In September 2020, a record number of trademark filings were made with the USPTO. In total, 72,869 filings were made. However, this all-time high is not cause for celebration, nor does it mean the US economy is firing on all cylinders.
43% of these filings (31,517) came from Chinese-based individuals and businesses. There has never been a month in which this many trademark applications from China have been filed in the United States.
There are three reasons why these filings are cause for concern.
1. The majority of these trademark filings are fraudulent.
The majority of these trademark applications coming from China are fraudulent filings. For example, this Gelramoe application filed on September 22 includes a specimen of a sleeping bag with the brand name. However, a quick search online uncovers an identical photo of the product under the brand HiHiker.
2. The Chinese government is paying its citizens bounties for US trademark registrations.
There is a strong likelihood that the Chinese government is incentivizing businesses in China to obtain trademark registrations in the US.
Two years ago, The Wall Street Journal documented that US officials were concerned that a surge in Chinese filings was being fueled by cash subsidies that Chinese municipal governments were offering to citizens that registered a trademark in a foreign country. Gerben Law founder Josh Gerben was quoted in the article telling The Wall Street Journal that the filings were disrupting the US trademark system.
At the time, Chinese filings only accounted for 12% of total US filings. Now, Chinese applications make up 43% (September 2020).
3. The influx of filings makes it more difficult for US companies to obtain trademark registrations.
The USPTO as an agency is staffed to handle a certain amount of trademark applications per month. When they experience an influx of filings like this, it is impossible for them to keep up. Trademark applicants in the United States that are filing legitimate applications will ultimately wait longer to get USPTO approval and a trademark registered.
Moreover, when some of these Chinese trademarks get registered, they are given protection not only for the exact trademark, but for anything that sounds phonetically equivalent. This means legitimate US filers could receive refusals for their trademarks just because their mark sounds similar to another.
By filing tens of thousands of trademark applications with the USPTO, China can effectively grind our US trademark system to a halt and make it very difficult for US businesses to clear and register brand names.