Babbitt Column | Legal Analysis of Trademark Protection in Blockchain Projects

The decentralization of blockchain technology and the difficulty of being arbitrarily falsified have enabled practitioners in different fields to explore the combination of technology and industry. However, the issue of intellectual property protection in blockchain projects cannot be ignored, especially in the case of malicious cybersquatting, it is difficult for the infringee to defend his rights. The revision of the Trademark Law on April 23, 2019 provides a more comprehensive avenue for the protection of trademarks in blockchain projects. This article will explore the trademark protection of blockchain projects in conjunction with the revised contents of the new Trademark Law.

I. Main contents of the revision of the Trademark Law

The revision of this Trademark Law mainly reflects the following two points:

First, emphasize the “purpose of use” of trademark registration applications;

Second, strengthen the protection of trademark rights and raise the standard of infringement compensation.

The main changes are as follows:

1. Article 4, paragraph 1, adds: “An application for registration of a malicious trademark that is not intended for use shall be rejected.” This article is mainly added to:

First, to prevent malicious cybersquatting by malicious registrants, abnormal applications that are not intended for use will be rejected;

Second, the decision to reject such abnormal applications is supported by law, that is, the reviewing authority has the right to directly make corresponding review decisions based on the review of the application materials.

2. The third paragraph of Article 19 is amended as follows: “A trademark agency knows or should have known that a trademark applied for by a client belongs to the provisions of Articles 4, 15 and 32 of this Law, and may not accept it. Entrusted." This paragraph mainly regulates the behavior of the agency and emphasizes the obligations of the trademark agency.

In practice, some trademark agencies use their business advantages to help the client to register malicious trademarks, which impairs the fair competition order in the market. In fact, the agency knows or should know that “application for trademark registration for non-use purposes” is not difficult. This article further clarifies the positive guiding role of the agency.

3. Article 33 is amended to read: "For the trademark of the preliminary examination and announcement, within three months from the date of the announcement, the prior rights holder and the interested party consider that it is in violation of Article 13, paragraph 2 and the third paragraph of this Law. , Article 15, Article 16, paragraph 1, Article 30, Article 31, Article 32, or any person who considers to be in violation of Articles 4, 10, and Article 11, Article 12, and Article 19, paragraph 4, may file an objection to the Trademark Office. If there is no objection after the expiration of the notice, it shall be approved for registration, and the trademark registration certificate shall be issued and announced."

Article 44 The first paragraph is amended as: "A registered trademark is in violation of the provisions of Articles 4, 10, 11, 12, and 19, paragraph 4 of this Law, or Where the registration is obtained by deception or other improper means, the Trademark Office declares that the registered trademark is invalid; other units or individuals may request the Trademark Review and Adjudication Board to declare the registered trademark invalid."

Article 33 of the Trademark Law is stipulated in the procedures for opposition to trademark registration; the first paragraph of Article 44 is about the illegality of registered trademarks or the invalidation of registration by improper means. The revised Trademark Law further supplements and perfects the subject and reasons for trademark opposition and invalidation declaration, and will not apply for trademark registration for the purpose of use (Article 4), trademark agency illegal application or acceptance of the application for trademark Registration (Article 19, paragraph 4) is included in the objection and invalidation cause, the main purpose is to comprehensively regulate malicious registration or abnormal application.

4. Article 63 is amended to: “more than one time and three times less” in the first paragraph is revised to “more than one time and five times less”; “three million yuan or less” in the third paragraph is revised to “five Adding two paragraphs as the fourth paragraph and the fifth paragraph respectively: "The people's courts hear trademark dispute cases, and at the request of the right holder, the goods belonging to the counterfeit registered trademarks shall be ordered to be destroyed except for special circumstances; The materials and tools used to manufacture counterfeit registered trademarks shall be ordered to be destroyed and shall not be compensated; or in special circumstances, the materials and tools shall be prohibited from entering the commercial channel and shall not be compensated." Compared with the previous law The lower cost of infringement, the amendment of this article on the one hand increases the illegal cost of the infringer, on the other hand can also enhance the confidence of the trademark owner.

5. Article 68, paragraph 1, paragraph 3 is amended to read: "(3) Violation of the provisions of Articles 4 and 19, paragraphs 3 and 4 of this Law"; add one as the fourth paragraph: "For malicious registration of trademark registration, administrative penalties such as warnings and fines shall be given according to the circumstances; if a trademark lawsuit is filed maliciously, the people's court shall impose penalties according to law." This clause mainly targets abnormal agency behavior, abnormal application behavior, and maliciousness of the agency. The lawsuit is subject to administrative punishment. For such abnormal applications, it will be directly rejected in the review process, but only the rejection of the application is not enough to crack down on the infringement. Therefore, the provisions of this amendment to increase administrative penalties will impose further penalties on the agency's abnormal agency behavior and abnormal application behavior.

Second, the legal analysis of the protection of trademark law in blockchain projects

(I) Status of trademark protection in blockchain projects

At present, there are 485 trademarks related to the blockchain searched on the website of the Trademark Office with the word “blockchain” as keywords. Among them, 8 are waiting for acceptance, 283 applications are rejected, 8 are not accepted, and 8 are pending. 172 reviews were reviewed, 10 were rejected, and 4 were registered. These trademarks under review cover the food, education, tourism and finance sectors. In addition to individual alcoholic beverages (blockchain–Qingdao Huanas Wine Co., Ltd.), the rest of the trademarks have been rejected.

The outstanding problems in practice are as follows: First, some blockchain project squatting and hoarding behaviors that do not have the purpose of use have caused many new blockchain enterprises to have difficulties in brand protection. Trademark owners have to spend a lot of money from trademarks. The squatter buys the trademark that he created in the first place. Second, when the blockchain project is maliciously registered, the trademark right of the right holder is often not relieved. In the previous jurisprudence, the judiciary relied on this situation. The "Anti-Unfair Competition Law" and the "Trademark Law" Article 44 are regulated, that is, after the cybersquatting trademark is approved for registration, the dispute procedure can be initiated to apply for invalid cybersquatting trademarks, and the case trial is for squatting hoarding trademarks. The number and rights holder trademarks have higher requirements in China's popularity, which greatly increases the rights and costs and risks of rights holders, and is not conducive to effectively curbing the malicious registration of trademarks. Third, the trademark law before the amendment is The infringer’s penalties are small and the illegal cost is low, which causes the blockchain project trademark to be maliciously registered.

(2) The positive effect of the revised Trademark Law on the protection of trademarks in blockchain projects
1. Combat trademark malicious registration

Articles 4, 19, 33 and 44 of the revised Trademark Law stipulate that the applicant shall provide evidence of “use” at the stage of trademark registration, and grant the review body the stage of preliminary examination. The right to reject the decision is made ex officio; when the blockchain project is maliciously registered, the infringee may file an objection and invalid application against the trademark. The revised Trademark Law has established a relatively complete system for combating trademark malicious squatting and hoarding behaviors, and provides relatively complete remedies for the blockchain project trademarks from the beginning of application to the completion of registration.

2. Increase the compensation for trademark infringement

Article 63 of the revised Trademark Law has increased the amount of compensation for trademark infringement. When the right owner finds that the blockchain project is maliciously registered, he can apply to the Trademark Office for objection and invalidation, and ask the infringer to compensate for the loss.

3. Raise awareness of trademark protection of rights holders

The revision of the Trademark Law is not only the regulation of the infringer, but also reminds the right holder to properly protect the trademark of the blockchain project. For example, the trademark holders of blockchain projects can investigate the market usage before registering trademarks and verify the registration of trademarks in blockchain projects; the trademark holders of blockchain projects regularly check whether there are their own blockchain projects on the website of the Trademark Office. If the trademark is maliciously registered, whether there is the same or similar trademark, when the infringement fact is found, the professional organization can be entrusted to maintain its trademark rights.

(3) Other legal issues
Although the revision of the Trademark Law can reduce malicious registration of blockchain projects, there are still other legal issues to be resolved in practice.

First, the revised Article 4 of the Trademark Law specifically applies, the applicable procedures and situations, and the relevant supporting laws and regulations, judicial interpretation or review guidelines. According to Article 4 of the Trademark Law, “Application for registration of a malicious trademark not for the purpose of use shall be dismissed”, how the Trademark Office determines “malicious” and “not for the purpose of use”;

Second, when the right holder raises an objection and the trademark is invalid, the degree of proof and proof of evidence from those aspects, these issues need to be continuously improved in practice.

The revision of the Trademark Law highlights the punishment for abnormal patent applications and trademark hoarding and malicious registration. It is especially necessary for blockchain enterprises to build their own trademark protection systems in a timely manner.

Attachment: Comparison chart before and after the revision of the Trademark Law
Author: Chen Yunfeng
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