I. CONTINUED AND INCREASING EFFORT IN TACKLING TRADEMARK SQUATTING
Following the amendment of the Trademark Law in 2019, the China National Intellectual Property Administration's ("CNIPA") took the initiative to reject over l 0,000 trademark applications for lack of intention to use based on Article 4 of the Law in the first half of 2021. It was reported that the CNIPA blacklisted around 1,000 applicants as of May 2021 and would continue the effort to identify and add applicants with obvious bad faith to the internal blacklist. While there is still no published mechanism for adding squatters to the blacklist, if brand owners have already received favourable decisions recognising squatters' bad faith, they may consider writing to the CNIPA to request that the squatters be added to the blacklist.
II. CLOSER SCRUTINY ON TRADEMARK ASSIGNMENTS
Trademark assignments only take effect after approval by the CNIPA. Article 42 of the Trademark Law confers the CNIPA the power to disapprove assignments that would easily cause confusion or have other adverse effects. Previously, the CNIPA mainly raised objections if similar marks covering similar goods/services are not assigned together pursuant to Article 31 of the Implementing Rules. However, to curb trademark squatting, we have recently seen more cases whereby the CNIPA relies on Article 42 to reject assignment applications if assignors have registered many trademarks and the assignments are suspected to be for profit. In such cases, assignors and assignees will be required to provide use evidence or to show the intent to use the assigned trademark(s). When negotiating buybacks, it is advisable to include clauses in the assignment agreement to deal with the consequence of non-approval of assignment (e.g. concerted effort to respond to objections and voluntary surrender of the trademark(s) if assignment is finally disapproved) and to file back-up trademark applications.
