Surge in Trademark Squatting After the Tokyo Olympics
In the wake of Chinese athletes’ excellent performance at the Tokyo Olympic Games, trademark squatting surged. Applicants attempted to exploit athletes’ names and related terms. The China National Intellectual Property Administration (CNIPA) cracked down on squatters and rejected 109 applications. Both the squatters and their representing agencies were publicly listed.
Chinese Courts Target Bad-Faith Trademark Applications
Chinese authorities and courts are increasingly targeting bad-faith trademark applications. Nevertheless, some bad-faith applications matured into registrations. Owners of these defective trademarks sometimes enforce them against victims of the bad-faith filings. Such owners are categorized as IPR abusers.
Now the Supreme People’s Court permits victims or defendants to claim compensation for reasonable expenses. This change makes it harder for abusers to profit from trademark squatting. Instead, squatters must compensate victims if they maliciously initiate lawsuits.
The new interpretation makes trademark squatting and IPR abuse less profitable and riskier. This development should help purify the intellectual property environment in mainland China.
CNIPA Considers Changes to Trademark Fee Structures
CNIPA’s current fees were set very low to ensure applicants were not excluded from filing trademarks. However, these low fees dramatically increased trademark filings and piracy. To reach a more optimal fee rate, CNIPA sought public input on fee structures.
On August 25, CNIPA officially responded to proposals from the All-China Federation of Industry & Commerce (ACFIC). The agency suggested several potential changes to Chinese trademark law.
Proposed Reforms to Chinese Trademark Law
- Limit entities qualified to file trademark opposition and invalidation actions to prevent bad-faith oppositions. CNIPA also suggests allowing third-party opinions and adding proof requirements for non-use cancellation applicants.
- Raise the threshold for filing oppositions. CNIPA will consult other authorities about trademark fee structures and new compensation liability rules.
- Improve the delivery procedures for opposition documentation.
- Publicize evidence and hold hearings in opposition proceedings.
- Strengthen crackdowns on bad-faith applications and representation. The goal is to build a fair, honest, and credible market environment.
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