As we know, China trademark registration is a first-to-file system. Therefore, it is essential to register your mark as soon as possible in order to avoid trademark squatting (i.e. pre-emptive registration of a mark by a malicious third party, also known as ‘trademark piracy’).
So far, the only solution against bad faith registrations was to apply for cancellation for non-use, available only three years after registration.
This is about to change.
The new Trademark Law of the PRC will take effect on November 1st, 2019 and the amendments will play a crucial role in defending targets of such acts of bad faith.
On the 17th September at the European Chamber of Commerce in Shanghai, Mr. Giovanni Pisacane, GWA Managing Partner, analysed the amendments and discussed with the attendees of the seminar how this new regulation will affect foreign businesses in China.
GWA Greatway Advisory thanks the EUCC for the opportunity.
Here follows a brief summary of the given presentation.
Firstly, the amended law (art. 4) establishes that any bad faith application for the registration of a trademark that is not intended for use: “shall be rejected”. This means that malicious applications of marks not intended for use (I.e. trademark squatting) may be - from now on - rejected by the authorities.
Moreover, it is essential to stress out that bad faith - with the intent of not use – it is now a valid ground for opposition and invalidation of trademark applications (art. 33 and 44).
In addition, the Trademark Law prohibits the trademark agents from assisting in any bad faith filing, establishing new system of warning, fines and other penalties which (now) may be ordered also by the Court in order to oversee the registration procedure.
In tune with all recent revisions of other laws (e.g. Foreign Investment law, Unfair Competition law) the amendments aim to enhance protection of IP rights in China. The common goal of the new reforms - of which IP protection is a pillar - is to increase confidence in domestic protection of such rights in order to attract, welcome and sustain more and more foreign investments in China.
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