On Tuesday, April 23, China's legislature approved several amendments to the current trademark law in an attempt to curb bad faith trademark filings that are often used to blackmail rightful brand owners, disrupt the business of brand owners, and other unlawful purposes. The language added to rules that apply to examination, opposition, and invalidation states: “Any bad faith trademark applications without the intent to use shall be refused.”
In practice, we anticipate this will reduce the burden on brand owners to oppose, invalidate and cancel such marks. The law also provides that trademark agents must determine the intention of their client's trademark applications and should refuse to accept legal representation in cases of bad faith filings. Detailed implementation rules are expected to follow regarding how parties with standing may prove that a filing has been made in bad faith.
By way of background, over 7.37 million trademark applications were filed with the China Trademark Office in 2018, a significant portion of which are believed to be bad faith trademark squatter applications. The burden on brand owners to fight against trademark squatters and the adverse impact on business operation and exportation has grown substantially in recent years. The law is another sign that China recognizes the importance of IP rights and continues to strive to protect the interests of foreign businesses wishing to fairly compete in the PRC.