Eliminating trademark squatting with recent amendments to China’s trademark law
The Chinese Trademark Law has recently been the subject of a draft change released by the Chinese Intellectual Property Office. The draft aims to deal with the problems of fraudulent trademark applications and trademark squatting. This amendment would have a significant impact on a number of areas of Chinese trademark law and practice if it were to be implemented in its current form without any additional changes.
The People’s Republic of China’s National Intellectual Property Administration (CNIPA) published the draft Amendment to the Trademark Law in January 2023. (Draft for Comment). The Trademark Law is broadened to 10 chapters and 101 articles in the Draft. These included the addition of 23 new articles and the considerable amendment of 45 articles. The ongoing attempts to decrease fraudulent trademark registrations are the main goal of the amendments. The amended Draft includes a means to force the transfer of intentionally squatted trademarks among other issues.
Many businesses keep delaying registering their trademarks or filing for a trademark in their home country, not in other countries where they may eventually extend their business. When they finally file their application, they may discover that the trademark has already been registered. This is known as domain or trademark squatting, and it occurs when a corporation purposefully registers a trademark or domain that includes the trademark of another company in order to profit from its reputation or to sell later for a profit. Trademark squatting can be done in order to sell trademarks to the original owners for a greater price, to sell counterfeits, or to mimic the brand in order to harm its brand reputation.
China is a ‘First-to-File’ country, which means that the CNIPA grants trademark rights to the entity that submits the first application to register a trademark. This also implies that if a comparable trademark has already been registered in China, you may not be able to seek legal protection. Several people have criticized the first-to-file system for being vulnerable to trademark squatting actions. The new Proposed Amendment, on the other hand, seeks to make it easier to identify and prevent such malicious submissions at an early stage.
Draft amendments of trademark regulation in China
The Amended Draft adds a new requirement for trademark applicants to only apply for marks that are currently in use or that the applicant plans to use in commerce at the time of application. According to Article 61, the Draft proposes a US-style requirement that compels trademark owners to submit a statement of use every five years after registration in order to monitor trademark usage. If the trademark owner fails to do so, the CNIPA will consider the trademark abandoned and cancel it. As a result of the cancellation, the brand owner would be unable to reapply for the mark within one year after its dismissal.
The Amended Draft adds a new requirement for trademark applicants to only apply for trademarks that are currently in use or that the applicant plans to use in commerce at the time of application. According to Article 61, the Draft proposes a US-style requirement that compels trademark owners to submit a statement of use every five years after registration in order to monitor trademark usage. If the trademark owner fails to do so, the CNIPA will consider the trademark abandoned and cancel it. As a result of the cancellation, the brand owner would be unable to reapply for the trademark within one year after its cancellation.
The Draft includes a list of circumstances that demonstrate bad faith filings. The CNIPA and the courts will use the list to determine whether an application was filed in bad faith. This might result in the rejection examination stage, as well as opposition or invalidation actions. Additionally, the legitimate trademark owner may be able to receive compensation and trademark agencies may be fined if they apply for trademarks in any of these circumstances. It is worth noting that, in addition to the existing circumstances that are commonly regarded to constitute malicious filings under present rules, the new article stipulates that “application for a large number of trademarks with no intent to use” is now considered an indicator of malicious filing.
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– You could see How To Register a Trademark in China here.
– You could visit here to see the Procedure of Trademark in China.
– You could visit here to check the Required documents for filing a trademark in China.
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