Loopholes in the trademark law must be closed

ALIBABA, China’s largest e-commerce enterprise, revealed that by the end of March, the holders of 83 trademarks had complained against more than 15,000 retailers on its platforms for selling more than 110,000 goods that used terms in their advertising slogans or their products’ names for which they hold trademarks. The retailers paid about 1 million yuan ($145,000) in “trademark use fees”. The legislature, judicial and administrative authorities must work together to address the issue of malicious trademark registration as soon as possible. Beijing News comments:

The malicious registering of trademarks refers to registering some general descriptive terms in an industry as trademarks and then exploiting the trademark law to claim against the producers and sellers of certain products defined or described by these terms.

For instance, the holders of the trademarks for such terms as “ripped” and “low-waistline” or “slip-on” and “highheel” have the legal right to sue producers and retailers using these words to describe their products. Many will settle with the trademark holders behind closed doors, which is the de facto purpose of the malicious trademark holders.

Alibaba estimates that malicious trademark holders, if the current law remains unchanged, could actually sue 9 million retailers on its platforms for selling about 60 million products that would infringe upon their “rights and interests” as the trademark owners.

The amount of money they extort dwarfs their cost of registering the “shell” trademarks, for which they actually do not have any tangible products at all.

If the authorities continue to turn a blind eye to such blackmail, they will be conniving in the hard-won intellectual property rights protection laws being an accomplice to parasites. They must plug the loopholes in the trademark and intellectual property rights protection laws to restrict the space for such malicious activities and strengthen their supervision of trademark registration.