CBL’s Introduction
This Q&A by the China National Intellectual Property Association explains the trademark examination manual sections that protect unregistered trademarks by prohibiting squatters from registering a legitimate company’s marks. The Q&A explains China’s unique approach of focusing on bad faith filings, and explains the difference between it and the United States approach of requiring a bona fide intent to use, as being much like two sides of the same coin. Additionally, a specific definition of “bad faith” in China is given. This guidance is translated to American English using the User Centered Translation approach.
Contents
Squatting vs.Bad Faith Filings Distinguished
Proof of Use Requirements & Applying Bad Faith
Trademark Examination Manual Q&A — Examination of Bad Faith Trademark Applications Made with No Intent to Use
This Q&A series by the China National IP Administration on the Trademark Examination Manual will inform the public and practitioners about its content.
Chapter 2 of the Guidelines, Examination of Bad Faith Trademark Applications Made with No Intent to Use, has attracted widespread attention since its addition following the fourth amendment to the Trademark Act. The following are the key questions raised and their answers:
1. Q: Why were these examination criteria added to the Guidelines?
A: China’s Congress amended Trademark Act §4(a) to better align with central government policies on 4/23/2019. The amendment intends to improve the economy, IP protection, business environment, and bad faith trademarking problems; it therefore rejects trademark applications filed in bad faith and lacking a bona fide intent to use.
To implement this amendment, the National Administration for Market Regulation issued the Trademark Application Submission Rules through Order No.17, outlining criteria for examining these applications.
Two years later, the China Trademark Office incorporated feedback and experience into this section, establishing standards for examining such trademark applications lacking intent to use, to prevent bad faith registrations.
2. Q: What is the intent behind this section?
A: This section intends to:
(1) Implement the China Trademark Act: provides specific definitions, applicability criteria, relevant factors, and applicable contexts for bad faith applications, as well as examples for guidance purposes.
(2) Standardize trademark practices: provides factors applicable to examination procedures and provides uniform standards for trademark examination, opposition, and review processes while allowing for flexibility as necessary.
(3) Incorporates examination experience: adds, formalizes, and recognizes developments in examination practice.
3. Q: How does lack of intent to use different from other bad faith practices like trademark squatting or registering newly popular words? What differentiates bad faith and lack of intent to use?
A: While the China Trademark Act does not directly define bad faith, §4, §7, §15, §19, §32, and §44 address bad faith trademark applications. Thus, bad faith applications are generally divided into two categories:
1. Trademark squatting, which involves filing applications to squat on established trademarks, exploit popularity trends, or use public figures’ names to damage or profit from the infringement of others’ goodwill and civil or legal rights.
2. General no intent to use, which involves practices such as bulk filings or trademark hoarding without any genuine intent to use the marks, which is disruptive to the trademark registration system.
The Guidelines stipulate that bad faith applications lacking intent to use, as described in China Trademark Act §4(a), occur when applicants file multiple trademark registration applications without a bona fide commercial need other than to hoard the marks. This practice differs from others such as squatting, where the intent is rather to exploit others’ trademark goodwill, rather than to hoard the marks.
While squatting can be addressed through concurrent enforcement, such as infringement of civil law rights, these bad faith practices are not typically subject to Trademark Act §4(a) unless they involve large-scale trademark hoarding that disrupts the trademark system.
Applications lacking intent to use are those where the applicant has no legitimate plan, preparations, or ability to use the marks at the time of filing. Thus, the purpose of China Trademark Act §4 is to prevent disruptions to the trademark registration system such as hoarding. Therefore, any attempts to profit from mass applications without intent to use would constitute bad faith applications under this section.
4. Q: Is proof of use required for trademark applications? How do the two exceptions in this section apply to Trademark Act §4?
A: Under the China Trademark Act, trademark rights are acquired through registration rather than use, and proof of prior use or intent to use is typically not needed when registering a trademark.
The purpose of §4(a) of the China Trademark Act is to prevent trademark hoarding and bad faith filings by applicants with no intent to use the marks, by increasing obligations on registrants to use their marks. The Guidelines also provide two exceptions where §4 would not apply: (1) Defensive registrations: filing for marks similar or identical to your own registered marks to protect against squatting and prevent others exploiting your brand’s goodwill in goods or services outside their core business. (2) Anticipated business: time is needed for product or service development, marketing, and launch, so applicants may file in advance for trademarks to prevent future trademark squatting or infringement on prior user rights.
But note that these exceptions are still subject to administrative review limited to what is reasonably necessary. Excessive defensive registrations and hoarding, regardless of whether for reselling, unnecessarily take up trademark and administrative resources and are therefore still considered bad faith filings lacking intent to use.
5. Q: What would constitute a bad faith trademark application with no intent to use, and why are some only applicable to opposition and review?
A: The China IP Administration in the Guidelines describes ten kinds of bad faith applications lacking intent to use:
(1) Filing excessive trademark applications that clearly surpass reasonable demands for normal business use;
(2) Copying, imitating, or plagiarizing widely recognized or distinctive trademarks from multiple parties;
(3) Repeatedly filing for specific distinctive or widely recognized marks used by another party;
(4) Applying for numerous marks similar or identical to identifiers used by third parties, such as trade names, product names, or packaging;
(5) Applying for numerous trademarks similar or identical to the names of public figures, famous works, or other cultural heritage;
(6) Filing for numerous trademarks resembling the names or marks of administrative areas, tourist attractions, or public landmarks;
(7) Applying to register numerous generic or industry-specific terminology, or marks describing the goods or services, such as their quality, ingredients, or functions;
(8) Filing many applications and assigning the trademarks to different, unrelated parties;
(9) Selling large quantities of trademarks, using trademarks to coerce prior users or third parties into commercial collaborations, or demanding high trademark assignment fees, license fees, or infringement damages for the purpose of obtaining unlawful gains.
(10) Other bad faith trademark registration practices.
The terms “numerous” and “excessive” are evaluated based on the context of the applicant and the marks involved.
Other provisions of the China Trademark Act may also apply to the “repeated applications” practices in situation (3) if such practices meet the bad faith criteria under such provisions. Other situations are also subject to other provisions of the Trademark Act, if applicable.
Items (3) and (9) are mainly resolved through opposition and trial due to the need for evidence, which cannot typically be provided during the initial registration examination. The opposition and trial process ensures fairness by allowing registrants to show evidence and defend their claims. Nevertheless, these instances can also be addressed earlier if suitable evidence is found during the initial examination.
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See Trademarks FAQ to learn more about how trademarks work in China
This article was translated to American English using the User Centered Translation approach from the following government publication:
国家知识产权局商标局: “《商标审查审理指南》重点问题一问一答——不以使用为目的的恶意商标注册申请的审查审理”
https://www.cnipa.gov.cn/art/2022/2/8/art_66_173092.html