Hui Huang

Over the course of your career, you have been involved in the drafting and amendments of China’s trademark law. If you could change one thing about prosecuting trademarks before the China National IP Administration, what would it be, and do you think it is likely to happen?

The latest draft revision of the Trademark Law gets right to the point: trademarks are to be used – those that are not should be cancelled. However, I don’t agree when it comes to how this objective is achieved – by eliminating the masses of unused ‘zombie’ trademarks. Instead of requiring that trademark registrants prove that they use their trademarks every five years, I would suggest a different yet fairer approach. It should be sufficient that a trademark that has not been used for three years will not be protected. Especially when the trademark office refuses an application on account of a prior trademark, the applicant should have the right to request – if the cited trademark has been registered for over three years – that the owner of the prior mark submit evidence of use. If no evidence is submitted, the applied trademark should proceed to publication without delay.

Of course, the owner of the cited mark could choose to file an opposition or even an invalidation action, but it would still need to prove that it has been using the mark in the three years prior to the filing date of the trademark that it wants to oppose or invalidate.

This amendment is intended to progressively eliminate unused zombie trademarks and free up space for applicants with genuine intent to use. In addition to this general principle, there should also be an overarching legal definition of bad faith to ramp up the fight against a surge of malicious trademark registrants and users.

Finally, the stricter duty to use needs to work in parallel with an efficient cross-class protection mechanism of well-known trademarks, which means that recognition of well-known status must be reasonably achievable. Otherwise, brand owners would have no choice but to rely on defensive marks that are registered but not used, which would contradict the obligation to use.

How is your firm attracting and retaining key talent?

The secret to a first-rate firm is its ability to attract and retain first-rate talent. These professionals are the core of our future. Whether a firm can attract and retain talent depends on more than salary and benefits; firm culture and work atmosphere (ie, openness and equality) are just as critical. It is therefore essential for leadership to give fair and proper recognition and provide support where needed.

We are blessed with a large group of aspiring young professionals. In their stage of professional development, room for growth is key. They are eager to learn and practise. The firm offers growth opportunities to help realise their professional aspirations. We also have various support systems and wellbeing programmes to ensure everyone fits into the firm culture.

You have been praised for being a “multi-faceted” IP professional. How do you stay abreast of the latest developments in so many different industries, in China and beyond?

In an ever-changing world, it is difficult to be well versed in every area. Fortunately, we have pooled firm-wide resources and know-how to build our own knowledge centre early on. We also have a small taskforce dedicated to gathering and integrating the latest developments on the legislative, practical and industrial levels. We started with internal platforms to categorise, store and share such knowledge and best practice, and later decided to make this available to the public.

In 2021, we launched Wanhuida Library, which is an open online library embedded in the Chinese instant-messaging app WeChat. It allows Chinese users to access our up-to-date database of more than 2,000 frequently used IP laws, regulations, judicial interpretations and departmental rules. We have also shared more than 700 original articles written by the firm’s IP practitioners and offer free access to our complete collection of around 5,000 exemplary IP cases that have been released by Chinese courts, procuratorates and administrative authorities. Users can cross-search our reservoir of laws, cases and insights with a few keywords and generate pertinent results from different latitudes.

I’m also fascinated by the comparative study of trademark regimes and practices in different jurisdictions. I have been doing a case law study on the European Union, United States, Japan and South Korea for about 20 years. My second doctoral dissertation studied the “Impact of Use on the Protection Scope of Trademark: A Comparative Law Study of China and European Union”. I have to admit, my academic interests fuel my enthusiasm for keeping abreast of the latest developments in China and beyond.

What recent decisions or legislative developments are having the most significant impact on trademark strategies in China right now?

The fourth amendment to the Trademark Law in 2019 added the provision that bad-faith registration applications that are not intended for use will not be registered (Article 4) and introduced the concept of curbing bad-faith litigation (Article 68). Subsequently, the Supreme People’s Court also published a judicial interpretation requiring compensation for reasonable expenses incurred when defending against those that abuse their trademark rights (2021).

The judiciary also interpreted the Anti-Unfair Competition Law to recognise registration of a trademark in bad faith. This not only requires the bad-faith registrant to compensate for reasonable expenses incurred by the party whose rights have been usurped (eg, Gubei Shui Zhen and Xiaoai Tongxue), but also prohibits the registrant from applying for new infringing trademarks (eg, In-sink-erator), and even demands this party to withdraw the infringing trademark application and registration altogether (eg, ReFa).

All of these changes aim to curb malicious registration, strike a balance between trademark registration and use and optimise the trademark regime.

How is generative AI (eg, ChatGPT) affecting your day-to-day practice?

The fast development of technology – particularly breakthroughs in AI – has a great impact on knowledge-intensive services. The application of ChatGPT and other large language models may reduce our dependence on supporting staff. Down the road, firms may reduce their numbers of supporting staff or use AI for certain associate work where appropriate. This change would free up lawyer resources for crucial legal issues and complex, extraordinary cases. Clients would benefit from this efficient allocation of resources.

You have been an IP litigator at Wanhuida since 2002. How have you seen client demands change during this time, and how do you predict they could evolve in the coming years?

When I embarked on private practice more than 20 years ago, client demands were relatively straightforward; we dealt with counterfeiting and slavish copy most of the time. As the government and judiciary crank up enforcement efforts, infringers quickly adapt and resort to more clandestine and insidious methods. Some manage to cheat the system, obtain seemingly legal rights to add a false sense of legality to their infringement and even brazenly sue genuine rights holders for damages. Against this backdrop, client demands are evolving in terms of breadth, depth and complexity.

In this realm, rights holders are at a disadvantage. They could be dragged into years – decades, even – of costly proceedings. Clients expect us to be more proactive, efficient, responsive and strategic, with the flexibility to work under budgetary constraints.

As a senior partner at the firm, what would you say are the three most important qualities that an inspiring leader should possess?

I would say the three most important qualities of an inspiring leader are the unique ability to accurately assess new business growth trends, the capacity to identify and use talent and the skill and tenacity to bring the firm’s partners and professionals toward a shared vision.

What do you predict will be the biggest challenge facing your clients over the next 12 months, and how are you preparing to help them tackle this?

In light of economic uncertainty, the pressure on clients' budgets will continue to increase, and winning more with less will make us more competitive. On the surface, solving problems and cases one by one will generate more revenue, but the overall investment could render it unsustainable if it exceeds the client's affordability. Therefore, we must offer more robust solutions and place a premium on adding long-term value for our clients.

You co-published an article in the Journal of Intellectual Property Law & Practice about bad faith. What are your top tips for approaching such cases, given that determining what constitutes bad faith can be challenging for IP counsel?

IP counsel need a broader mindset and a layered approach to identify and assess bad faith. From a cost-efficiency angle, we would advise rights holders to start at the infringer’s filing history. The aim is to see if there is anything fishy that raises a red flag, such as filing multiple marks identical or similar to theirs or those of other brand owners. If there is no obvious anomaly in the filing activity, IP counsel could then look into whether the infringer has altered its trademarks in actual use. It is not uncommon that an infringer tweaks a seemingly harmless mark to make it almost visually identical to the owner’s trademark. We have seen infringers invent elaborate schemes, creating highly interconnected management structures with closely linked entities by cross holdings or filling executive roles by the same individuals, so that each one plays a part in the infringement. Delineating such complicated arrangements and identifying the correlation among these bad actors requires thorough investigation and skillful evidence gathering. IP counsel need to hire a veteran team to map out the terrain and gather preponderant evidence to build a strong case.

What has been your most memorable case to date – and what made it stand out?

Over 15 years ago, we overcame unimaginable procedural and substantive difficulties in securing hard-earned victories for Japanese publisher Futabasha Publishers in a series of administrative trademark litigation and copyright infringement suits concerning its most well-known comic figure Crayon Shin-chan. The case ended with the invalidation of the infringer’s pre-emptive trademark registrations, a permanent injunction on the copyright infringement and damages of 300,000 yuan.

The unique aspect of the case was that our client leveraged its copyrighted Crayon Shin-chan artwork to attack the infringer’s pre-emptive trademark registrations, which was a first of its kind. We successfully persuaded the Supreme Court to order a retrial, which led to the affirmation that a copyright owner can initiate civil litigation against the use of a registered trademark. The court found that copyrights and the exclusive right to use a registered trademark are two separate civil rights with their own boundaries. A rights owner, when executing its legitimate rights, cannot infringe another’s lawful prior rights.

The administrative case dealt with:

• the calculation of the five-year time limit for invalidating trademark registrations based on prior rights;
• whether the fraus omnia corrumpit ground could be applied to invalidate the mark in bulk;
• whether an order to stop use of the mark could be issued even before it was invalidated; and
• how to protect the author's merchandising rights.

In a sense, this case set a precedent for using absolute grounds to invalidate an infringing trademark and directly prohibit its use, and serves as a point of reference for future legislation to combat bad-faith trademark registrations.