On 29 March 2022 the China National Intellectual Property Administration (CNIPA) released the “Notice on Continuing to Severely Crack Down on the Malicious Registration of Trademarks”.
The notice highlights the importance of trademark registration management to promote the development of intellectual property and create a favourable environment for innovation and business. It covers eight topics, including:
- illegal behaviours;
- improving monitoring and early warning;
- strengthening agency supervision;
- removing subsidies and incentives; and
- promoting a zero-tolerance policy against malicious trademark registrations.
As a focus of the crackdown, the notice identifies 10 typical illegal acts that violate the principle of good faith, offend public order and customs, seek illegitimate interests and disrupt the order of trademark registration:
- maliciously cybersquatting marks that are the same as, or similar to, important meetings, theories, scientific assertions and political discourses of the Communist Party of China, among other things;
- maliciously squatting marks that are the same as, or similar to, national strategies and policies, major projects, major scientific and technological projects, important events, important exhibitions and major archaeological discoveries;
- maliciously squatting marks that are specific to major sensitive events or emergencies, such as public health events;
- maliciously squatting the names of political, economic, cultural, ethnic, religious or other public figures with a high reputation;
- filing a large number of trademark applications that obviously exceeds the needs of normal business activities, where there is no real intention to use;
- copying, imitating or plagiarising a large number of trademarks or other commercial marks with a certain reputation or a strong distinctive character owned by multiple subjects;
- filing a large number of applications for the registration of marks that are the same as, or similar to, public cultural resources, administrative division names, the common names of goods or services and industry terms, among other things;
- transferring a large number of trademarks where the assignees are scattered, thereby disrupting the order of trademark registration;
- where the trademark agency knows, or should know, that the client is engaged in the above-mentioned acts but still accepts the registrations, or disrupts the order of trademark agency by other improper means; and
- other acts that have a highly negative or detrimental impact on the trademark registration management order, social public interests and public order in China.
In addition to these typical behaviours, the notice puts forth that all IP offices shall cease to offer any subsidies or awards for trademark registration. This includes registrations through the Madrid System. It is left to each office to phase out awards and subsidies based on the local market conditions. However, the notice requests these offices to strictly implement such cancellation.
IP offices are also urged to strengthen the supervision of trademark agencies, as well as crack down on malicious trademark registrations and illegal agency acts through reminders, rectification interviews, inspection, supervision and administrative penalties (including the publication of any administrative penalty decisions).
The notice is part of a wider campaign to eradicate malicious trademark registrations in China. There were an estimated 64.4 million active trademark registrations worldwide in 2020 – up 11.2% from 2019, with 30.2 million in China alone.
This is a staggering number of registrations for a single jurisdiction and the current focus – as evidenced by the notice – is on quality instead of quantity. For example, the United States was second after China with 2.6 million active trademark registrations, and India third with 2.4 million.
The list of typical behaviours will be used to guide IP offices in identifying the most common acts of malicious trademark registrations.
The most significant aspect of the notice, however, is the eradication of awards and subsidies for trademark registration. Market participants have long suspected that awards and subsidies contributed to the crowded register and high levels of malicious trademark registrations in China. It was announced last year that subsidies for patents would be reduced by at least 25 percentage points a year, and be fully cancelled by 2025. While there is no specific date in the notice, it is hoped a similar timeframe will be achievable for trademarks.
This article first appeared in WTR Daily, part of World Trademark Review, in May 2022. For further information, please go to www.worldtrademarkreview.com.