CHINA Trends and Developments Contributed by: Qiang Ma, Jingtian & Gongcheng
Strengthened regulation on malicious rights protection based on squatted trade marks The CNIPA has also intensified its crackdown on malicious enforcement of trade mark rights. Some registrants understand the significant defects in their trade mark rights, but with the aim of seizing undue commercial benefits, still send warning letters, file AIC complaints, or ini - tiate trade mark infringement lawsuits against others’ legitimate use of trade marks. These registrants will face the following legal conse - quences as a result. • The court dismisses the trade mark infringe - ment lawsuit initiated by the trade mark squatter. The Beijing IP Court made such a ruling in the recent Tianjiao trade mark case. There have also been several similar rulings in Shanghai, Guangdong and other provinces. This represents a substantial change from the previous mainstream practice that courts supported formally valid registered trade mark rights and ordered innocent brand own - ers to cease use of their trade marks. • The court holds the trade mark squatter liable for unfair competition and orders the squatter to compensate the brand owner for its direct economic losses including the necessary expenses incurred in response to defending itself against the malicious prosecution. The Beijing IP Court made such a ruling in the Beijing WTOWN case and awarded damages of CNY0.5 million. Adjusted burden of proof for both parties in malicious cancellations For repeated bad faith non-use cancellations, the CNIPA is considering adjusting and balanc - ing the burden of proof for both parties. The CNIPA is looking to reduce the burden of proof on trade mark owners. The CNIPA, after fulfilling the notification obligation, will ex officio retrieve
the materials submitted by the registrant proving use in other similar cases in recent years and rely on this to maintain the registration. However, the CNIPA is also trying to place a heavier bur - den on the cancellation petitioners. They should submit preliminary evidence showing non-use of the trade mark in order to initiate the proceed - ing such as the results of online searches. If the use status shown contradicts the petitioner’s statement in the petition, the CNIPA will issue an amendment notice or even dismiss the can - cellation directly. Regulation on bad faith same-day filings The bad faith same-day filing means that some malicious entities rely on the same-day-filing procedure to delay the examination of oth - ers’ applications. With the same-day-filing, the applicants will go through the lot-drawing phase and the original three to six months’ procedure will be extended by six months to two years. In response to this issue, the CNIPA issued a guideline to regulate these malicious acts and is working on effective ways to expedite the examination of the same-day-filing. They will ex officio investigate and detect suspicious fil - ings and then reject the applications or work with the applicant to withdraw the applications. They also receive complaints from brand own - ers or any other entities. Meanwhile, an agency should report to the relevant department if it has accepted the entrustment of the parties with conflicts of interest in the same trade mark case. Under this regulation, we reported two inter - ested individuals sought same-day filings with the CNIPA and the Market Supervision Admin - istration (the “MSA”), which led to the expedited examination of one conflicting application and rejection of the other application. The MSA also penalised the individuals and the agencies who supported the filings.
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