In China new laws will be applied for infringement and illegal or bad faith trademark application, effective as from November 1st, 2019. The aim is to reduce trademark "squatters" by imposing greater sanctions and enabling the national office to refuse such bad faith trademark filing.
On the one hand, the National Intellectual Property Administration of the People's Republic of China (CNIPA) may now reject bad faith applications without intent to use during examination.
On the other hand, Trademark Agencies will also be held responsible, as the new law requires them not to accept an engagement if they know or should know of the bad faith of the application. Moreover, agencies will be held liable for administrative sanctions, such as warnings and fines for trademark applications in bad faith and will be penalized by Courts for instituting trademark litigation in bad faith.
Another important change is that damages for trademark infringements will be significantly increased, namely statutory damages will be increased from 3 million to 5 million CNY and punitive damages are increased from 3 times to 5 times the damage of the plaintiff.
Finally, the new law also mentions the destruction of counterfeit goods, namely upon request of the right holder these must be destructed along with materials and tools with which the same are produced.
While there are still some uncertainties, especially as to how the term "without intent to use" for bad faith applications will be interpreted, this development seems to be a step in the right direction to help fight counterfeits and trademark infringements in one of the most counterfeit-prone territories and thereby broaden trademark protection for rightful right holders in China.