An increased rate of trademark applications can be a sign that a country has a robust climate for innovation. Other factors may be at play, however, in the sharp rise over the last few years in applications in the U.S. by businesses based in China. American entities should take note of the effects of this rise on the application process for everyone, and they should regularly review their own needs for new trademarks.
China's Trademark Policy
In 1989, recognizing the importance of trademark protection, China joined the World Intellectual Property Organization's Madrid System for the International Registration of Marks. In 2014, China instituted a major reform of its domestic trademark law, including new categories of trademark infringement, specialized courts, and more serious punitive damages.
Volume of Trademark Applications in the U.S.
Between 2014 and 2018 in the U.S., Chinese trademark filings increased from a little over 5,000 per year to 58,000. According to the World Trademark Review, Huawei's trademark portfolio includes almost 14,000 patents. Wang Shuyan (aka Shuyan Wang) has filed more than 30,000 Chinese trademark applications.
Concerned about the number of suspect Chinese trademark applications, the U.S. Patent and Trademark Office (USPTO) undertook a study of political (“non-market”) factors responsible for the trademark binge. In January 2021, the USPTO issued its report.
What's Driving China's Trademark Hyperactivity
According to the USPTO, Chinese regulators have expanded incentives for state-owned enterprises to register trademarks abroad.
In 2020 the Chinese government directed state-owned enterprises to increase their Madrid System trademark filings by 50%.
- Bad faith applications
Certain aspects of China's trademark law make it possible for bad-faith applicants to register a large number of marks.
- Unused trademarks
Some legitimate brand owners register marks in good faith as a defensive strategy to protect against bad-faith registration.
A consequence of the ramped-up pace of trademark applications in the U.S. by businesses based in China has been a slowdown in the processing of all applications by USPTO—the increased volume is weighing down the system. And China's heightened activity in this arena is a reminder for U.S. companies about the importance of trademarks.
Talk to a Professional
Mykyta Law provides comprehensive, high-quality legal services, including intellectual property law, to small, medium, and large businesses and business owners. Mykyta's experienced trademark attorneys are available to answer questions concerning trademark law and assist with trademark registration, trademark maintenance, and trademark monetization. To schedule an appointment with a Mykyta lawyer, call 646-884-3319.