China – CNIPA: Cracking Down On “Low-Quality” Patent & Trade Mark Applications.

Recently, the China National Intellectual Property Administration (CNIPA) issued a notice on improvements made based on feedback from the 5th round of disciplinary inspections by the 19th Central Committee, which were carried out from May to July 2020. Rectifying measures made by the CNIPA can be summarised below:
 

1. Speeding up examination periods for patent and trade mark applications. Examination periods for high-value invention patents have been reduced to 14 months, while overall examination periods for invention patents have been reduced to 20 months. Average examination periods for trade mark registration were shortened to 4 months, less than half of its initial duration in the 13th Five Year Plan.
 

2. Improving the quality of examinations for patent and trade mark applications. Accuracy rates for invention patent examinations have reached 92.2% and spot checks for trade mark registration and examination have reached a 96.7% pass rate.
 

3. Cracking down on low-quality patent and trade mark applications. In 2020, around 14,600 bad faith applications without intention to use were rejected. In order to strengthen the control over low-quality applications, local governments are urged to optimise relevant policies to avoid the improper and uncontrolled grant of funds to companies to file applications.
 

4. Strengthening the management of trade mark procedures. The CNIPA will formulate the “Opinions on the Implementation of the Crackdown of Malicious Trade mark Applications” and establish a joint working mechanism to combat disorderly trade mark procedures. In March 2021, a special campaign was launched to crackdown on trade mark squatting, along with malicious behaviours that disrupt the order of trade mark registration and cause adverse social impact. The CNIPA will revise trade mark examination and adjudication standards and will solicit opinions from the public in the near future.
 

5. Advancing reforms to delegate power, streamline administration and optimise government services in intellectual property. By the end of 2020, the CNIPA imposed 71 administrative penalties against patent agencies with misconduct behaviours, with fines totalling more than RMB 3.1 million. The CNIPA also issued “Notice on the Crackdown of Abnormal Trade Mark Application Behaviours related to the COVID-19 Pandemic” in which 1,061 suspected illegal trade mark agency violations were screened and meetings with over 200 trade mark agencies were organized. More than 800 applications were withdrawn, 102 cases were officially filed for investigation, and 48 administrative penalties were imposed. Online platforms were given guidance in regulating intellectual property services. A large number of e-commerce websites suspected of promoting information on unqualified patent agencies were interviewed, with the links of 109 relevant merchants taken down, and 3,062 product links removed from 1,221 merchants. The CNIPA interviewed a number of intellectual property services and trading websites and removed a batch of suspected malicious trade mark applications not for use, involving nearly 2,500 entities.
 

6. Strengthen anti-corruption risk management in patent and trade mark examination. The CNIPA will intensify supervision and implementation on the recusal system in relation to CNIPA officers, the nomination of cadres whose spouse, children, and their spouses operate IP agencies, employment of retired or former CNIPA officers, their spouses and children to patent and trade mark agencies, and etc.

 

Our Take
 

We commend the CNIPA for their continuous efforts to improve the patent and trade mark system.  Statistics provide one form of empirical evidence by which to measure improvements but is by no means the only yardstick.  When it comes to the quality of examination, speed can be an impediment as examiners who are judged by this metric find that they will not be criticised for raising absolute and relative ground objections against trade mark applications by brand owners, however, unfounded.  It is also easy for supervisors who conduct the spot-checks to dish out a pass rate.  The shortened period of examination could have the opposite effect of creating unnecessary refusals which in turn increase the workload of the Trade Mark Review and Adjudication Board and Courts.  It is crucial that examiners are trained to become trade mark experts especially in the assessment of inherently registrability and the similarity of marks.
 

The number of bad faith applications that have successfully opposed or invalidated has increased.  However, there remains many instances of inconsistent decisions against the same applicant in different classes.  Thus, there is more work to be done.  Regretfully, the number of bad faith trade mark agencies continue to grow given that the industry is unregulated and the threshold for establishing and operating trade mark agencies is too low.  Moreover, there is still no efficient and effective procedure for filing complaints with the CNIPA or State Administration for Market Regulation.  It is also important that legitimate brand owners and their trade mark agents do not become the target for recrimination by these bad faith actors.