The China State Administration for Market Regulation (“SAMR”) announced the enactment of the Rules on Regulating Trade Mark Filing Acts, which was released in the form of SAMR Decree No.17 and has been in force from 1st December 2019.

Broadly, the Rules advocate that while executing the Trade Marks Law and the Rules, the SAMR and the China National Intellectual Property Administration (“CNIPA”) will continuously advance trade mark application facilitation reform, aggressively curb all illegal activities disturbing the order of trade mark administration, and strive to create a commercial market environment featuring fair competition and good faith.

Specifically, the Rules are for facilitating the implementation of the amended Trade Marks Law approved by the Standing Committee of the National People’s Congress on 23rd April 2019 and effective from 1st November 2019. The 19 specific provisions in the Rules aim to regulate trade mark filing activities from four major aspects:

  1. Setting up a centralised guide on provisions concerning trade mark filing and registration activities violating the principle of good faith (which used to be governed by multiple articles of the amended Trade Marks Law and the newly-added ones) providing specific guidelines for representation services of trade mark agencies; monitoring the whole filing procedure, sanctioning malicious trade mark filing acts at every stage and at every stage of trade mark examination and adjudication.
  2. Listing the factors taken into consideration when examining malicious trade mark filing acts and illegal representation acts by trade mark agencies; elevating operability and transparency of trade mark examination.
  3. Aggressively sanctioning malicious trade mark filing acts and illegal representation acts by trade mark agencies; setting up a fine which value is treble of the illegal gains of the malicious trade mark applicant up to RMB30,000; setting up a fine on trade mark agencies aiding malicious trade mark filing acts of up to RMB100,000 and suspension of the representation services of the relevant trade mark agencies if the offense is deemed aggravated.
  4. Streamlining trademark filing routes and procedures and making the system easier to use for applicants in order to elevate the quality of administration services.

Rule 8 of SAMR Decree No.17 lists the factors examiners may take into comprehensive consideration when assessing bad faith filling under Article 4 of the amended Trade Marks Law as below:

  • The number of trade mark applications filed, the goods and services designated, and whether the trade mark(s) have been transacted, etc., by the applicant or the natural person, legal person, or other organization with which it is associated;
  • the industry the applicant belongs to (same or similar industry with the rightful holder of the trade mark) and its business scope and status etc.;
  • whether the applicant is found to have engaged in malicious trade mark registration or infringed on the exclusive right to register a trade mark by an administrative decision or ruling or court judgment that has taken effect;
  • whether the applied-for trade mark is identical with or similar to a trade mark with a certain degree of reputation belonging to another party;
  • where the applied-for trade mark is identical with or similar to the name of a well-known person, the name of an enterprise, the short name of an enterprise name, or other commercial signs;
  • other factors deemed necessary at the examiner’s discretion.

In 2018, in an effort to uphold the order of trade mark administration, the CNIPA refused approximately 100,000 irregular trade mark applications at the examination and opposition stages. With the new Rules shifting the measures targeting malicious registration filing acts to the early stages of examination, they should prove even more effective in curbing the notorious trade mark squatting problem in China in the last few years.