The key amendments to Article 4 in the PRC Trademark Law amended in 2019 were a concrete and effective endeavor to address the concerns of the trademark right holders and fight against trademark filings in bad faith. Article 4 stipulates that Applications for trademark registrations in bad faith which are not intended for use shall be refused.The amended PRC Trademark Law also provides sanctions on trademark agencies or attorneys which are engaged in offering assistance to applicants filing trademarks in bad faith.
Recently, we have seen increasing number of cases and decisions issued by the Chinese trademark authorities or verdicts rendered by the Chinese courts in rejecting trademarks filed in bad faith, invalidating trademarks registered in bad faith, prohibiting trademarks used in bad faith or dismissing trademark infringement lawsuits filed in bad faith.
There was news coming out in early December, 2020 about two Chinese companies running into problems due to filing trademarks in bad faith.
Both of these two companies are located in Zhuhai, Guangdong Province. One of them, Zhuhai Yunfeifan Trading Co. Ltd., filed 5010 trademarks in one day on May 22, 2018. CNIPA (China National Intellectual; Property Administration) rejected 5109 trademarks filed by this company. The other one, Zhuhai Dianyu Trading Co., Ltd., filed 5061 trademarks in one day on June 27, 2018. CNIPA (China National Intellectual; Property Administration) rejected 5054 trademarks filed by this company. The recent official wholesale rejection is basically death sentence to the business model of filing trademarks in bad faith for these two companies and a loud and clear warning for the other applicants involved in filing or planning to file trademarks in bad faith.
The proactive actions taken by the Chinese trademark authorities and courts against the trademark squatters and especially those filing and hoarding hundreds of trademarks are encouraging news for the brand owners.
However, one formidable bad behaviour, which is the phenomenon of mass attacks launched by the trademark mob against the successful brand of the legitimate trademark owners, deserves sufficient attention and should also be addressed adequately and tackled effectively. This phenomenon can be summarized in two scenarios:
One scenario is that the trademark mob, in other words, multiple companies or individuals, are targeting a successful or popular brand of trademark right holders, filing similar trademarks for registration and then using the registered trademarks to defend their infringing use of the similar or conflicting trademarks.
The other scenario is that one company or individual is targeting a successful or popular brand of trademark right holders, filing, sometimes multiple, similar trademarks for registration and then using the registered trademark to defend their infringing us of the similar or conflicting trademarks.
When multiple companies or individuals are targeting a successful or popular brand of a trademark right holder, filing similar trademarks for registration and then using the registered trademark to defend their infringing trademark use, a brand owner has to face the terrible situation of mass attacks against their brand.
The problems become more complicated for the legitimate trademark owners when some of the trademarks filed by the trademark mob, multiple companies or individuals, passes examination, matures into registration and put into commercial use. As a consequence, the legitimate brand owners have legal barriers to stop the infringing trademark use because as a general rule, the legitimate brand owners need to have the conflicting trademarks, which has been registered, invalidated first or need to have the prior trademark recognized as a well-known trademark so as to stop the infringing trademark use. However, invalidation proceedings can be time-consuming and costly and it can be very hard to get well-known trademark recognition in China. When confronting the mass trademark attacks and fighting against numerous companies or individuals at the same time, it can be a tremendous burden and challenge for the legitimate brand owners.
The present PRC Trademark Law offers the brand owners the weapon to fight and curb the trademark squatting or hoarding behaviours according to Article 4 of the PRC Trademark Law, which provides that Applications for trademark registrations in bad faith which are not intended for use shall be refused. Unfortunately, the legitimate brand owners do not have an an effective mechanism to stop phenomenon of mass attacks launched by the trademark infringers and targeted at their successful and popular brand.
It is suggested that the following solutions should be adopted to contain or overcome the mass attacks launched by the trademark mob against the successful and popular brands.
The big data should be relied on by the Chinese authorities or courts to help the brand owners tackle the mass attacks launched by the trademark mob. When the big data reveals the pattern of the mass attacks launched by the trademark mob against one targeted or given trademark, the attacked trademark should be considered as a trademark having reputation or influence in the market place and the conflicting trademarks should be rejected or invalidated and the use of the conflicting trademark should be stopped so as to protect the prior trademark having reputation or influence in the market place and at the same time, safeguard the consumer interest.
When the big data reveals the pattern of the mass attacks launched by the trademark mob against one targeted or given trademark, the examiners should conduct ad hoc or consolidated examinations of the conflicting trademarks at the request of the legitimate brand owners or on the initiatives of the trademark examiners as in the case of issuing the wholesale rejection decisions against the two Zhuhai companies so as to save time and legal resources in solving the problems for both the brand owners and the examiners when facing the mass attack launched by the trademark mob against one given trademark. If the disputes involving mass attacks are handled case by case, it can be very time-consuming and costly for brand owners and it can cause waste of legal resources and besides, it can lead to inconsistent decisions or verdicts or result in delaying the legitimate brand owner in taking timely actions to stop the infringing trademark use.
When the big data reveals the pattern of the mass attacks launched by the trademark mob against one given trademark, the burden of prove regarding the reputation of the targeted and mass-attacked trademark should be reduced for the legitimate brand owners and especially for the brand owners which produce and distribute products or offer services in the niche market. It is self-evident that a given trademark, which is subject to the mass attacks by multiple companies or individuals, is usually a trademark having developed reputation and influence in the market place, otherwise there is no logic and reason for numerous companies and individuals to file trademarks similar to the targeted trademark. When the products and services are offered in the niche market, the brands used on such products and services are normally not exposed to the general public or the examiners or judges handling the trademark disputes. Sales figures or advertisements related to the brands in the niche market usually are not as impressive as those trademarks on the fast-consuming goods or goods for daily consumption. The big data revealing the pattern of the mass attacks against a particular trademark should be considered and admitted as evidence proving the reputation and influence of the attacked trademark.
Other evidence such as testimonies or affidavits issued by the trade or industrial associations or peer companies should also be considered and admitted as evidence proving the reputation and influence of the attacked trademark amidst the relevant consumers.
CNIPA has a black list of the trademark squatters or hoarders to help trademark examiners in the process of handling trademark examinations, oppositions and invalidations. It is suggested that CNIPA should also compile a blacklist of the actors in the trademark mob or a list of the trademarks frequently suffering mass attacks to assist the trademark examiners as internal references during the trademark examination, opposition and invalidation proceedings.
Phenomenal problems require phenomenal solutions. One strong tiger may not defeat a pack of wolves, let alone, packs of wolves. When facing the same phenomenal problems, the brand owners should collaborate amidst themselves, joining forces and mobilizing all available resources to figure out phenomenal solutions so as to fight the bad faith behaviours more effectively.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.