Conceptually, bad faith is universally understood as ‘dishonest intention’. In trademark law, this concept is becoming more and more important, especially in a global environment where competition is very high.
So-called bad faith trademark registrations are prior trademark registrations filed by companies that correspond to a trademark of a foreign company (not yet registered in the concerned country). Most of the time, these registrations are done with the express intention of selling it back to the foreign company at an inflated price. This is also called ‘trademark squatting’.
The issue of bad faith filings in China has be-come increasingly significant. The protection offered to well-known companies has tradition-ally been insufficient. However, it is now com-monly recognised that improvements have been made.
The concept of ‘bad faith’ is not defined in Chi-nese laws and regulations. According to a se-nior official of the Chinese Trademark Review and Adjudication Board (TRAB): “Bad faith is a mental state of a person in that he knew or should have known that the trademark in ques-tion originated from a third party.”
In 2010, the US Patent and Trademark Office (USPTO) joined the Japan Patent Office, the Office for Harmonization in the Internal Market (OHIM) and China’s State Intellectual Property Office (SIPO) to launch a series of technical seminars in Beijing on that issue, intended to identify useful features of national trademark systems that can be implemented as best prac-tices in other countries.
The Beijing Number 1 Intermediate People’s Court published the results of its study on bad faith filing in December 2012. The study counselled courts to deter squatting activities when they interpret and apply the law, as well as to admit evidence with the goal of prohibiting this activity.