CHINA Trends and Developments Contributed by: Qiang Ma, Jingtian & Gongcheng
or eight registrations were perceived as bad faith squatters. These facts manifest that when assessing bad faith, the CNIPA and courts also consider other factors besides the number of bad faith filings, such as imitation. Applicants with few filings therefore still face uncertainty. Expansive and improper application of absolute grounds to protect private rights In the field of trade mark practice, absolute claus - es are more frequently applied to resolve private rights conflicts, which deviates from the function of protecting public interests. Kong Xiangjun, the former presiding judge of the IP Tribunal of the Supreme People’s Court of China, recently pub - lished an article to oppose the use of absolute grounds to resolve private rights conflicts, which has caught the attention of the relevant industry. Against this backdrop, the following phenomena and trends deserve attention. • Some trade marks in actual use are invali - dated under Article 44.1 of the PRC Trade - mark Law. As an absolute ground provision, Article 44.1 of the PRC Trademark Law aims to prohibit registrations obtained through deceptive or other unfair means. However, when the claims based on relative grounds are not supported, registrants will frequently invoke this provision to overcome prior mark blocks or later mark challenges, such as the case of AURORA. When examining these cases, although the Trial Guideline provides that the genuine intention to use and actual commercial use of the disputed trade mark is an exception to Article 44.1 of the PRC Trademark Law, the courts have set a high threshold for use-based fame in practice. As a result, some challenged marks, which have been in actual use for quite some time and gained a certain level of fame among con - sumers, still ended up being invalidated. This
practice is against the spirit of Article 44.1 of the PRC Trademark Law. • There is a phenomenon of unjust implication that the examining authorities rely on when determining bad faith of some trade marks to invalidate all of the registrant’s other marks. With current practice, others can invoke successful prosecution against one mark to invalidate the registrant’s other marks by the same article, including the registrant’s own brand. However, the trade mark rights of the squatter’s own brand are also worth protec - tion. This undiscriminating practice is actu - ally guilt by association, which is unfair and legally unfounded. Innovative measures taken by the CNIPA and courts to regulate abuse of trade mark rights Raised use threshold for bad faith registrants in the defence of non-use cancellation Non-use cancellation is an area in which the CNIPA endeavours to regulate trade mark squat - ting. After three years of registration, any entity can file an application for non-use cancellation to revoke marks, which have not actually been used commercially. This offers brand owners a way to remove the squatted marks. By doing this, the court is introducing a practice of tak - ing registration intention into consideration as evidence of use in non-use cancellation pro - ceedings. If brand owners can prove the squat - ter’s bad faith in registering and using marks of others, the CNIPA and courts will raise the use threshold and ask for additional evidence to convince them of use. This will place a heav - ier burden of proof on the registrant and leave most trade mark squatters unable to meet the use requirements. As a result, the squatted mark will be cancelled and the brand owners will clear the barriers and get their own marks registered eventually.
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