Bad faith filing

By Paul Ranjard and Huang Hui, Wanhuida Intellectual Property
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After the fourth revision of the Trademark Law, is filing a trademark without intention to use an act of bad faith?

On 23 April 2019, the National People’s Congress of China adopted a revised version of the Trademark Law, modifying several articles, particularly article 4, which now reads as follows: “Any natural person, legal person or other organization that needs to obtain the exclusive right to use a trademark for its goods or services during production and business operations shall apply for trademark registration with the trademark office. Any bad faith application for the registration of a trademark that is not intended for use shall be rejected.”

bad faith
Paul Ranjard
Partner
Wanhuida Intellectual Property

In the new article 4, the concept of bad faith is not connected to any prior right owner. It is merely linked to the lack of intention to use the trademark, dovetailing with the concept of “need” in the previous phrase, already present in the old law.

The question that inevitably arises is: What is, exactly, the meaning of bad faith in article 4? Is the simple fact of filing a trademark without intention to use it an act of bad faith? Or is it necessary to prove circumstances in addition to the lack of intention to use, and in the affirmative, what circumstances should that be?

SAMR regulation on bad faith trademark application

On 16 October 2019, the State Administration for Market Regulation (SAMR) published “Certain Provisions for Regulating Applications for Trademark Registration”. Article 8 focuses on how to ascertain whether a trademark application breaches article 4 of the Trademark Law. There are three categories of facts that the trademark authority should take into account:

  • The first category of facts includes: (1) the number of trademark applied by the same person, and whether such person has been conducting transactions (like reselling) any of such trademarks; and (2) the business activity of the applicant. Individuals with no business activities who file hundreds of trademarks as pure commodities for the sole purpose of reselling them are the target of this category.
  • The second category also relates to the trademark applicant’s profile: Whether the applicant has already been identified as a bad faith trademark applicant, or as an infringer.
  • The third category concerns the trademarks themselves: (1) whether they are identical with or similar to trademarks of other persons, having a certain influence (as in article 32 of the law); or (2) whether they are identical with or similar to the name of a celebrity, the trade name of a business, the abbreviation of a business name or other business signs.

In any event, what is definitively new is that the examiner of the China National Intellectual Property Administration (CNIPA) has now the power to refuse, ex officio, the registration of trademarks that obviously fall under the above-mentioned definitions.

Furthermore, with the new article 4, it is possible for any person to request the invalidation of such a trademark at any time, if it can be argued that it has been filed “in bad faith without intention to use”.

Sky case in Europe

Huang Hui
Partner
Wanhuida Intellectual Property

In Europe, cases have recently been submitted to the European Court of Justice that deal with similar issues. They allow an interesting comparison and some additional reflections.

On 16 October, the Advocate General Tanchev delivered to the European Court of Justice the Opinion in the case of Sky International AG v SkyKick UK Limited, examining whether, when Sky International filed an application to register the word “Sky” as a trademark designating the entire category of “computer software”, while it only had the intention to use the mark on some of the products listed in this highly diversified category, such application was made at least partially in bad faith.

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