Abstract: In recent years, malicious trademark registration has not only dampened corporate enthusiasm and damaged market order, but also hindered the development of Chinese independent brands. With the launch of a new round of revisions to the Trademark Law, whether malicious registration can be regulated through these revisions has become a focus of industry attention.
At the recent 2018 China International Trademark and Brand Festival's parallel session, "Trademark Typical Case Analysis Forum – Regulation of Malicious Registration in Trademark Law Revision," industry professionals discussed these issues, calling for leveraging the opportunity of the Trademark Law revision to strengthen the standardized management of malicious trademark registration, establish a "blacklist" constraint mechanism, and explore the use of a negative record mechanism for malicious trademark registration to constrain such behavior.
Why is Malicious Registration So Frequent?
When people think of the "Wanglaoji" trademark, their impressions are mostly still stuck on the trademark battle between JDB and Guangzhou Pharmaceutical Group and the dispute over the red can packaging. However, as the holder of the "Wanglaoji" trademark, Guangzhou Pharmaceutical Group (GPHL) also faces the challenge of malicious trademark registration. Chen Zhizhao, Minister of the Marketing Department of GPHL, explained at the forum that in addition to the well-known "Wanglaoji" trademark, GPHL has also discovered maliciously registered trademarks such as "Wang Xiaoji" and "Tulaoji" on the market, investing countless human, material, and financial resources annually in combating malicious trademark registration.
"The 'over-moralization' of principled clauses and legislative spirit, the 'legislativeization' of 'judicial functions,' the misalignment between limited resources and efficiency, and the 'obstacles' and 'volatile' nature of the market economy are all dilemmas currently existing in judicial practice," said Tao Jun, Presiding Judge of the Intellectual Property Tribunal of the Beijing Higher People's Court.
Sun Ou, Director of the Legal Affairs Division of the Trademark Review and Adjudication Board of the State Intellectual Property Office, believes that functional departments have encountered many problems in combating malicious registration. From the perspective of review practice, the reasons are: First, the connotation and extension of malicious registration are unclear, and there are differing understandings; second, there are no clear provisions regarding the trademark administrative review authority's initiative to reject applications during the trademark registration examination stage; and third, the legal application standards for combating malicious registration are inconsistent across different procedures.
Zhu Jianjun, Deputy Chief Judge of the Intellectual Property Tribunal of the Shenzhen Intermediate People's Court, stated that my country adopts a registration system for acquiring trademark rights, which does not require the trademark to have an actual intention to use it at the time of registration. Under these circumstances, malicious trademark registration and hoarding are very serious, posing a significant obstacle to the healthy development of my country's trademark system.
How to Regulate: An Opportunity for Legislation
So how should malicious trademark registration be regulated? In light of the recent amendments to the Trademark Law, an official from the Trademark Office of the State Intellectual Property Office stated that Article 7 of the Trademark Law, concerning the principle of good faith, could be used as an applicable clause for filing trademark oppositions or invalidation requests. The application of Article 4 of the Trademark Law could be improved to curb trademark hoarding. Furthermore, the establishment of a mandatory transfer system and a civil compensation system for malicious registration could be explored, the five-year time limit for filing invalidation requests after trademark registration could be removed, and a supporting credit supervision system could be established.
"In recent years, the Trademark Review and Adjudication Board of the State Intellectual Property Office has systematically applied the provisions of the Trademark Law to combat malicious registration. When applying other provisions of the Trademark Law, it has considered malicious factors and strictly adhered to standards. At the same time, it has continuously strengthened special research on combating malicious trademark squatting and explored the establishment of a 'blacklist' constraint mechanism." The official suggested that, to strengthen the regulation of malicious trademark registration, the fourth amendment to the Trademark Law could consider restructuring the trademark registration application examination procedure, eliminating the examination of relative grounds and assuming the function of examining absolute grounds; restructuring the opposition and refusal-to-registration review procedure, retaining the pre-opposition procedure, and assuming the function of examining relative grounds; and conducting the registration application acceptance announcement, with the examination of absolute grounds and relative grounds conducted simultaneously.
From a judicial practice perspective, Tao Jun believes that malicious registration can be divided into two categories: infringement of "private rights" and infringement of "public interest." In terms of value guidance, it should be clearly stipulated that applicants applying for trademark registration must not obviously violate the principle of good faith and must have the intent and ability to use the applied-for trademark. Regarding procedural design, it is suggested that the distinction between the application of authorization and confirmation clauses in the Trademark Law should no longer be based on whether the trademark is authorized; it should cover the entire process of trademark application, opposition, invalidation, cancellation, transfer, and renewal.
"Trademark rights, as a type of property right, derive from the use of the trademark and are a right within market competition. To solve the problem of malicious registration, we can consider appropriately introducing the use-emphasis approach of the Anglo-American law system while adhering to the principle of registration priority in the civil law system, thereby resolving the issues of preemptive registration and deliberate registration in practice," suggests Li Mingde, Director of the Intellectual Property Center of the Chinese Academy of Social Sciences and Executive Vice President of the China Intellectual Property Law Research Association. He further suggests that the Trademark Law should stipulate that applicants, when filing a trademark registration application, should submit evidence of the relevant trademark's use or intended use and make a series of declarations. The Trademark Office should examine the trademark registration application with reference to the business scope recorded in the applicant's business license.
Overseas Trademark Protection Should Be Taken Seriously
In recent years, the more Chinese companies go abroad and register trademarks internationally, the greater the international influence of Chinese brands becomes, and the more likely they are to be targeted by overseas trademark squatting. The importance of overseas trademark protection is undeniable.
On August 4, 2017, the Chinese Consulate General in Iquique notified the State Administration for Industry and Commerce that the names and trademarks of more than 120 Chinese toy companies had been squatted on by foreign businessmen in their personal names with the Chilean Institute of Industrial Property (INAPI). By October 16, 2017, the Chilean squatter agreed to return the squatted Chinese trademarks to the prior Chinese users free of charge, and both parties signed a settlement agreement. Currently, more than 30 companies and nearly 50 trademarks have entered the return process. This rapid and efficient process, taking less than three months, once again demonstrates that overseas trademark protection should adhere to the principle of "enterprise leadership, government guidance, agency participation, and industry organization support," fully leveraging the advantages of all parties. Internally, it should vigorously promote publicity and guidance; externally, it should widely utilize legal and diplomatic means to protect the overseas trademark rights of Chinese companies through various methods. Liu Yi, Director of the Comprehensive Division of the Trademark Office of the State Intellectual Property Office, stated that protecting the rights of Chinese enterprises overseas is a long-term and arduous task. The Trademark Office will focus its efforts on five key areas: establishing and improving guidance mechanisms for overseas trademark rights protection; improving cooperation mechanisms for overseas trademark rights protection; establishing and improving monitoring and early warning mechanisms for overseas trademark rights protection; establishing and improving handling mechanisms for overseas trademark rights protection; and establishing and improving assistance mechanisms for overseas trademark rights protection.
For more information on trademark issues, please contact Huaxu Zhengxin Intellectual Property: 010-52475305 or 0317-8583656