Bad-faith trademark applications are the target of the new regulation introduced into Article 4 of the Trademark Law by the 2019 amendment. The term specifically refers to filing large numbers of trademark applications for the purpose of hoarding or reselling, rather than based on genuine business needs, thereby improperly occupying trademark resources and disrupting the registration order. Assessing such conduct looks at the overall pattern of the application behavior, not at whether a single trademark resembles someone's mark.
Legal Basis and Assessment Factors
The first paragraph of Article 4 of the Trademark Law provides: a natural person, legal person, or other organization that needs to obtain the exclusive right to use a trademark for its goods or services in the course of production and business activities shall apply to CNIPA for trademark registration. Bad-faith trademark applications not intended for use shall be refused.
This provision applies throughout the entire process: it supports outright refusal at the examination stage, serves as a ground for opposition during the announcement period, supports a request for invalidation under Article 44 after registration, and CNIPA may also declare the registration invalid on its own initiative.
Article 8 of the Provisions on Regulating Trademark Application and Registration Behavior (SAMTI Decree No. 17) specifies factors the trademark registration authority may comprehensively consider:
- The number of trademarks applied for by the applicant or by natural persons, legal persons, or other organizations associated with it, the designated classes, and the circumstances of trademark transactions;
- The industry in which the applicant operates and its business condition;
- Whether the applicant has been determined by effective administrative decisions or rulings, or by judicial judgments, to have engaged in malicious trademark registration or in infringing others' exclusive trademark rights;
- Whether the applied-for trademark is identical or similar to another's trademark with a certain degree of fame;
- Whether the applied-for trademark is identical or similar to the name of a well-known person, an enterprise trade name, the abbreviation of an enterprise name, or other commercial signs;
- Other factors the trademark registration authority deems relevant.
Common Application Scenarios
Typical patterns found in examination practice to fall within this conduct include: an enormous number of applications obviously exceeding the needs of normal business activity and lacking genuine intent to use; massive copying, imitation, or plagiarism of well-known trademarks of multiple rights holders; repeated applications targeting a specific well-known trademark of the same rights holder; bulk applications for signs similar to others' enterprise trade names, abbreviated enterprise names, e-commerce store names, domain names, or product names, packaging, or trade dress with a certain influence; bulk applications for signs similar to the names of well-known persons or of well-known works or characters; and bulk registrations followed by scattered assignments, or demands for high assignment fees or licensing fees from prior users.
Distinction from "Malicious Squatting"
Both involve "malice," but they point in different directions:
- Bad-faith trademark application (Article 4): the core feature is bulk applications "not intended for use," which disrupt the registration and administration order and harm the public interest, falling within the category of absolute grounds;
- Malicious squatting: the core feature is riding on famous brands and chasing hot topics, harming the civil rights of specific parties, and it mainly engages relative-grounds provisions such as Articles 15 and 32 (for example, squatting another's trademark that has already been used and has gained a certain influence).
Where a maliciously squatted trademark is large in number, improperly occupies trademark resources, and disrupts the registration order, Article 4(1) and the relative-grounds provisions may apply cumulatively.
Legal Consequences
In addition to refusal of the application, refusal of registration, and invalidation, bad-faith applications may also face administrative penalties. Article 68(4) of the Trademark Law provides the superior-law basis for penalties, and Article 12 of the Provisions on Regulating Trademark Application and Registration Behavior stipulates that the county-level or above market supervision and administration department where the applicant is located or where the violation occurred shall impose administrative penalties such as warnings and fines according to the circumstances; where there are unlawful gains, a fine of up to three times the unlawful gains, capped at RMB 30,000, may be imposed; where there are no unlawful gains, a fine of up to RMB 10,000 may be imposed. A trademark agency that knows or should know that its client falls within the relevant circumstances and nevertheless accepts the engagement bears liability as well.
Practical Points and Common Pitfalls
One pitfall is equating "a large number of registrations" directly with bad faith. It is normal for an enterprise to file multiple trademark applications for a brand matrix and defensive purposes; the key is whether there is genuine intent to use and actual business need, and whether the filings match the actual scale of operations and the scope of business.
Another pitfall is believing assignment can launder the taint. The provisions make clear that the assignment of a trademark does not affect the assessment of malicious registration; assignment after registration cannot cut off the unlawfulness.
For small and medium-sized enterprises operating normally, two practical reminders: first, align trademark applications with your own business—apply as needed, use genuinely, and protect reasonably, to avoid unconsciously falling into the pattern of bulk applications; second, if you find your brand or trade name has been bulk-registered by others, you may directly file an opposition or request invalidation on the basis of Article 4—this path is not subject to the five-year limit and does not require you to prove that you are the prior rights holder.
How these concepts apply in specific cases still involves detailed differences; you may consult a registered agent via MyTMBee for case-specific analysis.