The New Trademark Law Comes into Effect; People's Daily Online IP Salon Focuses on Malicious Registration and Hoarding
People's Daily, Beijing, January 7 (Reporter Lin Lu) In order to create a good business environment, the fourth revised Trademark Law came into effect on November 1, 2019; the "Several Provisions on Regulating the Application and Registration of Trademarks" came into effect on December 1, 2019. Recently, experts from the Department of Laws and Regulations, Trademark Office of the State Intellectual Property Office, agency service institutions, and enterprises engaged in intellectual property legal affairs, were guests at the People's Daily IP Salon to discuss in depth issues of social concern, such as malicious registration and hoarding, in the implementation of the Trademark Law.
Hu Anqi, director of the Second Division of the Department of Laws and Regulations of the State Intellectual Property Office, introduced that the previous three revisions of the Trademark Law were comprehensive revisions, while this one is a modification of individual clauses for key issues, involving 6 clauses and mainly focusing on two aspects. First, strengthening the regulation of malicious applications, such as strengthening the standardized requirements for agents of trademark registration agency service institutions, that is, if an agent knows or should know about the malicious application behavior of the client and still provides agency services, they will also bear corresponding legal responsibilities. Second, strengthening the protection of trademark exclusive rights. It is understood that based on the 2013 revision of the Trademark Law, this revision has raised the upper limit of statutory compensation to 3 million to 5 million. Previously, the calculation multiple for malicious infringement compensation was 3 times, and now it has been increased to 5 times. "We hope that through the above measures, we can increase the deterrent effect on infringement and strengthen the protection of registered trademark exclusive rights."
At the meeting, Zheng Haiyan, director of the First Examination Division of the Trademark Office of the State Intellectual Property Office, introduced several situations where trademarks are used for "malicious" purposes. First, the applicant hoards trademarks not for their own use, but for profit; second, the applicant registers trademarks to piggyback on famous brands, which is to take advantage of the reputation that other trademarks have already established; third, the applicant registers trademarks and uses them as a condition to coerce others into business cooperation, setting unreasonable conditions.
The malicious registration applications mentioned by Zheng Haiyan are also a headache for enterprises. Zhang Zhaodong, chairman of Beijing Donglingtong Intellectual Property Company, found that large enterprises represented by institutions have almost all encountered piggybacking on famous brands or other malicious attachments. Guo Weihong, director of the Intellectual Property Department of Tongfang Global, said that as enterprises do better and better, they encounter more cases of piggybacking on famous brands. In this regard, Zhao Simeng, senior legal counsel of Xiaomi Group, said: "According to actual usage expectations, we register thousands of trademarks in China every year. Before trademark registration, the business team will conduct a similarity search for the trademark name, but we often encounter situations where the names we choose have already been registered." In fact, the situation encountered by Xiaomi Group is not an isolated case, which can be confirmed by Zheng Haiyan's introduction.
Zheng Haiyan introduced that at present, the number of valid trademark registrations is large, reaching more than 24 million. The possibility of registering a trademark with a good meaning and no conflict with the rights of others is not very high. Therefore, some enterprises, in order to ensure the success rate and be able to choose the best, will apply for registration of hundreds of trademarks for one product. She gave an example of an enterprise that registered 400 trademarks for one product, and the Trademark Office believed that this would cause a great waste of trademark resources. Later, after communication, the enterprise retained the application for one or two hundred trademarks for the core product and voluntarily withdrew other applications. "It is worth noting that the enterprise's voluntary withdrawal of the application is different from the Trademark Office's rejection. The enterprise's voluntary withdrawal of the application indicates that there is no subjective malice, and it is not "not for the purpose of use." However, once it is determined by the Trademark Office as a malicious registration application, it will be a stain on the enterprise's future applications or lawsuits."
Sun Ou, director of the Sixth Review Division of the Trademark Office of the State Intellectual Property Office, said that for the behavior of hoarding trademarks for profit without the purpose of use, the applicant's subjective malice is not very obvious. Therefore, for trademark hoarding behavior with a large number of applications, China has not had effective means to stop it. In the fourth revision of the Trademark Law, by modifying Article 4, the provision "Malicious trademark registration applications not for the purpose of use shall be rejected" was added. This provision gives us a more powerful legal weapon. In subsequent review procedures, Article 4 can also be used as a legal basis for invalidation, making the legal means to combat malicious registration more comprehensive and powerful.
In the registration examination stage, due to the limitations of the examination system and procedures, in most cases, evidence provided by the parties is not accepted, so the parties cannot use evidence to defend their own behavior. The examination department can only make subjective judgments based on the indicator of the number of trademark applications, so there are inevitably some misjudgments in the process of combating hoarding. Does the applicant have the opportunity to prove that their registration application is not malicious? In this regard, Zheng Haiyan said that in order to avoid misjudgments, a review opinion will be issued to the applicant, asking them to provide reasonable reasons for applying for trademark registration. If the evidence they provide can overcome the reason for rejection in Article 4 of the Trademark Law, "Malicious trademark registration applications not for the purpose of use," the Trademark Office will make a ruling in accordance with the law.
Malicious trademark registration in the market has also brought a large workload to enterprises. Zhao Simeng, senior legal counsel of Xiaomi Group, said that no matter what the situation is, enterprises will choose defensive registration to resist malicious registration. Guo Weihong said that before market entities enter the market, they will also conduct trademark layout according to the market pre-planning of enterprise products, protect themselves with intellectual property rights, and avoid being unable to enter the market because trademarks are seized.
"At the time of the initial legislation, the draft did not actually contain the words 'malicious'." Zheng Haiyan introduced that during the discussion of the draft, some representatives proposed that some enterprises have actually used the trademarks after registration and have conducted defensive registration in other categories, so that others will not register this trademark. The representatives at the meeting believed that it is unreasonable to reject all such cases, so the word "malicious" was added to the final law. Zheng Haiyan said that normal, preventive, and defensive trademarks adopted by enterprises are not within the scope of the crackdown and are not within the scope of application of Article 4 of the Trademark Law."
How to determine "not for the purpose of use" and "malicious registration"? Trademark agency service institutions expressed concern about the above issues. According to the revised Trademark Law, if an agent knows about the malicious application behavior of the client and still provides agency services, they will also bear corresponding legal responsibilities. Huang Hui, a partner of Wanhuida Intellectual Property, said: "Which one is for the purpose of use, and which one is not; which one is malicious, and which one is not malicious, these are difficult to judge."
Zheng Haiyan responded positively to these important issues of concern to agency institutions. She introduced that according to the "Several Provisions on Regulating the Application and Registration of Trademarks," when judging whether a trademark registration application violates the provisions of Article 4 of the Trademark Law, the examination department will comprehensively consider the following factors: 1. The number of trademarks applied for by the applicant or natural persons, legal persons, or other organizations related to them, the designated categories of use, and the trademark transaction situation; 2. The applicant's industry and business conditions; 3. The applicant has been determined by effective administrative decisions or rulings, or judicial judgments to have engaged in malicious trademark registration or infringement of the exclusive rights of others' registered trademarks; 4. The trademark applied for is identical or similar to a trademark with a certain degree of reputation; 5. The trademark applied for is identical or similar to the name of a well-known person, company name, company name abbreviation, or other commercial logo; 6. Other factors that the trademark registration department deems should be considered.
For companies encountering malicious trademark registrations, Sun Ou suggests focusing on three key aspects: timeliness, accuracy, and effectiveness. Timeliness means that if a company's trademark is infringed, it must file an invalidation declaration with the Trademark Office's review department within the effective period. If more than five years have passed and the infringement does not constitute adverse effects or disruption of public order and good customs, an invalidation declaration cannot be filed. Accuracy refers to the accurate application of the law. For example, if a company's trademark is preemptively registered by a trademark agent, Article 15 of the Trademark Law should be accurately cited in this case. Misusing the clause will result in the loss of remedial opportunities. Effectiveness refers to presenting sufficient evidence after filing an invalidation declaration. "Trademarks are for use, not speculation. We expect the implementation of the new Trademark Law to further help trademark applications and registrations return to their original meaning." Huang Hui said.
