In January 2021, the China National Intellectual Property Administration (CNIPA) issued a Notice introducing further strict regulation of patent applications (the Notice). It reflects a focus on quality rather than quantity, aiming to improve the quality of patent applications by eliminating irregular applications. It also provides for the elimination of all monetary subsidies for patent applications by the end of June 2021. The scope of the existing local funding should be limited to granted invention patents (including invention patents authorized overseas through PCT and other means), and the funding should be in the form of post-grant subsidies. All local post-grant funding should be gradually reduced, and cancelled by 2025.
Following the issue of a draft Regulation for comment in February, on 12 March 2021 the CNIPA released the Regulation on Patent Application Activities, with immediate effect. The Regulation sets out some of application activities that will be considered ‘irregular’:
- filing, simultaneously or successively, a number of applications for the same invention, or for a simple combination of different features or elements of the invention;
- fabricated, forged or altered content relating to the invention creation, experimental data or technical effect, including plagiarized or reworked prior art, in the submitted patent application;
- applications that are obviously inconsistent with the applicant's actual R & D capability and resource conditions;
- applications based on data generated randomly mainly by computer program or other technology;
- applications not based on technical or design improvement; applications not aimed at protecting innovation, but at reducing the scope of protection of prior art; and applications relying on improper means to overcome Patent Office objections ;
- multiple bad faith applications submitted separately, successively or in different places in order to avoid the regulatory measures aimed at cracking down on bad faith patent applications;
- patent applications or granted patents bought or sold, or with false change of inventor or designer, not for the purpose of exploiting the patented technology, design, or other legitimate purpose;
- patent agencies, patent agents, or other organizations or individuals acting as agents, inducing, abetting, helping others or conspiring with others, to implement an irregular patent application; and
- other irregular patent applications and related behavior that violate the principle of good faith and disturb the normal order of patent work.
Trademark Agency Fined for Bad Faith Trademark Application
The Yixing Market Supervision Administration in Jiangsu province conducted an on-site inspection of the business premises of a private trademark agency, Yixing Chuangming Trademark Office Co., Ltd. (Chuangming). Chuangming had filed 66 applications on behalf of its client, a brand management company, Yixing Yangming Brand Management Co., Ltd. (Yangming), knowing that the applications were malicious and that Yangming had no intention to use the marks. The applications were for registration in eight international classes (19, 20, 21, 30, 35, 41 and 43 And 44). Chuangming’s conduct contravenes Article 4 (1) of the Several Provisions on Standardising Application for Trademark Registration, which provides that trademark agencies must adhere to the honesty and integrity principle: “Where a trademark agency is or should be aware that the entrusting party falls into any of the following categories, it shall not accept the entrustment to apply for trademark registration: (1) malicious application for trademark registration without intention of using it as stipulated in Article 4 of the Trademark Law”.
The Yixing Market Supervision Administration gave warning to the parties and imposed a fine of CNY 10,000 (Approx. USD 1,538).
BURBERRY Granted Preliminary Injunction against BANEBERRY in Trademark Infringement and Unfair Competition action
Burberry Limited (Burberry), the well-known British luxury fashion house, discovered that a Chinese company, Xinboli Trade (Shanghai) Co., Ltd. (Xinboli), had registered and was using the mark Baneberry, along with other marks similar to Burberry's registered marks, including the Burberry check mark, on and in relation to its clothing products. Further, it had imitated the style and design of Burberry's clothing, as well as the shape of product hangtags and packaging bags, and even used the British Royal warrant, which signifies that products have been supplied to a member of the Royal Family. It also made misleading statements about the company’s history. Burberry filed a trademark infringement and unfair competition action with the Suzhou Intermediate People's Court of Jiangsu Province and applied for a preliminary injunction.
In terms of the likelihood of infringement, the Court held that, ‘Burberry’ and other marks used by the company are very well known to consumers in China, and qualify as well-known trademarks. Although the trademark used by the Defendant is a registered trademark, Burberry’s marks were well-known in China before the date of application of the allegedly infringing trademark. Based on the application for registration, and Xinboli’s conduct and use of the alleged infringing trademark, it is apparent that the alleged infringing trademark was registered in bad faith; therefore, although it has been registered for more than five years, it is not subject to the five-year time limit for invalidity. The Court ruled that the Defendant’s behavior was likely to constitute trademark infringement and unfair competition.
As for the urgency of the injunction, the Court held: first, the scale of the infringement is huge and failure to take immediate action would cause irreparable damage to Burberry’s legitimate rights and interests; secondly, the alleged infringement is likely to lead to confusion and misunderstanding among consumers, seriously detracting from the company’s goodwill and weakening the distinctiveness of Burberry’s well-known trademarks; and thirdly, the annual Spring Festival holiday and peak sales season is approaching.
Thus, the Court granted an injunction restraining Xinboli from use of the allegedly infringing trademarks.
BURBERRY 诉 BANEBERRY 获其在华首例禁令
（alleged infringement trademark）
CNIPA Reports on Achievements of its ‘Blue Sky’ Campaign
The China National Intellectual Property Administration (CNIPA) launched its ‘Blue Sky’ campaign two years ago, with the aim of cleaning up and improving IP agency services. Since then it has severely cracked down on irregular trademark and patent application agency behavior, and strengthened the supervision of agencies.
It recently reported that during the two years of the ‘Blue Sky’ campaign, 2,950 patent and trademark agencies were questioned and 1,095 ordered to rectify their practices; 330 cases were filed and investigated; and 182 administrative penalties imposed.