It happens to the best of us: Tesla, Cartier, Burberry, Hermes, Häagen Dasz. In recent years, each of these companies has been wrong-footed by Chinese hijackers who made off with their trademarks. What’s more, they each discovered how difficult it is to get your trademark back again in China. But maybe that’s now set to change with the introduction of the new Chinese Trademark Act on 1 November.
These trademark hijackers have one sole aim: to sell the trademark registration for as much money as possible. Obviously they have no plans to use the trademarks themselves. The Chinese hope their new law will now solve the problem. Article 4 of the Act states that trademark applications submitted in bad faith by those with no intention to use them will be turned down. The Article 4 can also be used as the basis for filing an opposition.
It will of course need to become clear in practice precisely what is meant by ‘bad faith’ and how it can be established. One important factor in any event is the reputation the trademark enjoys or the fact that the hijacker can be shown to own a large number of trademark registrations without valid reason.
As well as introducing an Article governing registrations in bad faith, the new Act also contains interesting extensions to the scope of fines and compensation for loss of earnings. All in all, then, it hopefully will soon make hijacking trademarks in China a lot less attractive and far less lucrative.