The Chinese government recognises the importance of protecting IP rights and is taking proactive measures to combat the abuse of trademark registrations. Trademark squatting undermines genuine trademark owners’ rights and hampers fair competition in the market. Because of this, China’s National IP Administration (CNIPA) is clamping down on malicious trademark registrations with various strategies and measures.

One such measure is a more robust examination process for registration applications. By conducting thorough investigations and assessments, the CNIPA can identify suspicious applications and reject those that are deemed to be malicious or infringing on existing trademarks. This aims to block the registration of trademarks that may cause confusion or dilute the reputation of legitimate brands.

The main legal provisions that deal with combatting malicious trademark registration are Articles 4, 7 and 44.1 of the Trademark Law. With regard to Article 4, the CNIPA has stated that:

Individuals, legal persons, or other organisations engaged in production and business activities who need to obtain exclusive trademark rights for their goods or services should apply for trademark registration with the Trademark Office. Malicious trademark application for registration that is not intended for use should be rejected.  

Acts of malicious trademark registration

In the process of actual case examination, the CNIPA also refers to this provision to reject applications that it believes may constitute malicious registration without the intention of use. According to the 2021 Trademark Examination and Adjudication Guidelines, the following circumstances could be deemed acts of "malicious trademark registration applications not intended for use”, except when the party provides contrary evidence:

• filing a large number of applications that significantly exceeds the normal operational needs, lacks genuine intention of use and disrupts the order of trademark registration;
• filing many applications for trademarks that copy or imitate different parties’ marks that have a certain reputation or strong distinctiveness;
• repeatedly applying for registration of specific trademarks with a certain reputation or strong distinctiveness belonging to another entity;
• filing a large number of applications for trademarks that are identical or similar to others’ trade names, e-commerce names, domain names, influential product names, packaging, decorations, well-known and recognisable advertising slogans, designs and other commercial signs;
• filing many applications for trademarks that are identical or similar to the names of well-known figures, works or characters, or well-known and recognisable art works and other public cultural resources;
• filing a large number of applications for trademarks that are identical or similar to the names of administrative divisions, mountains, scenic spots or buildings;
• filing a lot of applications for trademarks that lack distinctiveness and are identical or similar to generic names or industry terms, or marks that directly indicate the quality, main ingredients, functions, uses, weights or quantities of the claimed goods or services;
• filing a large number of trademark applications and then transferring the marks to others, with the transferees being relatively dispersed;
• if the applicant intends to seek improper benefits, engages in large-scale sales and engages in coercive business cooperation, or demands high transfer fees, licensing fees or infringement compensation from the trademark's prior user or others; and
• other circumstances that can be identified as malicious trademark registration applications.

Malicious trademark applications not intended for use include trademarks that have been applied for by the applicants themselves and by natural persons, legal persons or other organisations that have colluded with – or have a specific relationship or connection with – the applicants.

Key takeaways

To determine whether it constitutes "malicious intent without the purpose of use", factors such as industry characteristics, the applicant’s business scope and qualifications, the overall situation of the numbers of applications, class, specific composition of the trademark signs, actual use of the mark and whether the applicant has previously engaged in malicious trademark registration and infringed upon the exclusive rights of multiple entities should be comprehensively considered. This ensures that trademark registration examination is conducted in a fair and orderly manner.