bad faith application not intended for use".

In 2020, the China Trademark office voluntarily rejected 15,600 bad faith applications not intended for use during the trademark examination process.

At the beginning of 2021, the CNIPA issued the "Special Action Plans for Combating Malicious Trademark Squatting", and severely cracked down on 10 typical types of bad faith trademark applications such as copies of the names of public figures, wellknown works or celebrity names with high reputation.

The CNIPA introduced in a press conference on January 12, 2022 that a total of 482,000 malicious trademark registration applications were cracked down in 2021, and 1111 squatting trademarks such as "Changjin Lake" (famous movie name) and "Quan Hongchan" (gold medal winner in women's single 10-meter platform diving at the 2020 Tokyo Olympics) were quickly rejected. 1,635 registered trademarks were declared invalid ex officio, and 1,062 clues of suspected malicious trademark registration cases or cases with severe adverse efforts were forwarded to the local government.

According to a notice released by the CNIPA on February 14, 2022, the CNIPA refused totally 429 malicious trademark applications for "Bing Dwen Dwen" (name of one of the mascots for 2022 Beijing Winter Olympics) and "Gu Ailing" (Gold medal winner of women's freestyle skiing in 2022 Beijing Winter Olympics), etc. Besides, 43 trademark registrations including "Bing Dwen Dwen" and "Gu Ailing" were declared as invalid by the CNIPA ex officio.

In order to adapt to the revision and improvement of the "Trademark Law" and resolutely crack down on bad faith trademark applications not intended for use, the CNIPA has summarized the practical experience in the past two years since the promulgation and implementation of the new "Trademark Law" and published the "Guidelines for Trademark Examination and Review" (hereinafter referred to as "Guidelines"). The "Guidelines" fully clarifies the examination and review standards for "bad faith trademark applications not intended for use", provides unified and consistent standards in determining "bad faith trademark applications not intended for use" in procedures of trademark examination, opposition, invalidation and review.

The Guidelines define the term "not intended for use" as referring to situations that the applicant does not have genuine intention of use, or activity for preparation of use, or there is no possibility that the applicant may use the mark based on reasonable inference. The Guidelines specifically exclude the following two situations in the application of Article 4:

1. The applicant files marks identical with or similar to its major mark in different classes for the defensive purpose;
2. The applicant files moderate number of marks for its future business.

The Guidelines explicitly list the following ten situations wherein the trademark applications are considered as bad faith filings without intent to use, and the Article 4 of Trademark Law should be applied:

1. The number of trademarks is large and is evidently exceeding the business scope of the applicant, the marks are filed without intent to use and disturb the administration order of trademark application;
2. The applicant copies, imitates, plagiarizes other parties' prior marks with high reputation or strong distinctiveness, and disturbs the administration order of trademark application;
3. The applicant repeatedly copies, imitates, plagiarizes one entity's prior marks with high reputation or strong distinctiveness, and disturbs the administration order of trademark application;
4. The applicant files large number of trademarks similar to other parties' trade names, abbreviation of trade names, domain names, packaging, logos, advertisements, design works and logos;
5. The applicant files large number of trademarks similar to names of famous persons, trade names of famous companies, or other parties' advertisements, art pieces, design works or logos that have obtained high reputation.
6. The applicant files large number of trademarks similar to famous geographical names, tourist attractions, famous landscapes, names of buildings;
7. The applicant files large number of trademarks similar to generic terms, industry glossaries, or files large number of marks directly refers to quality, raw material, function, weight, quantity and any other features of the designated goods/ services;
8. The applicant files large number of trademarks and transfers large number of marks to different parties;
9. The applicant sells large number of trademarks to other parties, or forces other parties to collaborate or there's any other behaviors to obtain improper benefits.
10. Any other situations that can be acknowledged as bad faith filings.

Article 4 of the China Trademark Law can not only be applied ex officio by the CNIPA in trademark application, it can also be an Article to be applied in trademark opposition/invalidation procedures. Generally speaking, the situations as iii) and ix) listed above are mainly used in opposition/invalidation procedures, and the rest situations can be applied in both trademark examination and opposition/invalidation procedure. 

In 2019, the CNIPA launched the "Blue Sky Action" for the IP agency sector to comprehensively rectify the chaos in the sector such as unqualified agencies. In 2021, the CNIPA further promoted the "Blue Sky Action" to crack down on illegal agency behaviors. The CNIPA has quickly cracked down on malicious trademark agency behaviors, and has received and investigated more than 130 cases of representing malicious trademark squatting. 

On August 12, 2021, the CNIPA issued the "Measures for the Collaborative Governance of Illegal Behaviors in the Patent and Trademark Agency Sector" (hereinafter referred to as the "Measures") to combat violations of laws and regulations in the patent and trademark agency sector, aiming to create a clean and upright development environment for the agency sector. According to the "Measures", patent and trademark agencies and agents with one of the following circumstances will be blacklisted, and published to the society within a certain period of time, subject to social supervision and collaborative restraint measures.

1. Patent and trademark agency constitutes illegal employment of personnel resigned or retired from the CNIPA , in accordance with the provisions of the CNIPA on regulating personnel resigned from public office and retired to work in patent or trademark agencies, and there are circumstances such as delay or refusal to correct their violations of laws and regulations, etc.
2. Patent and trademark agency and agent who collude with examiner and obtain improper benefits by means of bribery or other methods that seriously affect the fairness and impartiality of patent and trademark examination work;
3. Patent and trademark agency and agent who have caused serious consequences or have other serious unhealthy effects by means of illegally transmitting the materials involved in the case, intervening the examination conclusion, or obtaining examination information improperly;
4. Other circumstances that should be included in the blacklist.

China's laws regarding intellectual property have systematic provisions on the content of punitive damages. Article 1185 of the Civil Code, which came into effect on January 1, 2021, stipulates that "if the intellectual property rights of others are deliberately infringed, and the circumstances are serious, the infringed person has the right to request corresponding punitive damages". The revised Patent Law and revised Copyright Law, which came into effect on June 1, 2021, also have almost the same provisions as the revised Trademark Law.

On March 2, 2021, the Supreme People's Court issued the "Interpretation on the Application of Punitive Damages in the Trial of Civil Cases regarding Infringement of Intellectual Property Rights" (Fa Shi [2021] No. 4) (hereinafter referred to as the "Interpretation"), It further clarifies the applicable conditions of punitive damages, provide specifications not only in determination of "deliberate" and "serious circumstances", but also in determination of the base and multiple for compensation. Shortly after the Interpretation was promulgated, on March 15, the Supreme People's Court announced six typical civil cases regarding infringement of intellectual property rights which involve punitive damages, among which five are trademark infringement cases, which provided direct guidance for the application of the "Interpretation" in future cases, to guide Courts at all levels correctly apply punitive damages.

In conclusion, the latest amendment to the Trademark Law in 2019 provides a clearer and more direct legal basis for cracking down on bad faith trademark registration. With the joint efforts of trademark examination department and law enforcement department, the bad faith trademark application not intended for use and the illegal trademark agency behaviors are effectively curbed. The Supreme People's Court's Interpretation and Typical cases promoted the improvement of the punitive damages system in the field of IP rights and the implementation of punitive damages in China's judicial practice, which fully reflected China's determination to strengthen the judicial protection of intellectual property rights.

We believe that through China's continued efforts to crack down on bad faith trademark applications and trademark infringement, the order of trademark registration management will be better regulated, trademark rights will be better protected, and fair market competition environment will be better enhanced.

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