How to Deal with the Bad Faith Filings of Trademark Registration in China

Trademarks can appreciate in value over time. The more your business reputation grows, the more valuable your brand will be. It is of prime importance for the foreign companies doing business in China to register their trademark. Having a registered trademark in China will enable you to have the rights that all the products registered under your ownership. A registered trademark is a legal mark that the item belongs to you and you have the authority to sell, modify or use the commodity in whichever way you want.

Foreign applicants without residency or place of business in China are required to submit trademark applications through a local Chinese trademark agent who will deal directly with the CTMO. The China Trademark Office or CTMO has issued requirements that must be met in order to approve your trademark application in China. Trademarks are also useful for protecting the interests of consumers. When businesses are responsible for any products or services bearing their trademark, they tend to take more pride in products. To maintain a good reputation, trademarked companies will often work harder to provide quality services and products.

As stipulated by the China Trademark Law, An unregistered well-known trademark can be protected against copy or imitation by a third party on similar goods/services, through oppositions or invalidations. China has had specialist IP tribunals in the Chinese courts to deal with patent (and other IP-related) cases.

 

Article 4 – rejection of bad faith filings at the initial examination stage

 

The new provision added to Article 4 says: “malicious trademark registration without an intention to use should be rejected.” In order to remove the phenomenon at its source, the new amendment empowers the China Trademark Office (TMO) to deny bad-faith filings at the initial examination stage.

 

Sanctions against bad faith filings and trademark litigation instituted in bad faith

A trademark agency that assists with bad faith filings in violation of Article 19 is also subject to administrative penalties including warnings and fines, which can be imposed on both the agency and the responsible officers.

 

Are there any benefits from a pre-filing use of the trademark?

The benefits from a pre-filing use are minimal since rights are obtained via registration. However, the applicant can use this to demonstrate the mark’s distinctiveness and overcome opposition on the ground of non-distinctiveness.

 

According to the new trademark law, the cap amount of punitive damages for willful trademark infringement will be increased from “three times” to “five times” the amount of the actual losses suffered by the right owner. The upper limit of statutory damages will be raised from RMB 3 million to 5 million yuan. A valid trademark can be bought, sold, licensed, and used as a security interest for acquiring a business loan. A registered trademark is essential if a company wants to raise funding, expand, merge, or sell.

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Know the Best Possible Ways to Avoid Trademark Violation Lawsuit in China

Trademark violations in China are often result in lengthy, expensive and resource-intensive lawsuit. Accurate China trademark search is the most important starting point of your business. Before you start using the trademark, it is vital to conduct trademark availability assessment and clearance. Only after doing this, a China trademark attorney can advise you whether the mark is legally safe to use or not. In this blog, we are trying to give you a complete picture on how you can easily avoid damaging and costly trademark violation lawsuit in China.

 

Know What Counts as Trademark Infringement in China

In the opinion of China trademark lawyers, foreign businesses need to know what exactly trademark infringement means in China. Only after knowing the proper nature of trademark infringement, one can take right actions. Trademark infringement is when a business uses the name, logo, or domain name of another business without authorization, or uses one that is similar enough to potentially confuse consumers. Trademark owners can take legal action if they believe their marks are being infringed. If infringement of a trademark is proven, a court order can prevent a defendant from using the mark, and the owner may be awarded monetary relief. Unlike the United States and other European countries, in China there is no prior-use or intent-to-use requirement needed before registering a trademark nor are common law rights recognized. China recognizes a “first to file” system, which generally means that the trademark right belongs to the first person who properly registers the mark in China. In other words, any party, whether it intends to use the mark in the stream of commerce, may register a trademark in China. Quick registration of trademark in China offers you strategic advantage.

 

Perform a Flawless China Trademark Search

When considering a new trademark, perform online China trademark search to determine whether others use that mark, registered that mark, or applied for a registration. Before you settle on a name, logo, or domain name, make sure it is not already trademarked. Check for the exact name you want to use, as well as similar names.

 

Always Keep China Trademark Attorneys by your Side-

Instead of doing anything by yourself, it is always safe to seek advice from the expert China trademark lawyers. Specialist trademark attorneys have better resources and efficiency to perform a flawless China trademark search. It will also likely cost you less to pay a professional to do a search than it is to defend an infringement that may result in expensive legal battle. If you decide to adopt a proposed trademark, but then obtain a cease and desist demand or threat of lawsuit, work with litigation counsel to understand litigation and potential damages risk. There is no algorithm to determine infringement. It is subjective. The subtleties in this subjective test are not always intuitive and going it alone may only add to the likelihood of confusion.

Trademark has a value not only to the owner due to its distinctiveness but also to customers who associate this trademark to a specific product or service. That’s the reason before you invest in a new brand, have a trademark attorney perform a trademark availability assessment or trademark clearance analysis for you.

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