The Provisions set parameters on the determination of the bad faith filing act and the bad faith filings not intended for use, and introduce procedures and countermeasures targeting not only the bad faith filings per se, but also the perpetrators (bad faith applicants), facilitators and sometimes enablers (unethical trademark intermediaries), which would be conducive in help turning things around.

On 16 October 2019, China’s State Administration for Market Regulation (SAMR) promulgates “Certain Provisions for Regulating Application for Trademark Registration” (Provisions). The Provisions, which will go into effect as of 1 December, 2019, aim to discouraging the nation’s bad faith trademark applications that have been increasing exponentially over the years. The SAMR solicited two rounds of public opinion for the Provisions back in March and September, and the number of articles increased from 8 in the first draft to 19 in the final text.

The main points of the Provisions may be summarized as follows:

1.     Actual needs and the good faith principle (art. 2 & 3)

The Provisions reiterate that trademark application shall be based on actual needs to acquire exclusive rights to use a trademark (art. 2) and follow the good faith principle (art. 3).

2.     Parameters on ascertaining bad faith filing act (art. 3)

Where it falls under the circumstance as provided by Article 4 of the Trademark Law and constitutes bad faith trademark filing that is not intended for use;

Where it is in violation of Articles 13, 15, 32 of the Trademark Law;

Where the trademark application is filed by fraudulent or other unfair means; and

Any other circumstances that is in violation of the good faith principle or public order and fair practice, or that has other adverse influence.

3.     Countermeasures against bad faith filings not intended for use (art. 6 & 7)

The trademark registry authority shall exercise the following countermeasures:

The bad faith filing will be rejected in trademark refusal and review for trademark refusal proceeding;

Should any opposition is raised against the bad faith filing, the opposition will be upheld;

Should the bad faith filing progress to registration, the registration will be declared invalid.

4.     Punishment over applicants of bad faith filings not intended for use (art. 12)

The local Administration for Market Regulation at or above the county level at the place where the applicant is domiciled or where the illegal act occurred may give warnings, impose fines or exercise other administrative penalty measures based on the circumstances of the acts. If there is illegal business revenue, a fine of up to 3 times of the illegal business revenue but not more than RMB 30,000 may be imposed; if there is no illegal business revenue, a fine of up to RMB 10,000 may be imposed.

5.     Punishment over intermediaries handling bad faith filings not intended for use (art. 13)

The intellectual property administration may order offending intermediaries to make rectifications within a time limit, give warnings, and impose fines not less than RMB 10,000 but not more than RMB100,000. In the case of serious circumstances, the intellectual property administration may concurrently decide to cease the acceptance and handling of the trademark matters submitted by such trademark intermediary.

6.     Parameters on ascertaining bad faith filings not intended for use (art. 8)

The Provisions elucidates that the following factors may be taken into consideration:

The number of trademarks applied for registration by the applicant or the natural person, legal person or other organisations otherwise associated with this applicant, their classes of designated goods and the trademark transactions thereof;

Industry of the applicant’s business and the operation status thereof;

Circumstances where the applicant had been identified by administrative decisions, rulings or judicial decisions that have taken effect as being engaged in filing bad faith trademark applications or in infringing other’s exclusive rights to use a trademark;

Circumstances where the applied trademark is identical with or similar to other’s trademark that has certain reputation;

Circumstances where the applied trademark is identical with or similar to the name of a celebrity, the trade name of a business, the abbreviation of a business name or other business signs; and

Any other factors the trademark registry authority deems necessary to be taken into consideration.