The third amendment to the Trademark Law, which was passed on August 30 2013 and will take effect on May 1 2014, has brought about changes to both the procedural and substantive aspects of trademark practice in China, and some of these changes may also influence the protection of pharmaceutical trademarks. Since the amended law has not yet come into effect, the cases cited here were all decided under the law before its amendment, but this article also discusses potential expected changes to similar cases in future.

Absolute grounds for refusal

According to Article 10.1 of the Trademark Law, the following signs shall not be used as trademarks: "(7) those of fraud that may easily mislead the public in the characteristics such as the quality of goods, or place of production; and (8) those detrimental to socialist morals or customs, or having other negative influences."

The following cases illustrate the examination criteria for pharmaceutical trademarks.

Case 1
Application 4882940 for the trademark VAXEM-HIB was filed by Novartis Vaccines and Diagnostics SRL for vaccines for human purposes, pharmaceutical preparations and biological preparations for medical purposes in Class 5. The rejection of the mark by the China Trademark Office (CTMO) was upheld by the Trademark Review and Adjudication Board (TRAB), and the applicant appealed to the Beijing No 1 Intermediate Court.

The court held that the "HIB" part of the subject mark meant "haemophilus influenzae type B". Although the applicant claimed that the subject mark was used only in the vaccine for haemophilus influenzae type B, the designated goods of the subject mark included "Vaccines for human purposes, pharmaceutical preparations, biological preparations for medical purposes". Thus, if the mark was used on other types of vaccine for human purposes or pharmaceutical preparations, the "HIB" part of the subject mark could cause confusion to consumers, who might consider it to be the drug name, so as to have a negative influence under Article 10.1. Thus the court upheld the TRAB's decision and rejected the mark (June 17 2011).

Comment

This case demonstrates that it is better not to include the name of a disease or other related features of the drug in a trademark because, on the one hand, that part of the mark cannot enjoy exclusive protection against use by others, and on the other, if the designated goods are broader than what is described or indicated by that part of the mark, the whole mark will be rejected.

According to Article 29 of the amended Trademark Law, during the examination process, where the CTMO considers that the contents of the application need to be explained or revised, it may ask the applicant to provide such explanation. Failure to do so has no impact on the CTMO's decision. This new article may allow an applicant to make an amendment during prosecution in a more flexible way - for example, the examiner might allow the applicant to delete the problematic part of the mark (eg, "HIB" in the case above) or revise the description of the goods (eg, limiting the goods to "a vaccine for haemophilus influenzae type B') in order to avoid possible rejection. However, whether to allow such communication and the specific extent of acceptable amendments are at the examiner's discretion.
 

Case 2
Application 7398539 for the trademark ZENPEP was filed by Aptalis Pharma Limited for pharmaceutical preparations for treating gastrointestinal spasm, medicines for human purposes and pharmaceutical preparations in Class 5. The rejection of the mark by the CTMO was upheld by the TRAB and the Beijing No 1 Intermediate Court, and the applicant appealed to the Beijing Higher Court.

The court held that the subject mark as a whole was a coined word and had no specific meaning. When seeing the subject mark, the relevant public in China would not divide the mark into "zen" and "pep", and thus would not consider it to have the meaning of "zen". The TRAB and Beijing No 1 Intermediate Court both neglected the common method of reading by the relevant Chinese public and mechanically divided the subject mark into "zen" and "pep" in order to consider the subject mark to have a negative influence under Article 10.1, which was incorrect. Further, many other marks starting with "zen" have been approved for registration (eg, ZENTASE, ZENNAPAX and ZENVIQUE), proving that the CTMO and the TRAB did not consider that all marks starting with "zen" had negative influence. In order to keep the examination criteria consistent, the subject mark should also be considered not to have negative influence. Thus, the TRAB and Beijing No 1 Intermediate Court decisions were cancelled, and the subject mark was approved for registration (December 17 2012).

Comment

The examination criteria for whether a mark should be divided and examined in terms of the meaning of each part will depend on the recognition of the relevant public in China -  that is, if the relevant public would usually recognise the meaning of each part of the mark, such meaning should be examined to see whether it has negative meaning. In contrast, if the relevant public would not usually divide the mark into parts and would not recognise the specific meaning of certain parts of the mark, such meaning should not be taken into consideration when examining the mark.

According to Article 11 of the Trademark Law, the following signs shall not be registered as trademarks:
    - marks that comprise only the generic names, devices or model numbers of the goods;
    - marks that indicate simply the quality, main raw materials, function, use, weight, quantity or other features of the goods; and
    - marks that lack distinctive character.

However, the signs referred to above may be registered as trademarks if they have acquired distinctiveness through use and are readily distinguishable.
 

Case 3
GlaxoSmithKline LLC filed Application 6883986 for the trademark below (claim colour) in Class 5 for medicines for human purposes, pharmaceutical preparations and medicines for veterinary purposes.

The TRAB upheld the CTMO's rejection of the mark and the applicant appealed to the Beijing No 1 Intermediate Court. The court held that the subject mark was a common profile of a man, which was likely to be considered as a background picture of drug packaging and did not distinguish the source of the goods. Therefore, it was not distinctive enough to be a trademark. In addition, the evidence of use submitted by the applicant showed that the subject mark was always used together with the registered word marks 康泰克 and 新康泰克, with the subject mark covering almost half of the front of the drug packaging, so that the relevant public considered it to be the packaging decoration rather than a trademark. The court upheld the TRAB's decision and the mark was rejected (October 26 2011).

Comment

If the actual use of the mark on the drug packaging had not been considered, the mark's inherent distinctiveness would be reasonable because there was a certain degree of design (eg, the wave shape at the throat and the top of the head), and a specific colour was claimed for the mark. However, the evidence of use submitted by the applicant led the judge to pay more attention to the way in which the mark was used on the packaging (ie, as the background picture rather than as a trademark), which had a negative effect on the applicant's own argument. Imagine if the evidence of use had shown differently - for example, if it had shown that the mark was a much smaller size compared to the font of the word mark, it might have better supported the argument that the subject mark was used as a trademark. Even if the applicant had submitted no evidence of use, the argument of inherent distinctiveness would still have had a chance of being upheld.

Relative grounds for refusal

During the substantive examination of a trademark application, the examiner will search the CTMO database to determine whether an identical or similar trademark has been filed or registered in relation to the same or similar goods before the filing date of the application under examination. If a prior mark is found, the new application shall be refused. The applicant has 15 days from receipt of the notification to appeal to the TRAB.

Pharmaceutical trademarks are assessed for similarity in the same way as other marks, by comparing factors such as:
    - appearance;
    - pronunciation;
    - meaning; and
    - other aspects of such word or device or a combination thereof.

With regard to the similarity of the designated goods, the CTMO relies mainly on the Nice Classification of Goods and Services to ascertain whether the goods fall into the same subclass or subclasses, using cross-similarity notes. In contrast, the TRAB and the courts will usually adopt a more flexible and comprehensive approach to determine whether trademarks, as well as the designated goods, are similar, taking into consideration, among other things:
    - the relevant market;
    - the function of the products;
    - the main raw material used in making the products;
    - the relevant sales channels and venues; and

    - the average consumers of the products.
 

Case 4

The CTMO dismissed Glaxo Group Limited's opposition to Lin Zhongxuan's trademark application. Glaxo appealed, but the decision was upheld by the TRAB and the Beijing No 1 Intermediate Court, and Glaxo appealed to the Beijing Higher Court.

The court held that in determining the similarity of goods, the following factors should be taken into consideration:
    - the function, purpose, manufacturer, sales channel and consumer group; and

    - whether the relevant public would believe that the goods have a connection and easily cause confusion.

The designated goods of the opposed mark (eg, medicated soap, anti-microbial hand lotion and talcum powder) belonged to the class of cleaning products or cosmetics; whereas the designated goods of the opponent's cited mark (ie, pharmaceutical preparations for treating and/or relieving skin disease) belonged to the class of pharmaceutical products. Thus, the function of the former was beauty and cleaning, while that of the latter was treating disease. Further, the manufacturing techniques and procedures differed and the sales channels were also different. Therefore, the court upheld the decisions of the TRAB and the Beijing No 1 Intermediate Court, and the opposed mark was approved for registration (March 31 2012).

Comment

Based on the content of the decision, it is hard to tell what type of evidence was submitted by Glaxo, and particularly whether any evidence supported the similarity or close connection between the relevant goods for each mark. It would be unsurprising to find market evidence that consumers with skin problems might resort to both skincare products in Class 3 and pharmaceutical products for treating skin problems in Class 5. Thus, if a consumer who has previously used some pharmaceutical products bearing Glaxo's mark to treat skin problems sees soaps and lotions with an identical mark, it is highly likely that the consumer would consider them to be from the same source (ie, Glaxo). Furthermore, today many drug stores sell not only drugs, but also cosmetics and cleaning supplies, meaning that the goods of both parties may appear in the same shops.

Both judges and examiners rely on the facts proven by the evidence submitted, rather than on their own imagination. Particularly in cases which depend on the argument of the similarity of goods which are in different classes and are generally considered different, the amount and quality of evidence supporting the likelihood of confusion are crucial.

This article first appeared in World Trademark Review magazine issue 47, published by The IP Media Group. To view the issue in full, please go to www.worldtrademarkreview.com.