Trademark application process in mainland China

As China becomes an important market for foreign brands, securing a trademark in China early will smooth the entry into the Chinese market. This chapter aims to help foreign brand owners to understand and navigate the intricacies of the trademark application process in mainland China.

Overview

China’s trademark system follows the first-to-file principle. At the filing stage, the applicant does not need to provide evidence to prove its actual use or intention to use the applied-for mark, unless requested in limited circumstances.

Any sign capable of distinguishing the goods or services from other undertakings can be registered as a trademark. This includes words, devices, letters, numerals, 3D symbols, combinations of colours and sounds either singly or in combination. The January 2020 Supreme People’s Court decision allowing Christian Louboutin to register its red-sole trademark, shows that single-colour marks with specified placement may also be registered.

It currently takes around 11 months for a smooth trademark application to proceed to registration. The process of a national trademark application can be summarised in the flowchart overleaf.

An applicant can make a priority claim within six months of the date of application of the earlier application filed in a Paris Convention country. Where priority is claimed, it is necessary to submit the original certified copy of the priority application documents either at the time of filing the trademark application or within three months after filing. The specification of the national application can cover all or some of the goods and services in the earlier application but cannot cover goods and services which are outside the scope of specification of the earlier application.

In many countries, it is possible to file a single application covering multiple classes (known as ‘multi-class applications’). While multi-class applications are available in China, they come with certain limitations and disadvantages. First, the official fees for filing multiple single-class applications and that of a multi-class application are the same – official fees are charged based on the number of classes instead of the number of applications. Second, under current practice, a trademark owner cannot divide a multi-class application voluntarily. If one of the classes faces opposition, the whole trademark application cannot proceed to registration until the opposition is overcome. Also, the trademark owner cannot renew only one class in a multi-class registration, nor can it assign one of the classes to other parties. Instead, the entire application/registration must be assigned/renewed. Filing single-class applications provides the owner greater flexibility and remains preferable.

Madrid or national filing?

Applicants may file a trademark application in China directly with the China National IP Administration (CNIPA) or before WIPO for international registration of the mark designating China.

Compared with national applications, international registrations might offer applicants some flexibility regarding the descriptions of goods and services since, for international registrations, the CNIPA generally accepts descriptions which do not conform with standardised descriptions prescribed by the CNIPA, and which may be otherwise unacceptable if they are filed as national applications.

However, CNIPA examiners will classify and translate the goods or services based on their understanding and discretion. Goods and services are classified into different subclasses in a class based on their nature and function, which plays a key role in determining similarity of goods and services. Sometimes, the specification after translation may not accurately reflect the goods or services of interest to the applicant. Inaccurate translation and classification may affect the scope of protection covered by the trademark and even attract unnecessary citation objections. Under current practice, it is almost impossible for the applicant to rectify such misclassification or incorrect translation.

Besides, if the applicant adopts Nice Class headings when filing international registrations with the intention to cover all goods or services in that class, the designation of class headings in China may not provide full class protection, as protection will be granted to items specifically mentioned in the description. For example, an application for ‘clothing, footwear, headwear’ will include Subclasses 2501 to 2505 for clothing, Subclass 2507 for footwear and 2508 for headgear, but it does not cover other subclasses such as 2509 for socks or 2510 for gloves.

Regarding proof of trademark rights, brand owners should also be aware that international registrations designated in China would not be issued a separate trademark registration certificate. Brand owners will need to apply separately for proof of registration, which are generally required for proving registrations and in enforcement actions.

While international registrations may allow greater flexibility in the descriptions of goods and services, filing a national application allows applicants to control the exact specification and the subclasses – hence, ensuring the applicant’s business interests are well protected under the unique classification system in China.

Specification – subclassification system and notices of correction

China operates a rigid subclassification system that overlays the Nice Classification system. Each class is subdivided into subclasses according to the features of the goods and services, including but not limited to their function, usage, raw materials and production units. Items classified in different classes and subclasses are, in most cases, considered to be dissimilar. The goods or services are deemed similar if they fall within the same subclass.

Since each subclass is a distinct unit, a trademark owner’s rights cover only the subclasses registered under the trademarks. For instance, registration for essential oils in Class 3 only offers the owner protection in Subclass 0305 and does not cover cosmetics in Subclass 0306. Hence, brand owners often find other parties registering the same mark for related goods or services in different classes and subclasses even after they have secured registration for their goods and services of interest in China. To prevent possible trademark squatting, foreign brand owners should plan and register their trademarks with broad scope of specification, covering goods or services that they might offer as their business expands and those that they might wish to prevent third parties from registering.

The specifications of national applications conform with the list of standard terms published by the CNIPA (usually known as the ‘Classification Book’). Otherwise, the CNIPA may issue a Notice of Correction, requiring applicants to amend or delete the non-standardised items within 30 days, which is non-extendable. Should the goods or services after amendment still be unacceptable, the CNIPA will reject the application outright.

Apart from the practice of classifying goods and services into different subclasses, the CNIPA also prohibits the registration of specific goods and services, which may otherwise usually be registrable in other countries. A notable example is retail services in Class 35. In China, retail services for specific goods (except for retail and wholesale of pharmaceutical, veterinary, sanitary or medical products) are not registrable in Class 35 in China, no matter whether they are under international registrations or national applications, as they are considered to be part of the business’ primary function. Retail for specific goods are protected by the class of the goods. For example, retail for handbags for a particular brand should be protected under Class 18 for handbags.

Despite this, it is not possible to obtain a registration over retail services for specific products in Class 35 in China, it is a common business practice for online platforms, shopping centres and distributors in China to request for proof of a registration in Class 35 when doing business with a brand. As an alternative to ‘retail services for specific products’, applicants may adopt related and standard services, such as ‘sales and promotion for others’, ‘presentation of goods on communication media, for retail purposes’, ‘provision of an online marketplace for buyers and sellers of goods and services’, among others, in Class 35 and obtain a registration over such services to meet the requirements of such Chinese business partners.

Further examples of prohibited goods and services in China that are often registrable in other jurisdictions include cannabis, gambling and astrology services. The rationale behind this is that such goods and services violate the local laws and regulations, are harmful to socialist morality or have other adverse influence.

Notice of refusal and review procedure

Once a trademark application passes the formality examination, it will proceed to substantive examination. If the CNIPA considers that the mark is objectionable on relative or absolute grounds, it will issue a notice of refusal (all goods or services) or a notice of partial refusal (some goods or services). If the applicant does not respond within the prescribed time by filing a review with official fees, the application on objected goods will be refused.

Relative grounds of objection

When examining the similarity of marks, the CNIPA tends to strictly follow the set of rules in the Standards for Trademark Examination and Trial. One noteworthy rule is that each element of a composite mark is examined separately. A citation objection will be raised if an element of a composite mark – such as the English characters, the Chinese characters, the numeral or device part – is similar to the corresponding element of a prior mark. For example, the CNIPA considers the following trademarks to be similar to each other as they contain similar English word elements ‘GENTEC/CENTEK’, the same numerical elements ‘3520’ and similar stylised ‘K’ designs respectively:

For assessing the similarity of goods and services, the CNIPA tends to adhere strictly to the Classification Book. Where the Classification Book classifies certain goods and services to be similar, it is unlikely that the CNIPA will be persuaded by arguments during the review process on dissimilarity of goods or services.

Since the citation objection on one of the elements will very likely block the whole application for a composite mark, applicants who wish to avoid this situation may register the elements of a composite mark separately. It is also advisable for applicants to conduct trademark searches before filing to identify potentially conflicting marks and tackle possible obstacles before filing.

The citation objection may be overcome by various means, such as lodging non-use cancellation actions, acquiring the cited marks and obtaining a letter of consent from the cited mark owner. In relation to the latter, applicants should note that the law does not expressly provide that the submission of a consent letter from the cited mark owner can overcome the citation objection. Rather, to protect the public interest, the CNIPA will assess the likelihood of public confusion that may be caused by the co-existence of the marks when considering whether to accept the consent letters. Accordingly, the applicant must convince the CNIPA that public confusion is not likely. The applicant can demonstrate that the trade channels and target consumers of the two parties’ goods or services are different, and emphasise the difference of the parties’ marks in actual use. If the applicant’s mark is identical to the cited mark, it is highly unlikely that a consent letter will be accepted.

It is not easy to obtain consent letters from Chinese owners, as most of them do not have sufficient understanding of the effect of this letter. Some may even ask for monetary compensation. To obtain consent letters from them, simultaneously filing actions to challenge their prior marks may help exert pressure on the prior mark owners for providing consent.

Absolute grounds of objection

There are a number of common objections worth noting:

• geographical name;
• slogan marks; and
• company names and business nature.

Geographical name: A trademark containing names of foreign places known by the public cannot be registered unless:

• the foreign geographical name is independent from other distinctive elements of the mark, and the place denotes where the applicant comes from;
• the foreign geographical name has other meanings;
• the trademark as a whole bears a different meaning and would not cause confusion as to trade origin; or
• the foreign geographical name is used as a part of a collective or certification mark.

Where a foreign brand owner wishes to include a foreign geographical name in its trademark, it should do so only if such name represents where the brand comes from. Applicants are also recommended to reduce the prominence of the geographical name and place such a name on a separate line to increase its chance of successful registration.

Slogan marks: Slogan and advertisement phrases represent a brand’s identity, and many foreign applicants want to claim their exclusive use. Such slogans and advertisement phrases are often suggestive of the goods or services in question and contain general positive connotations that may not act as a badge of origin. The CNIPA currently adopts a strict approach and rejects slogan marks that lack descriptiveness. An applicant that wishes to register a slogan must demonstrate that its slogan is unique and not descriptive. If the mark has been used extensively in China and acquired distinctiveness through use, it would enhance the chance of success in registering the mark.

Company names and business nature: When a mark contains references to the trade name or company name, or contains references to the business nature of the company, all of which are substantially different from the name of the applicant, the CNIPA may regard them as deceptive and reject registration.

The CNIPA currently tends to reject company names in plain words because they do not serve as a badge of origin. Also, where the trade name in question is not the same as the name of the applicant, the CNIPA would consider such mark deceptive and reject it. For example, the trade name ‘Bank of Africa’ was rejected for being deceptive, since the applicant’s name is ‘Moroccan Bank for Foreign Trade’ rather than Bank of Africa.

Besides, applicants may face objections if they register a trademark with terms that have specific legal meanings in China. A common example is ‘group’, which in China legally means an enterprise group composed of a parent company which owns at least five subsidiaries and fulfils specific requirements on capital. The incorporation of an enterprise group requires approval by the authorities, and only approved enterprise groups can use the term ‘group’. There have been cases where the CNIPA rejects applications for marks containing the term ‘group’ as it considers such a reference inconsistent with the company forms of the applicants. For example, an application by a Swedish applicant with a name containing the letters ‘AB’ meaning ‘limited company’ was rejected on such a basis.

Further, applications containing a description of a business nature inconsistent with the name of the applicant may be rejected. The CNIPA tends to raise objections if such businesses need specific approvals to operate in China, such as educational institutions, medical institutions and banks. For example, a composite mark containing the words ‘bilingual school’ was rejected since the applicant’s name does not indicate that it is a school but an ‘education consultancy company’. The applicant’s company name does not correspond with the business nature stated in the trademark, and the use of terms such as ‘school’ and ‘college’ require prior approval and permits from the relevant authorities which the applicant failed to produce. The mark was also refused on the basis that the scope of the designated services ‘education’ is too broad and can cover non-bilingual education services, which may mislead consumers as to the content of the services.

To overcome the above objections, applicants may produce evidence showing that they have obtained equivalent approvals in their jurisdictions and hence are entitled to use such terms. That said, the CNIPA currently adopts a strict approach, and it may not be easy to overcome the objections by written submissions. It is recommended to avoid including references to company forms, business natures and any other references which are inconsistent with the names of the applicants in order to avoid such objections.

Comment

With China being an increasingly important market for foreign brand owners, it is essential to protect their trademarks effectively. Taking into account the unique trademark practice in China and the fact that numerous squatters are registering foreign brands every day, foreign brand owners should plan their filings immediately and secure registration for their brands in China as soon as possible.