Bad-faith registration refers to the act of applying to register a trademark by improper means, either while knowing or having reason to know of another party's prior rights or prior-used trademark, or without any intent to use at all. It is jointly regulated by multiple provisions of the Trademark Law, including Articles 4, 44, 32, and 15.
Main Legal Forms
- Stockpiling registrations without intent to use (Article 4): applying for large numbers of trademarks clearly exceeding normal business needs, hoarding marks for sale, or encircling enterprises;
- Registration obtained by fraudulent or other improper means (Article 44(1)): applying with forged materials, mass-squatting others' well-known marks, or systematically free-riding on famous brands;
- Squatting a trademark that another party has used earlier and that has acquired a certain influence (latter part of Article 32);
- Squatting by agents, representatives, and parties in specific relationships (Article 15);
- Bad-faith registration imitating well-known trademarks (regulated in conjunction with Article 13).
How Bad Faith Is Found
The examining authorities typically find bad faith through a combination of subjective and objective factors:
- Objective conduct: the number of trademarks held is clearly disproportionate to the scale of business; a single trademark involves the well-known marks of multiple others; marks are peddled or assigned after registration; high fees are demanded; the same party's marks are repeatedly squatted;
- Subjective knowledge: the applicant has had contact with the prior rights holder through agency, distribution, contract manufacturing, or cooperation negotiations, or the prior mark is famous enough that knowledge should be presumed;
- Distinctiveness and fame of the prior mark: the stronger the originality and the higher the fame of the mark, the less likely a coincidental clash, and the more inclined the authority is to find bad faith.
Legal Consequences of Bad-Faith Registration
- At the application stage: the application may be refused by CNIPA under Articles 4, 19, and others;
- At the announcement stage: anyone may oppose on absolute grounds, and prior rights holders may oppose on relative grounds;
- After registration: the trademark may be declared invalid; the absolute-grounds path is not subject to the five-year limit, and the owner of a well-known trademark is likewise not bound by the five-year limit against bad-faith registrations;
- Where a registration is declared invalid, a registrant who acted in bad faith shall compensate others for the losses caused (Article 47).
Relationship with "Squatting"
Squatting is the most typical subset of bad-faith registration, focusing on the act of "registering another's prior mark first"; bad-faith registration has a broader extension, also covering stockpiling without intent to use and registration by fraudulent means, which need not target any specific prior mark. In practice the two terms are often used interchangeably.
Practical Significance
For rights holders: proving bad faith is a key variable for raising the success rate of oppositions and invalidations—evidence should be organized around "abnormal patterns in the other party's conduct + knowledge of your mark". For applicants: avoiding excessive applications within a short period, steering clear of others' well-known marks, and retaining evidence of design origins are the basic steps to avoid being labeled as acting in bad faith.
The application of these concepts in practice involves detailed differences; before proceeding, you may consult a registered agent on MyTMBee for a targeted analysis.