China introduces new regulation tackling bad faith trade marks… and who is Jing Hanqing?

As a key point of the Chinese government’s initiative to curb the proliferation of bad faith trade mark applications, Several Provisions for Regulating Application for Trade Mark Registration (规范商标申请注册行为若干规定, hereinafter referred to as ‘the Provisions’) will go into effect as of 1 December 2019. The full text (in Chinese, Google translatable) has been published on the China National Intellectual Property Administration official website (CNIPA, which used to be SIPO). 

The Provisions are intended to achieve the following: 

1. Strengthening the principle of good faith by (1) summarising and listing prohibited behaviours that are scattered in several provisions of the Chinese Trade Mark Law under Article 3; (2) holding accountable not only applicants, but also agents who facilitate activities that violate the principle of good faith (Article 4).

2. Enumerating the factors to consider to detect bad faith applications in Article 8, e.g. the number of applications, designated classes and the status of trade mark transactions. This is a welcome move as it enhances the transparency and operability of trade mark reviewing. 

3. Strict punitive measures might be imposed on both applicants and the agencies representing them. Specifically, in terms of monetary punishment, bad faith applicants could be fined up to three times their illegal gains (no more than CNY 30,000) and agencies that facilitated bad faith application activities could be fined up to a maximum of CNY 100,000. In severe circumstances, the agency may be ordered to suspend their business as well (Article 13); Non-monetary punitive measures include but are not limited to publishing the penalty information via the national enterprise credit information publicity system (Article 14) and authorities may conduct the rectification inquiry with the responsible persons from the agencies (Article 15).

Jing Hanqing

In addition to the Provisions, CNIPA published an accompanying Q&A (in Chinese, Google translatable), in which a specific individual’s name was mentioned in Question 5: ‘The recent bad faith trade mark applications, especially the name of the well-known internet celebrity Jing Hanqing was maliciously squatted, have caused widespread public attention. How should we deal with bad faith trade mark applications?’ 

Before finding the answers, this Kat was wondering who Jing Hanqing is and what happened to him. The curious inquiry led to an absorbing story… 

Jing Hanqing (敬汉卿) is a famous vlogger at a video sharing website called Bilibili. He had 6.62 million followers as of 30 October 2019. 

In May 2018, a trade mark application for 敬汉卿 (yes, this is identical to the three Chinese characters shown in the paragraph above) was filed by Zhiqiao Electronic Products Sales Department (‘Zhiqiao’) in class 41 for services of entertainment, video production and downloading (application no 31259902). The application was approved on 28 February 2019. This looked like just another ‘normal’ trade mark squatting story, at least until August 2019, that is when Jing Hanqing received a ‘trade mark infringement notice’ sent by Zhiqiao.

The notice asked Jing Hanqing, in an unquestionable tone, to stop infringing the 敬汉卿 trade mark registration. In other words, Jing Hanqing must stop using his own name on all media, including WeChat and Tencent, or Zhiqiao would enforce its exclusive trade mark rights. 

Shocked, Jing received a follow-up email from Zhiqiao, informing him that the trade mark had been resold at a profit several times and advising him to ‘deal with this matter wisely’. 

Considering the high costs in terms of time, energy and money in safeguarding certain rights, the so-called ‘wise solution’, or rather the usual practice, is paying off the ‘evil doers’ and having ownership of the trade mark transferred. By doing this, disputes are settled. In the meantime, however, such compromises eventually tip the scales of power in favour of ‘the dark side’. 

Unlike other peacemakers, Jing did not follow the usual procedure. Instead, he posted a video and ranted to an audience of millions. The video rapidly became viral and triggered extensive discussions – this may explain why he has become an icon in the fight against bad faith trade mark applications.

The strong pressure of public opinion drove Zhiqiao to eventually withdraw the said trade mark registration. 

Comment

Trade mark squatting is a topic of platitude already. Normally, through early application (roughly speaking, China has a ‘first-to-file’ system for trade mark registration), or more actively, by applying for invalidation or cancellation of the pre-emptively registered trade mark, one can formulate an effective countermeasure against squatters. 

What Jing Hanqing encountered was an escalated version: it seems absurd for an individual to be pre-emptive enough to file a trade mark application for their own name, just for the purpose of not being asked to stop such use. In this sense, the Provision provides practical guidance. Together with the revised Trade Mark Law of China (which has just taken effect as of 1 November 2019), the upgraded legal framework is expected to prevent bad faith applications more effectively. 

On the other hand, this Kat cannot ignore the clouds of doubt forming. For instance, the biggest problem may be Article 2 of the Provision which reads as follows:

When applying for a trade mark registration, an actual need for the exclusive right to use the trade mark for goods or services in production and business activities is required and shall not harm the existing prior rights of others. (emphasis added)

As known, when it comes to the acquisition of trade mark rights in China, and in fact in many other jurisdictions, e.g. under European trade mark law, registration itself suffices. That is to say, whether the mark is actually used or not is of no relevance at the stage of application, nor does the ‘actual need’ serve as a condition for obtaining registration—curbing bad faith trade mark applications shall not be at the expense of the consistency of Trade Mark Law. Hence, there is perhaps still room for improvement and a more elaborate revision of the Provisions. 

Photo credits: Tiandian Ma