Interview with Zheng Nan, Legal Department, Trademark Office, State Intellectual Property Office

On December 23, the Sichuan Trademark Association held the "2019 Sichuan Trademark Conference and the Second Sichuan Trademark Association Member Conference" in Chengdu.

On November 1, 2019, the much-anticipated fourth revision of the Trademark Law came into effect. One of the core elements of this amendment is the addition of a provision in Article 4 that "applications for the registration of trademarks in bad faith that are not intended for use shall be rejected". What is the specific content of the newly amended Trademark Law for "application for registration of a bad faith trademark that is not intended for use"? How to use it? What will be the impact? At the conference, the People's Daily reporter took these questions and interviewed Zheng Nan of the Legal Department of the Trademark Office of the State Intellectual Property Office.

People's Daily Online: The Trademark Law adds a provision in Article 4 that "applications for the registration of trademarks in bad faith that are not intended for use shall be rejected".

Zheng Nan: For this question, mainly with reference to the external release of the National People's Congress and the State Intellectual Property Office, the answer is actually very clear, and the direct cause is the indiscriminate registration of trademarks in bad faith and the phenomenon of trademark hoarding.

In detail, in recent years, with the continuous deepening of the reform of trademark registration facilitation and the reduction of trademark application fees, trademark application has become more and more simple, convenient and low-cost. In this regard, it is conducive to the applicant to obtain the trademark security operation as soon as possible. However, on the other hand, it also makes the cost of squatting and hoarding trademarks lower, and trademark squatting and hoarding are becoming increasingly large-scale.

In particular, after the reduction of trademark fees in 2017, the number of trademark applications has increased by leaps and bounds, and the phenomenon of large-scale preemptive registration and hoarding of trademarks has once been very prominent. Existing trademark laws are stretched thin in the face of this situation, and new norms are urgently needed to curb this behavior.

People's Daily Online: You just mentioned that the phenomenon of large-scale trademark squatting and hoarding is prominent, can you give some practical examples? Then, a brief introduction to the trademark situation how to deal with the phenomenon of "trademark bad faith registration"?

Zheng Nan: From the end of 2017 to the beginning of 2018, the media reported a lot of cases of large-scale hoarding of trademarks. Typical examples are: in 2017, the first place in the number of trademark applications was a natural person Hou Mou, and for example, a company in Zhuhai and its affiliated 15 companies registered more than 70,000 trademarks, and such reports have been repeatedly seen in the newspaper. This phenomenon was not curbed until the Trademark Office launched a campaign to combat the bad faith registration of trademarks.

The Trademark Office of the State Intellectual Property Office (hereinafter referred to as the Trademark Office) has vigorously promoted the "move the threshold forward" in cracking down on bad faith trademark registrations and severely cracked down on bad faith trademark registration at the stage of trademark examination and opposition. For example, strengthen the monitoring of malicious registration behavior, and adopt measures such as advance review, centralized review of consolidated cases, and strict application of law to resolutely crack down on bad faith trademark registration. Since 2018, about 130,000 bad faith trademark applications have been rejected in the examination, opposition and review process.

People's Daily News: What role do you think Article 4 of the new Trademark Law will play in cracking down on bad faith trademark registration? Explain the specific content of "bad faith registration of trademarks not for use purposes"?

Zheng Nan: The new law has just been implemented, and there is no data support at present. However, only from the perspective of the legal provisions, a major feature of Article 4 of the new Trademark Law is that it does not target specific trademarks, but directly refers to the act of applying for registration of trademarks. Therefore, for trademark examination authorities, they can directly reject trademarks applied for by bad faith applicants in batches, regardless of whether the trademarks are similar or not. For trademark rights holders, they can file a trademark opposition or invalidation application by proving that the other party is a professional trademark squatter, without bothering to collect evidence such as prior use, which makes it much more difficult to produce evidence. In addition, this article can also fill the gap in the old law's non-legal system of applying for a large number of trademarks that are not similar and disrupt the order of trademarks.

For the second question, there is currently no authoritative definition of "malicious registration not for use purposes". The Several Provisions on Regulating the Registration of Trademark Applications and Registrations issued by the State Intellectual Property Office set out the factors to be considered in determining "bad faith registration of trademarks that are not intended for use". According to this provision, in examination practice, if the trademark registration department discovers that the applicant for trademark registration has applied for trademark registration in large numbers without justifiable reasons, traded trademarks, occupied public resources, and repeatedly preemptively registered other people's trademarks on non-similar goods or services, it will continue to examine whether the application is a bad faith application for trademark registration for the purpose of use.

In the past actions to crack down on the bad faith registration of trademarks, the Office has focused on cracking down on four kinds of acts that disrupt the order of trademark registration: first, a large number of imitations and preemptive registration of other well-known trademarks or other high-profile trademarks; second, a large number of preemptive registration of public resources; third, repeated bad faith preemptive registration of well-known trademarks or other high-profile trademarks of the same enterprise; and fourth, a large number of applications for the names of well-known figures, enterprise names, e-commerce names, and other acts that clearly infringe on the prior rights of others. At present, the understanding and operation of Article 4 of the new Trademark Law may refer to the above practice of the Office.

People's Daily News: Listening to your introduction, there are many large enterprises that will register a large number of trademarks and do not use them. After the implementation of the new Trademark Law, will these acts be prohibited by Article 4?

Zheng Nan: Indeed, there are many large and small companies that register a large number of trademarks, the purpose of which is to prevent others from attaching their goodwill and preventing the trademark from being diluted. For example, Huawei developed the Hongmeng system, in addition to registering "Hongmeng", it also registered "Xuanwu" and "Blue Bird" and other mountains and seas. This kind of behavior we call trademark defense registration. As far as the actual needs are concerned, defensive registration is the most convenient and cost-effective way to prevent trademark squatting for enterprises. From my personal point of view, this defensive registration behavior does not meet the requirements of "bad faith" in Article 4 of the new law. However, Chinese commonly used words are only about 4,000, the number of words that can be registered as trademarks is extremely limited, and defensive trademarks will actually occupy trademark resources, resulting in more and more difficulties in registering trademarks. How to balance trademark defense registration and public trademark resources is yet to be discussed.

People's Daily News: Last question, do you think there is a quantitative requirement for "malicious registration not for the purpose of use"? How many are considered "malicious registrations that are not intended for use"?

Zheng Nan: It is not recommended to quantify "malicious registration applications that are not intended for use". First, the size, type and business scope of market entities are different, and the demand for trademarks is very different; second, in the current situation of commercial registration convenience, any quantitative can be easily bypassed by the applicant; third, although the number of bad faith trademark applications that are not for the purpose of use is often large, their salient characteristics and quantity are not closely linked, and it is not wise to measure bad faith by quantity.

(Editor-in-charge: Zhang Huawei, Gao Hongxia)