China’s National Intellectual Property Administration Issues Draft Amendment to the Trademark Law for Comment to Reduce Malicious Trademark Registration

On January 13, 2023, China’s National Intellectual Property Administration (CNIPA) issued the Draft Amendment to the Trademark Law of the People’s Republic of China (Draft for Comment) (中华人民共和国商标法修订草案（征求意见稿)).  The Draft expands the Trademark Law to 10 chapters and 101 articles. Among them, 23 new articles were added, 6 new articles were split from existing articles, 45 articles were substantially revised, and 27 existing articles were maintained.  Many of the amendments focus on reducing malicious registrations of trademarks and also introduces a system to force transfer maliciously squatted trademarks.

The Draft aims to further reduce the malicious registration of trademarks:

• emphasizing that trademarks applied for registration must not violate public order and good customs (Article 14);
• clarify the specific circumstances of malicious application for trademark registration (Article 22);
• establish a system of forced transfer of maliciously squatted trademarks (Articles 45 to 47);
• clarify that after a maliciously registered trademark is declared invalid, the applicant shall bear legal responsibility for infringement (Article 48);
• increase the amount of fines for malicious registration of trademarks (Article 67);
• stipulate that civil compensation should be given for losses caused to others by malicious applications for trademark registration.

The Draft further aims to strengthen the requirement for good faith in the field of trademarks:

• clarifying that applying for trademark registration by deception or other improper means is a trademark registration application in bad faith, and it will be used as a reason for rejection and opposition (paragraph 2 of Article 22);
• fabricating, concealing important facts or deliberately providing false materials and other dishonest behavior will be punished (Article 32); and
• strengthening credit supervision and credit punishment (Article 87).

Trademarks registrants will now be required to file statements of use every five years and will be subject to spot checks (Article 61).

CNIPA explains regarding the need for the Draft,

Malicious registration of trademarks is the issue of most concern in the field of trademarks. The revision of the “Trademark Law” in 2019 has dealt a strong blow to the phenomenon of malicious hoarding of trademark registrations. This revision will focus on strengthening the crackdown on malicious squatting of public resources, other people’s prior rights, and damage to socialist core values, so as to achieve a balance between the rights of applicants, the rights and interests of others, and social and public interests. Through strong institutional measures such as increasing the amount of fines, establishing a compulsory transfer system, clarifying civil compensation responsibilities, establishing an intellectual property public interest litigation system, and establishing strict codes of conduct for trademark registration applications to guide market players to “register with virtue” we will effectively protect rights. Therefore, the lawful rights and interests of the people are improved, the efficiency of resolving trademark disputes is improved, and the squatters pay a higher price.

The full text is available here (Chinese only). Comments are due February 27, 2023.

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