Bad(Faith) News for Chinese Trade Mark Squatters
In good news for legitimate brand owners, the China Trademark Law has been amended in an attempt to limit bad-faith trade mark filings. The changes will take effect from 1 November 2019.
The Standing Committee of the National People’s Congress of the People’s Republic of China passed the amended Law on 23 April 2019, adding the following new clause into Article 4 of the Law:
Any bad-faith trademark filing, which is not for genuine use purposes, shall be rejected.
The changes mean that Chinese trade marks which are registered with no intention to use the mark will be considered ‘bad-faith’ registrations. The Chinese Trade Mark Office (CTMO) will be able to deny these bad-faith applications outright.
Presently, trade mark squatting is rife in China, and it has been common practice for foreign applicants who manufacture in China (including a number of our local clients) to file ‘defensive’ trade marks in China to ensure their rights are not lost to trade mark squatters. These defensive filings help to avoid squatters entering Customs notices which prevent legitimate trade mark owners from exporting their own products from China.
There has been some commentary suggesting that these types of defensive filings – where the trade mark owner manufactures but does not sell product in China – may be at risk under the Article 4 amendments. However, we have received advice that manufacturing in China would satisfy the ‘genuine use’ requirement to defend non-use cancellation proceedings.
For now, there is nothing new for our local clients to do. We will keep our clients updated on the true effect of the November changes once they are in force. Until then, it remains our advice to consider Chinese trade mark filings as a matter of priority, especially where manufacturing will occur in China.
As always, please contact Kellie or Geraldine if you would like assistance filing in China or any other overseas jurisdictions.