The Fourth Amendment to China’s Trademark Law came into effect on November 1, 2019. It has attracted a lot attention, since it addresses the rampant practice of bad-faith trademark registration in China. To enact the Fourth Amendment, the State Administration for Market Regulation (SAMR) also adopted the draft regulation Certain Provisions for Regulating Application for Trademark Registration, which came into force as of December 1, 2019.
Foreign brand owners have usually found it difficult to take back their own brands when trademark hoarders pre-emptively registered their brand names in China. As a first step to recovering the trademark of their brand name in China, brand owners needed to oppose the pre-emptively hoarded trademarks or get such trademarks annulled. In some previous cases, trademarks registered by trademark hoarders might be invalidated on legal grounds of “registration through deception means or other unjustified means,” as it disrupted the orders of trademark registration management and fair competition of the market. However, in most such cases, foreign brand owners were required to provide evidences proving that their brands were already reputed in China. This is of course difficult for those who have few business activities in China.
The newly amended Trademark Law clearly states that malicious trademark applications filed in bad faith, without the intention to use, shall be refused for registration under Article 4. Meanwhile, by amending other related articles in the trademark law, there is a new legal framework to crack down on bad-faith trademark applications/registrations filed without intention to use:
- In a trademark application procedure, the China Trademark Office can refuse the registration for such trademark applications.
- Anyone can file an opposition against trademark applications that have been preliminary approved by trademark office;
- In a trademark invalidation procedure, anyone can file for trademark invalidation against registered trademarks.
Furthermore, trademark agents must refuse entrustment to file trademark applications if they know or should have known that such applications are being filed in bad faith without intention to use. Otherwise, trademark agents will potentially be subject to administrative penalties, as well as criminal liability in serious circumstances.
Additionally, the Guidelines for the Trial of Trademark Right Granting and Verification Cases published by the Beijing High Court in April 2019 specifies some circumstances that can be interpreted as those under which an applicant lacks intention to use the trademark, including, among others, “applying for registration of a large number of trademarks without good reasons.”
Based on the above, at this early stage, although there are not yet detailed trademark examination rules or precedent specific to the new amendments related to bad-faith trademark registration without intention to use, the newly amended trademark law provides direct legal grounds to oppose and invalidate trademarks registered/applied by trademark hoarders. It can therefore be reasonably expected that it will be easier for a foreign brand owner to take back its trademark which already applied or registered by trademark hoarder, without being required to prove its brand is reputed in China.
Nonetheless, brand owners should still have a well-planned trademark strategy that allows them to register their own brand in China after such a bad-faith trademark is annulled.