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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True Value of Having a Chinese Law Firm by your Side

Whether you are an experienced or a new entrant, doing business or growing business in China, it is highly important to be able to point out the issues properly deal with these differences. The effect of increased wealth and consumer spend in China is already being felt around the world. Intellectual property rights is an area that has been notoriously difficult in China, although recent reports suggest this is an area that is improving the most. It is always a good idea to have a Chinese law firm by your side while doing a business in China.

 

Legal Protection Provided by the Chinese Law Firms

All the major global companies are looking to derive profit by selling their products and services to the Chinese people. However, they have to face challenges which are completely different from the one they face in other countries. Patent protection and other legal issues are some of the key areas of discussion. The Chinese law firms that offer exclusive patent protection consultation could play a vital role in safeguarding your business interests in China. Patent attorneys of Chinese law firms can greatly increase the corporate value of your company or brand. That’s why conducting thorough due diligence before appointing the right China patent lawyer is an important decision in terms of your business. You need to know more than where a patent lawyer went to school and what they studied.

 

IP and Trademark Protection Provided by the Chinese Law Firms

China is a modern country with a reasonably well-developed legal system. Receiving any kind of favor from the court should be done through the legal system only and not resorted the legal system of other countries. This is especially true for arbitration from foreign courts. Though some foreign organizations stick to rule number one, they often flout the second and third rule and use English as the court language. They argue that Chinese law allows for the foreign companies to choose their law as well as choose the language to sue the Chinese organization. Of course the law must be related to the business or the transaction made between the parties. The reason being that Chinese civil law drafters believe in party autonomy which empowers business parties to take decision pertaining to the business. However, the real world such decisions make even a written document unenforceable.

 

The infringement of intellectual property rights and other commerce-related rights such as trademark, patent or copyright and commercial secrets are quite common in China. Business owners from the U.S. and Europe need to be extra-cautious while doing business in China. An attorney of the Chinese law firm is the right person to rely on for all your legal aids.

 

Always remember to get the Chinese documents verified by your Chinese lawyer because there is a difference between the English and the Chinese versions. Moreover, the English version does not hold true in the Chinese court and hence getting it documented in Chinese is absolutely necessary. Also, they will require more time to prepare a contract that can protect both the parties and particularly the foreign party from ending up in a soup.

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