According to Article 4 of the Trademark Law, if a natural person, legal person or other organization needs to obtain the exclusive right to use a trademark for its goods or services in its production and business activities, it shall apply to the Trademark Office of the China National Intellectual Property Administration (hereinafter referred to as the Trademark Office) for trademark registration. Malicious trademark registration applications not intended for use shall be rejected. This article will be based on Article 4 of the Trademark Law to discuss the understanding and comprehension of malicious trademark hoarding and legitimate reserve trademarks.

1. Malicious hoarding of trademarks

In Article 4 of the Trademark Law, "malicious registration of trademarks without the purpose of use" succinctly summarizes the act of maliciously hoarding trademarks. Hoarding trademarks "refers to the practice of applicants applying for a large number of registered trademarks, but without the actual purpose of using the trademark, without any preparation for use, or based on reasonable judgment, without the possibility of actual use of the trademark, that is," not for the purpose of use ". In terms of hoarding trademarks, 'malicious registration' can be understood as an intention to seek illegitimate benefits through this. Therefore, 'malicious hoarding of trademarks' can be understood as a behavior in which applicants apply for a large number of registered trademarks without the purpose of use, in order to seek illegitimate benefits.

2. Legitimate reserve of trademarks

Since through the aforementioned analysis, the act of applying for a large number of registered trademarks without the purpose of use is identified as hoarding trademarks, then if the applicant reserves a large number of trademark applications for defensive purposes or future business plans, there is also a "non use purpose", and these applications will also be rejected according to law.

In this regard, the "Guidelines for Trademark Examination and Adjudication" point out two situations: "(1) the applicant applies for a trademark that is identical or similar to the registered trademark for defensive purposes. (2) the applicant applies for a trademark in advance for future business with realistic expectations." The provisions of Article 4 of the Trademark Law do not apply. From the above two situations, it can be inferred that although the applicant has the intention of "not for use", their act of applying for a certain number of trademarks for reserve is to protect their own trademark rights or meet their own business needs, and there is no intention to seek improper benefits through transfer or other means. Therefore, it can be recognized as a legitimate act of good faith reserve of trademarks.

3. Clarify the specific circumstances of 'malicious hoarding of trademarks' and grasp the boundary between' good 'and' evil '

The provisions of Article 4 of the Trademark Law actually provide a basis for the recognition of "malicious hoarding of trademarks". At the same time, in the "Guidelines for Trademark Examination and Adjudication", it is further clarified that ten situations belong to "malicious registration of trademarks without the purpose of use", including:

(1) a huge number of trademark registration applications that clearly exceed the needs of normal business activities, lack genuine intention to use, and disrupt the order of trademark registration;

(2) Copying, imitating, or plagiarizing multiple trademarks that have a certain level of fame or strong distinctiveness, disrupting the order of trademark registration;

(3) Repeatedly applying for registration of a specific trademark with a certain degree of popularity or strong distinctiveness for the same subject, disrupting the order of trademark registration;

(4) A large number of applications for registration of product names, packaging, decorations that have a certain impact on others' enterprise names, abbreviations of enterprise names, e-commerce names, domain names, as well as well-known and recognizable commercial logos such as advertising slogans and appearance designs that are identical or similar to those of others;

(5) A large number of applications for registration with public cultural resources such as the names of well-known figures, well-known works or character names, and well-known and recognizable art works of others that have the same or similar symbols;

(6) A large number of applications for registration of signs that are identical or similar to administrative division names, mountain names, scenic spot names, building names, etc;

 (7) A large number of applications for registration of generic names, industry terms, symbols that directly indicate the quality, main raw materials, functions, uses, weight, quantity, and other lack of distinctiveness on designated goods or services;

(8) Submitting a large number of trademark registration applications and transferring a large number of trademarks, with dispersed assignees, disrupting the order of trademark registration;

(9) The applicant has engaged in behaviors such as selling in large quantities, forcing commercial cooperation, demanding high transfer fees, licensing fees, or infringement compensation from prior trademark users or others for the purpose of seeking improper benefits;

(10) Other situations that can be identified as malicious trademark registration applications. It can be seen that the above situations all contain the vocabulary of "a large number, a huge quantity", which proves that this is one of the key factors in determining the malicious hoarding of trademarks.

Although the "Guidelines" have given the green light for applicants to apply for legitimate reserved trademarks, in practice, they will still be rejected under Article 4 of the Trademark Law. The reason is mostly due to the short-term and large-scale trademark applications, which are identified as "excessive defense" and "excessive reserve". Even though the Guidelines state that legitimate reserved registered trademarks do not apply to the provisions of Article 4 of the Trademark Law, trademark applications based on defensive purposes must still be appropriate, exceeding reasonable and necessary limits by applying for excessive defense and excessive storage of trademarks without genuine intention of use. Although not intended for profit transfer, it still occupies a large amount of trademark and administrative resources and disrupts the order of trademark registration. It can still be legally recognized as "malicious trademark registration without purpose of use".

It can be seen that the grasp of "quantity" in trademark applications is one of the key elements to distinguish between "good" and "evil". The applicant's application for trademark registration must comply with their actual main business scope and qualifications; To meet the needs of future strategic development, it is necessary to fully consider the actual usage and popularity of one's core brand and trademark, and conduct reasonable and appropriate trademark application activities.

In 2021, the China National Intellectual Property Administration cracked down on 482000 maliciously registered trademarks in the trademark review process, of which 60400 were maliciously hoarded, and 1628 were maliciously registered that damaged the public interest. In the trademark opposition review process, a total of 30000 malicious registered trademarks were cracked down on. In the subsequent procedures, 1729 trademarks were declared invalid voluntarily, which is five times the total number of trademarks declared invalid voluntarily in the past 10 years. In the first quarter of 2022 alone, the China National Intellectual Property Administration rejected 12200 maliciously hoarded trademarks, 1628 maliciously registered trademarks, and 707 voluntarily invalidated trademarks. Under the policy of normalized crackdown on malicious hoarding of trademarks in China, applicants should make reasonable and moderate use of this protection measure to improve the quality of trademark applications, avoid the negative impact of "excessive defense" on the maintenance of their own trademarks and the waste of trademark resources. Trademark agencies also bear the responsibility of advising and guiding applicants to engage in legitimate trademark application activities. Let us work together to create a good order for trademark registration applications.