“These changes are a direct response to emerging issues in China’s trademark practice, including bad-faith filings, trademark hoarding, idle registrations, improper use of registered marks, online evidence of use, nascent commercial signs and the conduct of trademark agencies,” said Mingming Yang, a partner at Wanhuida Intellectual Property in Beijing. “It pivots from a lopsided registration-oriented system to a more balanced regime that underlines the significance of actual use, enforcement and responsible assertion of rights.”
“With that being said, the final text is more restrained compared to the draft amendments,” he added. “For example, although the suspension mechanism has been extended to opposition, refusal review, review of non-registration decisions and invalidation proceedings, the final text makes it a choice of the authority, rather than a mandatory process. Similarly, while the law strengthens the regulation of bad-faith filings and introduces administrative liability for certain conduct, it does not subject bad-faith squatting to civil liability. Issues such as trademark coexistence, the ownership of preempted mark, and the boundaries of improper trademark litigation will still need to be sorted out through further clarifications in the future.”
Practical impact
According to Yang, for local and foreign applicants, the impact on day-to-day trademark examination is less dramatic than expected. “The fundamental features of the Chinese system, including the first-to-file principle, examination on absolute grounds, conflicts with prior rights, opposition, invalidation and cancellation, remain in place. For applicants with genuine business needs and well-formulated filing strategies, the system should remain broadly stable and predictable.”
Applicants should expect closer scrutiny over the commercial rationale behind their filings and the actual use of their registered marks.
“First, a trademark filing should be justified by the applicant’s actual business, business plans, brand extensions, defensive needs or market strategy,” he said. “The new law does not rule out reasonable defensive filings. However, applications that are irrelevant to the applicant’s business needs, lack any intention to use, or appear to be squatting, hoarding or free-riding on another party’s goodwill will carry greater risk.”
He continued: “Second, post-registration compliance will matter more than ever. Brand owners should make sure that the mark as used is consistent with the registration, that changes to the registrant’s name or address are recorded in a timely manner, that license agreements contain appropriate quality control provisions, and that advertising, packaging, ecommerce promotion, livestreaming scripts and distributor materials do not mislead consumers, as the misleading use of a registered trademark may be subject to rectification, fines and, in case of failure to rectify, cancellation of the registration.”
“Third, the opposition period will be shortened from three months to two months. Brand owners will need to act faster. This is particularly important for multinational companies, where internal reporting and approval processes often take time,” he noted. “Overall, applicants and brand owners who file in good faith, use their marks genuinely and manage their portfolios properly should benefit from the new law. With the rising standard for trademark management, focus should be shifted to the commercial justification of filing activities, proper use of the mark, preservation of evidence of use, and the planning and execution of proportionate enforcement.”
- Excel V. Dyquiangco
