CHINA: IP Agents Fined for Filing Coronavirus-Related Marks in Bad Faith in China

On March 4, 2020, China’s National Intellectual Property Administration (NIPA) instructed its local branches to strengthen measures against intellectual property (IP) agents who applied in bad faith for trademarks relating to COVID-19. Some agents have been fined with a maximum penalty of RMB 100,000 (approximately US $14,000), as stipulated under Article 68 of the Trademark Law.

Some IP agents have received requests to file applications for names made famous by the extensive news coverage in China, including:

• Lei Shen Shan or “Mountain of the God of Thunder,” the name of the field hospital built in Wuhan, the capital of Hubei province, in response to the COVID-19 outbreak;
• Huo Shen Shan or “Mountain of the God of Fire,” a second field hospital also built in Wuhan in response to COVID-19;
• Li Wen Liang, the Wuhan-based doctor and whistleblower who first revealed the emergence of COVID-19 in Wuhan but later died of the illness;
• Whistle Blower, a nickname for Doctor Li and other early reporters of the disease; and
• Zhong Nan Shan, the Chinese epidemiologist and pulmonologist who discovered the SARS coronavirus in 2003, and a prominent figure in the COVID-19 response.

China’s Trademark Office refused these applications quickly. Typically, refusal decisions would take at least half a year to deliver. NIPA published the refusals in two notices:

• Notice Regarding the 63 Refusal Cases of “Huo Shen Shan” and Other Trademark Applications Relating to the Epidemic with Bad Influence; and
• Notice Regarding the 37 Collective Refusal Cases of “Li Wen Liang” and Other Trademark Applications Relating to the Epidemic with Bad Influence.

“Bad Influence” under the notices refers to Article 10(1)(8) of China’s Trademark Law, which stipulates that names which are “harmful to socialist morality or have other bad influence” shall not be allowed for use as a trademark.

NIPA’s efforts did not end with a mere refusal. According to the sternly worded Notice Regarding Crackdown on Agency Behavior in Application for Abnormal Trademark Relating to the Coronavirus Pneumonia Epidemic, NIPA asked all its provincial branches to strengthen market supervision, to “name and shame” IP agencies that file “abnormal” trademark applications, and most of all, report them to relevant law enforcement.

Local law enforcement reacted swiftly. In Beijing, Chaoyang District Market Supervision Bureau fined an IP agency RMB 100,000 (approximately US $14,000) for filing “Lei Shen Shan” and “Huo Shen Shan” trademarks for its client. Similar penalties have been enforced in other local bureaus.

For the most part, China’s IP community has welcomed this approach to dealing with COVID-19-related filings made in bad faith. Some IP agents believe that a heavy-handed penalty against rogue agencies could reduce rampant trademark squatting in China. Other agents have expressed concern. In particular, the burden of proving that a trademark application is filed in good faith has somehow shifted from the applicant to the agent. For fear of joint liability with their clients, IP agencies in China are expected to keep a closer eye on malicious trademark filings.

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.

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