While some jurisdictions in the Asia-Pacific region permit aggressive overfilings, others are not as accepting of the concept. Excel V. Dyquiangco explores trademark hoarding and bad faith registrations, and how brand owners can fight back. 

In 2016, a landmark UK trademark dispute erupted between broadcasting giant Sky and cloud services provider SkyKick, centering on the practice of aggressive overfilings. Sky, renowned for its “Sky” branding, initiated legal action against SkyKick, asserting that the latter’s use of “SkyKick” in email migration and cloud-based software services constituted trademark infringement. 

The core of Sky’s argument rested on its established “Sky” trademarks, which it claimed were being unfairly exploited by SkyKick. Conversely, SkyKick mounted a robust defense, challenging the validity of Sky’s trademarks, alleging they were registered in bad faith. They argued that Sky had engaged in aggressive overfiling, registering its trademarks across an excessively broad spectrum of goods and services, far beyond the scope of its actual business activities, without a genuine intention to utilize them. 

SkyKick’s contention focused on the idea that Sky had strategically employed aggressive overfilings to “squat” on potential future markets, effectively blocking legitimate competition. This practice, they argued, stifled innovation and prevented businesses like SkyKick from operating under similar, yet distinct, names. The case thus became a pivotal examination of the boundaries of trademark protection, especially concerning the legitimacy of aggressive overfilings and the requisite “genuine intention to use” in trademark registration within the context of rapidly evolving digital services. 

While some jurisdictions in the Asia-Pacific region permit aggressive overfilings, others are not as accepting of the concept. Both Thailand and China operate under a first-to-file trademark system, where applicants are not required to demonstrate prior use to secure registration and their rights and prevent third parties from registering similar marks. Moreover, in Thailand, having this allows for the registration of trademarks across multiple classes based solely on a genuine intention to use, even for potential future expansions. This ease of registration contributes significantly to aggressive over-filing practices.  

“The advantage of this system is obvious as it provides clarity on trademark ownership and priority rights, reducing ambiguity,” said Hatty Cui, a principal and head of the China trademark group at Rouse in Beijing. “Businesses can secure trademark protection quickly and efficiently by filing a trademark application, without the need to establish prior use. However, one of the side effects of this system is that bad faith trademark applications imitating others’ brands and trademark hoarding activities are common.” 

With China developing its own subclass system based on the Nice classification with each classification divided into several subclasses, goods and services that fall within the same subclass are typically considered similar, while those in different subclasses are generally regarded as dissimilar. If brand owners do not file broadly to cover multiple subclasses and leave gaps in the trademark registry, they risk having their marks registered, used, or squatted on by bad faith parties in the uncovered subclasses, which could inevitably dilute the brand of legitimate businesses. 

“While the number of bad faith trademark applications has significantly decreased since the China Trademark Office implemented extensive measures against such applications, it remains common for brand owners to register trademarks in classes beyond their legitimate business interests for defensive purposes,” said Cui. “This helps mitigate the occasional interference from bad faith trademark applications.” 

In India, meanwhile, the practice of overfiling was common until 2017 when the enactment of the Trademarks Rules 2017 was put into place, wherein the Indian trademark law included the concept of well-known mark, thereby streamlining the process for securing the ‘well-known’ status for a trademark from the trademarks registry, leading to a decline in the practice of aggressive over-filing. 

And in Singapore? “I don’t believe such a practice is prevalent,” said Catherine Lee, a senior partner at Dentons Rodyk & Davidson in Singapore. “Most companies would choose to register their marks in their main classes of interest. The scope of protection may be wider than an applicant’s current business, but this is generally accepted since an applicant would want to provide for the possible expansion of the scope of business after the application is filed.” 

Bad-faith filings and intent to use 

Lee said that the trademark laws of Singapore prohibit trademark applications which were filed in bad faith. “Since an allegation of bad faith is a serious allegation, it will need to be properly pleaded and proved. Where it can be shown that the applicant’s intentions are dishonest and commercially unacceptable, there is room to rely on the bad faith provisions to challenge the application or registration,” she said. 

She added that in assessing intent to use, when applying, the applicant must declare that it is using the trademark or otherwise has a bona fide intention to use. “It would be rare for the Intellectual Property Office of Singapore to refuse an application at the examination stage on the basis that the applicant does not intend to use the mark on the goods and services claimed,” she said.  

The issue of lack of genuine intent to use the trademark can arise when the registration is challenged by a third party, she added. 

She said: “There have been instances where the registry has invalidated registered marks on the grounds of bad faith following its finding that the proprietor of the mark did not actually intend to use the mark for the goods registered. One recent example is the application for invalidation by Coinbase Inc. against the trademark registration of Biflyer Inc. [2023] IPOS 9. Aside from finding that the proprietor’s registration of the name of its direct competitor in the market will be considered commercially unacceptable by reasonable and experienced persons in the same market, the registry found that the declaration made by the proprietor at the time of filing that it had an intention to use the mark for the goods and services stated is untrue and the proprietor had therefore made a false declaration.” 

In India, the laws are similar. Rahul Beruar, a partner and co-founder of Beruar & Beruar in New Delhi said that the Indian trademark law has specific safeguards against bad-faith filings, but coupled with non-use requirements, wherein it is necessary to establish non-use of the registered trademark (in relation to those goods and services) by the registered proprietor.  

“For instance, cancellation proceedings against a registered trademark can be initiated on the ground that the mark has been registered without bona fide intention of using the mark with respect to the goods and services for which it has been registered and that there has been no bona fide use of the mark by the owner for the time being since registration,” he said.  

Trademark applications in India, meanwhile, can be filed with a user claim as well as on ‘proposed to be used’ basis. “While filing an application with a user claim, the applicant is required to submit evidence of continuous use of the trademark from the date of use claimed, and the trademarks registry affectively scrutinizes such applications for proper evidence of use,” said Beruar. “However, when applications are filed on ‘proposed to be used’ basis, there is no scrutiny by the registry qua the use of the trademark while granting the registration. Having said that, the courts have been cautious of such registrations and in cases of enforcement, emphasized on the requirement of proving use of the said trademark by the registered owner for the goods or services registered thereunder, before enforcing their rights under such registrations against third parties.” 

In fact, India’s Supreme Court and High Courts have in numerous cases observed that the intention to use a trademark sought to be registered by an applicant must be genuine and real and mere registration of the mark does not establish use of the mark by the proprietor thereof. Additionally, reasoning that the rights conferred by registration are subject to the rights of the prior user of the trademark, the court have in multiple cases refrained from giving injunctions and/or relief to the registered proprietor of a trademark in cases where the proprietor could not establish use of the trademark in respect of the relevant goods or services.  

In Thailand, the Thai Trademark Act provides legal mechanisms to address issues related to bad-faith filings and non-use of trademarks. “While there is no explicit section labeled ‘bad faith,’ several provisions can be invoked to combat trademark trafficking, bad-faith registrations and the improper monopolization of trademark rights,” said Daniel Greif, Southeast Asia Director at S&O IP in Bangkok.  

He cited Section 63: Non-Use Cancellation, where “any interested person or the Registrar may petition the Board to cancel a trademark registration if it is proved that at the time of registration the owner of the trademark had no bona fide intention to use the trademark with the goods for which it was registered and in fact there was no bona fide use whatsoever of the trademark for such goods or that during the three years prior to the petition for cancellation there was no bona fide use of the trademark for the goods for which it was registered unless the owner can prove that such non-use was due to special circumstances in the trade and not to an intention not to use or to abandon the trademark for the goods for which it was registered.” 

“This section allows any interested person to petition for the cancellation of a trademark registration if the trademark has not been used for a continuous period of three years prior to the filing of the cancellation petition. It is used against defensive registrations where a party registers marks without a genuine intention to use them, thus blocking others from entering the market,” said Greif. 

He added, “While the Thai Trademark Act does not explicitly define or address bad faith in the same terms as the EU system, it does provide mechanisms to challenge registrations in cases of non-use or improper monopolization. Section 63 allows any interested party to seek cancellation if a trademark has not been used for three consecutive years or was registered without a bona fide intention to use it. However, Thai law does not directly address the issue of over-broad or vague trademark claims as raised in the SkyKick case. Additionally, the burden of proof is relatively high. The Supreme Court has held that even minimal use, such as, test marketing, clinical trials or distribution of promotional goods can demonstrate a registrant’s intention to use the mark.” 

Facing infringement from overly used trademarks 

In Thailand, if a business faces trademark infringement claims from a company with overly broad or defensive trademark registrations, several legal defenses are available. 

“A key defense is demonstrating the business’s actual and continuous use of the trademark with its goods or services,” said Patthariya Sirinunthaphapakorn, a senior associate at S&O IP in Bangkok. “The business may also argue that the claimant registered the trademark beyond its legitimate scope of use or without a bona fide intention to use it. This argument applies particularly when the registration is intended to block others from using similar marks without actual use in the relevant market.” 

For instance, if a company primarily operates in Class 9 (electronic devices) but registers its trademark in Class 3 (cosmetic products) solely to prevent third parties from registering similar marks in that class, this could form a valid defense. 

Another viable defense involves proving the business has used its trademark in good faith, with no intent to mislead consumers or infringe the claimant’s rights. “If the business can demonstrate long-standing prior use of the trademark either domestically or internationally before the claimant’s registration in Thailand, this further strengthens its position,” she said. 

In China, in cases involving litigation filed by trademark registrants who lack intent to use their marks and if the registrations are found to be obtained via bad faith, there are high chances that the registrant’s trademark infringement claims will not be supported by the court under current practice. 

Article 64 of the China Trademark Law stipulates that where a trademark registrant seeks compensation based on registered trademark right, the alleged infringer may plead that the registrant has not used the registered trademark.  

“In such cases, the court may require the registrant to provide evidence of actual use of the registered trademark during the preceding three-year period,” said Cui. “If the registrant cannot prove that the trademark has been actually used within the preceding three years, the alleged infringer shall not bear compensation liability.”  

The alleged infringer may also petition to cancel the registered mark based on the grounds of non-use for three consecutive years.  

“In practice, legitimate brand owners are generally cautious when enforcing against others based on defensive trademark registrations. Since the alleged infringers are likely to file non-use cancellation against the defensive registrations and it is difficult to defend such an action if no use for such defensive registrations,” said Cui.  

Cui noted that while the fifth amendment of the China Trademark Law is still ongoing, the draft launched for public comments disclosed that although the filing basis will remain first-to-file, the amendment may introduce more use requirements when filing and maintaining trademark registrations, such as post-registration maintenance.  

“The draft revision aims to address several key issues, including stricter regulation of malicious registrations, enhanced protection of well-known trademarks and increased scrutiny of trademark agents,” she said. “Although these amendments are not focusing on preventing the misuse of the trademark system for anti-competitive purposes, they will be helpful to reduce the anti-competitive activities.” 

In India, one of the most effective remedies available for businesses facing trademark infringement claims is to challenge the defensive registration of the claimant company under the ground for lack of bona fide intent of use. These counter petitions challenging the defensive registrations, in case of such disputes, are filed before the courts and usually proceed parallelly with the infringement suits, thus ensuring a fair opportunity to the defendants to present their case against any adverse interim relief as well. 

“Moreover, vigilant entities can also voluntarily file rectification proceedings against such defensive registrations of companies, without having to wait for the company to raise any infringement claim,” said Beruar.