Part IX of the interpretation series on China’s Standard for Determining General Trademark Illegalities focuses on Articles 33 and 34: which effective decisions or rulings may China’s trademark enforcement authorities refer to when handling malicious trademark applications, and how are the legal basis and penalties defined? This article reviews two typical cases — the “Huoshenshan” trademark case and a mass bad-faith filing case — and distills practical takeaways for applicants and trademark agencies.
1. Article 33: The Reference Basis for Handling Malicious Trademark Applications
Article 33 provides that when handling malicious trademark applications, trademark enforcement authorities may refer to effective decisions or rulings issued by the China National Intellectual Property Administration (CNIPA) that find a trademark application or registration contrary to Article 4, Article 10(1)(8), Article 13, Article 15 or Article 32 of the Trademark Law, or falling under the circumstance of “obtaining registration by deception or other improper means” under Article 44(1), and shall decide in light of the specific circumstances of each case.
Why an effective CNIPA decision or ruling is required
Unlike the unlawful use of trademarks under Article 10, which can be dealt with directly, handling malicious applications generally requires an effective CNIPA decision or ruling as supporting evidence. Such a decision or ruling is not by itself sufficient to conclude a case — the specific facts must also be considered.
The relevant provisions of the Trademark Law
The reference basis covers six scenarios: bad-faith applications not intended for use (Article 4); signs with adverse effects (Article 10(1)(8)); copying or imitating well-known marks (Article 13); applications filed by agents or representatives without authorization (Article 15); prejudice to prior rights or pre-emptive registration of marks already in use with certain influence (Article 32); and registration obtained by deception or other improper means (Article 44(1)).
2. Legal Basis and Penalties
Article 68(4) of the Trademark Law
Whoever maliciously applies for trademark registration shall be given a warning, a fine or other administrative penalties according to the circumstances; malicious trademark litigation shall be punished by the people’s court according to law.
Article 12 of the Provisions on Regulating Trademark Application and Registration
Applicants who maliciously file trademark applications in violation of Article 3 shall be given a warning or a fine by the market supervision authority at or above the county level where the applicant is located or where the violation occurred. Where there are illegal gains, a fine of up to three times the illegal gains and not more than RMB 30,000 may be imposed; where there are no illegal gains, a fine of up to RMB 10,000 may be imposed.
3. Two Typical Cases
Case 14: The “Huoshenshan” trademark application case
During the COVID-19 outbreak in 2020, CNIPA rejected 63 bad-faith trademark applications including “Huoshenshan” and “Leishenshan”. The Shanghai market supervision authority opened an investigation based on CNIPA’s public notice and referred case leads. After consultation at successive levels, applying to register the “Huoshenshan” mark was found to constitute both a sign with adverse effects under Article 10(1)(8) and an act prejudicing the hospital’s prior name right under Article 32. In April 2021, the applicant was fined RMB 10,000, while the trademark agency and its responsible person were respectively warned and fined RMB 80,000 and RMB 5,000.
Case 15: Mass bad-faith filing by six shell companies and their agency
From 2018, six companies including Shanghai Maiqian Trading Co., Ltd., together with an IP agency, used fee-sharing arrangements to conduct trademark applications and transfers without any intention of use: none of the six companies actually operated or used their registered trademarks; from November 2019 to the discovery of the case, they filed 1,058 trademark applications and obtained 504 registrations, transferring marks for profit through online platforms and social groups. In December 2021, the authority found the conduct violated Article 4(1) of the Trademark Law, gave warnings to all six companies, confiscated illegal gains of RMB 23,000 and imposed fines totalling RMB 95,000; the agency was handled in a separate case.
4. Practical Takeaways for Applicants and Agencies
- Mass filings without any intention of use are high-risk: even if some applications slip through, they may later be found malicious and lead to administrative liability.
- A rejection decision may be followed by administrative penalties: CNIPA rejection decisions and effective rulings can become leads and evidence for enforcement cases.
- Agencies bear responsibility too: agencies and their responsible persons may be warned and fined for representing obviously bad-faith, mass hoarding applications.
- Prior right holders should actively defend their rights: where hospital names, trade names or marks with certain influence are pre-emptively registered, they may assert their rights before CNIPA and push for follow-up enforcement.
5. FAQ
1. What legal provisions govern the handling of malicious trademark applications in China?
Article 68(4) of China’s Trademark Law and Articles 3 and 12 of the Provisions on Regulating Trademark Application and Registration. Enforcement authorities may refer to effective CNIPA decisions or rulings finding applications or registrations contrary to Articles 4, 10(1)(8), 13, 15 and 32, or Article 44(1), of the Trademark Law, and decide each case on its facts.
2. Why is an effective CNIPA decision or ruling usually required as supporting evidence?
Because determining bad faith involves examination and entitlement judgments, enforcement authorities generally rely on effective decisions or rulings issued by CNIPA as supporting evidence. Such decisions or rulings are not sufficient on their own; the specific circumstances of each case must also be considered.
3. What administrative penalties can malicious trademark applicants face in China?
Warnings and fines imposed by the market supervision authority at or above the county level where the applicant is located or where the violation occurred. Where illegal gains exist, a fine of up to three times the illegal gains and not more than RMB 30,000 may be imposed; where there are no illegal gains, a fine of up to RMB 10,000 may be imposed.
4. Can trademark agencies be penalized for participating in malicious applications?
Yes. In the typical cases, the agencies and their responsible persons were also warned and fined. Agencies should perform due diligence and refuse to file obviously bad-faith mass applications made without any intention of use.
6. Source and Further Reading
Source: China National Intellectual Property Administration (CNIPA), “Understanding and Applying the Standard for Determining General Trademark Illegalities (Part IX)”, published November 18, 2022. Read the original
Further reading: Trademark Classification in China | Patent Annuity Monitoring
This article introduces the intellectual property system of the People’s Republic of China (China). For specifics, please refer to the latest official regulations.