Trademark agencies fined for seeking to register names of Wuhan coronavirus hospitals in bad faith

China
  • Two trademark agencies have been fined for filing bad-faith trademark applications related to the Covid-19 outbreak
  • This is the first known case in which the local authorities have imposed such fines since new measures were introduced at the end of 2019
  • The move shows that China is taking the fight against bad-faith applications more seriously

 

Two Chinese trademark agencies have been fined Rmb100,000 (approximately $14,000) for representing clients to file bad-faith applications for the marks HUOSHENSHAN and LEISHENSHAN - the names of the hospitals built in the space of one week to treat coronavirus patients in Wuhan City. This is the first case known to the public in which the local authorities have imposed monetary punishment on trademark agencies for bad-faith filings following the amendment to the China Trademark Law and the release of the Measures on Regulating Bad-Faith Applications at the end of 2019. While this case is exceptional in that it relates to the Covid-19 outbreak, it still gives a positive signal that China is taking the fight against bad-faith applications more seriously.

Since the hospitals were built, the China National Intellectual Property Administration (CNIPA) has rejected dozens of LEISHENSHAN and HUOSHENSHAN marks during the initial examination phase on the grounds of “adverse social effect”. Moreover, the CNIPA published an article on its official website releasing to the public the particulars of the bad-faith applications, including the name of the applicants and trademark agencies. Ten days after the refusals were issued, the local authority decided to fine each agency Rmb100,000. The applicants will also be fined by the local authorities according to their registered address. This shows that China is launching a top-down campaign against bad-faith applications.

Of interest to the trademark community is how bad-faith applicants will be penalised in other cases. Although opposition and invalidation actions may be used to stop those bad-faith applications that have gone through the CNIPA’s initial examination, trademark owners often have to pay a much higher price to safeguard their rights. However, the penalties to be imposed by the CNIPA and the local authorities will dramatically increase costs for bad-faith applicants and their agents.

So what can trademark owners do? Filing third-party complaints with the CNIPA may be an option. In 2009 the State Administration for Industry and Commerce issued special measures to regulate trademark agencies, under which the maximum fine was only Rmb10,000. In the past few years, the CNIPA has reportedly rejected 100,000 bad-faith applications each year during the initial examination and opposition phases. According to a recent press release by the CNIPA, the authority encourages third parties to file complaints about bad-faith applications. Such complaints could include:

  1. a complaint letter;
  2. evidence of the complainant’s prior rights (ie, certificates of incorporation and trademark registrations); and
  3. the particulars of the bad-faith applications, especially the total number of alleged bad-faith applications, the repeated filing of refused marks, the filing history of affiliates, the similarity to prior marks and the CNIPA’s conclusion of bad-faith.

Notably, since 2016 the CNIPA has established an internal “blacklist” system to record bad-faith applicants. Filings by these applicants will be highlighted during the initial review procedure so that examiners can pay special attention. The monetary fine recently imposed on the two trademark agencies will add even more pressure.


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