ARTICLE
12 October 2022

[IP CHINA] "Blue Sky" Against Trademark Agency Illegal Practices

The China National Intellectual Property Administration (CNIPA) launched a ‘Blue Sky' project in the year 2019 which was originally aimed at regulating illegal and unlawful practices...
China Intellectual Property
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The China National Intellectual Property Administration (CNIPA) launched a 'Blue Sky' project in the year 2019 which was originally aimed at regulating illegal and unlawful practices in the patent agency industry. Based on Administration for Market Regulation (AMR)'s recently published cases, it seems that the CNIPA has extended the project covering trademark agencies. Below we are introducing you to three AMR decisions.

The first case concerns forged evidence about a Geographical Indication (GI) application, "???? (Pinyin: Guanmen Hongmei; Meaning: Guanmen Town red manuka flower)", which is a species of a flowering plant. The Sichuan Province AMR has received a clue, reflecting that Sichuan Delong Trademark Agency Co., Ltd. was suspected of falsifying historical materials in its application for the "Guanmen Hongmei" GI trademark, and The Sichuan Province AMR immediately launched an investigation.

Then, the AMR found that for passing the examination of the application for the GI trademark, Mr. He, a supervisor of the trademark agency, changed the content of the Nanjiang County Journal.

The original content in the journal is about "in the year 1998, 10,000 acres of manuka flower bases in Guanmen Town were introduced for grafting. In 1999, 800 acres of good walnut bases were established in the county, with an investment of 330,000 yuan...." The agency has changed the words to "In 1998, Guanmen Town red manuka flowers were grafted county-wide. In 1999, there are investments of 330,000 yuan in Guanmen County to establish a processing plant of Guanmen Hongmei, processing dried Guanmen Hongmei, flower tablets and other food and medicine products." During the examination, the CNIPA found that the submitted evidence is different form the County Journal collected by National Library and Literature Collection institution.

After investigation, the AMR decided that the Agency should correct the violation of the law within fifteen days, and the AMR has issued a warning and a fine of RMB 40,000 to the agency; a warning and a fine of RMB 20,000 for Mr. HE who is in charge of the agency and directly responsible for the illegal action.

The second case is about false promises of a trademark agency that disrupted the order of the trademark agency market by improper means. Haidian District Beijing City AMR has received a clue, reflecting that Beijing Zhuoyihuizhong Intellectual Property Agency Co., Ltd. was suspected of illegally acting as a trademark agent, and the AMR immediately investigated the agency.

Upon investigation, the AMR has found out that in the trademark attorney's WeChat communication with the client, the attorney made several promises such as "using the materials written by the chief lawyer can pass the review smoothly" and "finding a powerful chief lawyer to write the materials, and the trademark will be successfully registered", and the attorney also mentioned many times that "you will regret if you give up the review". The behavior of the attorney has violated Article 68 of the trademark law and belongs to disturbing the order of the trademark agency market by improper means.

A trademark must meet relevant conditions before it can be approved for registration. In this case, as a professional practitioner, the agency concerned should have known the relevant provisions, but it nonetheless made false promises to the client, harmed the interests of the client and disrupted the normal order of the trademark agency market, and thus should be punished. On September 2, 2021, Haidian District AMR made an administrative penalty according to law, giving the agency a warning and a fine of 20,000 RMB.

The third case is regarding filing bad faith trademark applications with affiliated companies. Songjiang District, Shanghai City AMR has received a clue, which reflected that Maiqian Intellectual Property Agency (Shanghai) Co., Ltd. and its affiliated companies conspired to register trademarks and hoard them for sale. Then the AMR started an investigation.

According to the investigation, since 2018, the legal representative of Maiqian Intellectual Property Agency (Shanghai) Co., Ltd. has persuaded his relatives and friends to register six affiliated companies one after another by promising them of sharing trademark transfer fees. The concerned agency makes profits by representing the above companies to apply for trademarks and then transfer the registered trademarks with fees via a third party's platform. From November 1, 2019 to the date of examination of the case, Maiqian Intellectual Property Agency (Shanghai) Co., Ltd. has applied for 1058 registered trademarks for six affiliated companies, successfully registered 504 trademarks, transferred 32 trademarks, and obtained 24250 RMB of illegal income. The AMR has held that the agency and its affiliated companies have violated the regulation of the law. The AMR has ordered 7 concerned entities to immediately correct their behaviors, confiscated 24250 RMB of illegal income, and imposed a fine of 165000 RMB in total for seven entities.

In this case, the agency concerned has registered and hoarded a large number of trademarks and sold them without the purpose of use, improperly occupying public resources and disrupting the market order of trademark application and registration. This case is conducive to guiding trademark application and registration system back to the original purpose of the system that trademarks should be filed with the purpose of use.

Those recent cases show that the AMR is adopting high standards, strong measures and strict requirements to continue to crack down on trademark agencies' violation of the law, and will further purify the trademark agency market, and promote the standardized development of the trademark agency industry.

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.

ARTICLE
12 October 2022

[IP CHINA] "Blue Sky" Against Trademark Agency Illegal Practices

China Intellectual Property

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