China’s National Intellectual Property Administration (CNIPA) released the Guidelines for Trademark Examination and Trial (商标审查审理指南) on November 22, 2021, effective January 1, 2022. The Guidelines, which are somewhat analogous to the U.S. Patent & Trademark Office’s (USPTO’s) Trademark Manual of Examining Procedure, explains the Trademark Law’s Article 4, which states, in part, “malicious trademark registration applications that are not intended for use shall be rejected” by providing 10 factors to identify malicious applications. These new Guidelines and other measures, such as the Special Action Plan for Combating Malicious Trademark Squatting (打击商标恶意抢注行为专项行动方案), will hopefully further reduce trademark squatting in China.
The legal basis for rejecting malicious trademark applications comes from the Trademark Law and the Several Provisions on Regulating Trademark Registration Acts:
Article 4 Natural persons, legal persons or other organizations that need to obtain the exclusive right to use trademarks for their goods or services during production and business activities shall apply to the Trademark Office for trademark registration. Malicious trademark registration applications that are not intended for use shall be rejected.
“Several Provisions on Regulating Trademark Registration Acts”
Article 3 Applying for trademark registration shall follow the principle of good faith. The following behaviors are not allowed:
(1) It is a malicious application for trademark registration not for the purpose of use as stipulated in Article 4 of the Trademark Law;
Article 5 For a trademark applied for registration, if the trademark registration department finds that it is a malicious trademark registration application that violates Article 4 of the Trademark Law and is not intended for use, it shall be rejected in accordance with the law and shall not be announced.
The specific examination procedures shall be separately formulated by the trademark registration department in accordance with the Trademark Law and the Implementing Regulations of the Trademark Law.
Article 8 When determining whether a trademark registration application is a violation of Article 4 of the Trademark Law, the trademark registration department may comprehensively consider the following factors:
(1) The number of registered trademarks applied for by the applicant or the natural person, legal person, or other organization with which it has an associated relationship, the type of designated use, the status of trademark transactions, etc.;
(2) The applicant’s industry, business status, etc.;
(3) Circumstances where the applicant has been found to have engaged in malicious registration of trademarks or infringed on the exclusive rights of other people’s registered trademarks by an effective administrative decision, ruling, or judicial decision;
(4) Circumstances where the trademark applied for registration is identical to or similar to others’ well-known trademarks;
(5) Circumstances where the trademark applied for registration is identical or similar to the name of a well-known person, company name, abbreviation of the company name, or other commercial signs;
(6) Other factors that the trademark registration department thinks should be considered.
Based on this legal basis, the Guidelines provide for the following factors to be considered to determine when an application is malicious not for the purpose of use:
The following circumstances fall under the “malicious trademark registration application not for the purpose of use” as referred to in Article 4 of the “Trademark Law”, unless the parties provide evidence to the contrary:
(1) The number of trademark registration applications is huge, which obviously exceeds the requirements of normal business activities, lacks real intention to use, and disrupts the order of trademark registration.
(2) A large number of copies, imitations, or plagiarisms of multiple subjects’ prior trademarks with a certain degree of popularity or strong distinctiveness, disrupting the order of trademark registration.
(3) Repeated applications for registration of a specific trademark with a certain degree of popularity or strong distinctiveness for the same subject, disrupting the order of trademark registration.
If such repeated application for registration is a malicious registration situation regulated by other provisions of the Trademark Law, other provisions shall apply.
(4) A large number of applications for registration are the same as those of others’ business names, abbreviations of business names, e-commerce names, domain names, product names, packaging, and decorations that have a certain impact, or other well-known and identifying slogans, designs and other commercial logos.
(5) A large number of applications for registration are identical or similar to public cultural resources such as the name of a well-known person, a well-known work or role, or a well-known and recognizable art work of others.
(6) A large number of applications for registration are identical or similar to the names of administrative divisions, mountains and rivers, scenic spots, and buildings.
(7) A large number of applications for registration of generic names, industry terms, or signs that directly indicate the quality, main raw materials, functions, uses, weight, and quantity of the goods or services that lack distinctiveness.
(8) Submitting a large number of trademark registration applications and transferring a large number of trademarks, and the assignees are scattered, which disrupts the order of trademark registration.
(9) The applicant has sold in large quantities for the purpose of seeking improper interests, forced commercial cooperation from the previous user of the trademark or others, demanded high transfer fees, license fees or infringement compensation, etc.
(10) Other circumstances that can be deemed malicious in applying for trademark registration.
Among the above cases, (3) and (9) are mainly applicable to the opposition and review procedures; in other cases, they are applicable to the registration review, opposition and review procedures.
The full text of the Guidelines is available here:商标审查审理指南 (Chinese only).