China is set to intensify its crackdown on trademark hoarding and misleading practices through a revision to the Trademark Law, introducing tougher penalties to maintain order in the sector, an official from the country”s top legislative body said on Monday.
Huang Haihua, spokesman for the Legislative Affairs Commission of the National People’s Congress Standing Committee, told a news conference that a draft revision to the law proposes higher standards and stricter procedures for trademark registration and use.
In accordance with the draft amendment, trademark applications filed without an intention to use the mark or beyond normal business needs will be rejected. Violators whose actions cause adverse effects may receive warnings from trademark authorities and face fines of up to 100,000 yuan ($14,752).
Huang said the draft also stipulates that a registered trademark that remains unused for three consecutive years without a legitimate reason will be revoked by trademark authorities.
The draft revision is scheduled for further review during a session of the NPC Standing Committee, which will run from Tuesday to Friday in Beijing.
“All these measures aim to ensure trademarks are genuinely used and to prevent their hoarding,” Huang said.
Malicious trademark registrations include conduct that violates the principles of legality and good faith, such as trademark hoarding and squatting, unauthorized appropriation, imitation, infringement of others’ prior rights, misuse of public resources, and large-scale or repeated bad-faith registrations.
“Trademarks serve to identify the source of goods and services and act as brand identifiers for businesses,” Huang said. “However, some companies exploit trademarks to mislead consumers, disrupting trademark administration and infringing on consumers’ rights.”
To address such irregularities, the draft proposes additional penalties. Applicants who knowingly register deceptive trademarks that could mislead the public about a product’s quality or place of origin and cause adverse effects may receive warnings and fines of up to 100,000 yuan.
The draft also seeks to improve reporting mechanisms, allowing any organization or individual to file complaints with trademark authorities over illegal trademark use that misleads consumers.
If a registered trademark is used in a misleading manner, trademark authorities may order corrective action within a specified period. Where illegal business turnover exceeds 50,000 yuan, a fine of up to five times the turnover may be imposed. If the turnover is less than 50,000 yuan, a fine of up to 250,000 yuan may be levied.
Failure to correct violations within the prescribed period could result in the revocation of the violator’s registered trademark, according to the draft.
In addition, the draft proposes regulating trademark use in cyberspace and strengthening oversight of trademark agencies, Huang said. It also includes provisions aimed at better protecting the rights and interests of Chinese enterprises expanding overseas.
The spokesman also revealed that China is developing a unified trademark registration and application platform to provide the public with easier access to trademark searches and related services.
