Trademark Registration and Prosecution Strategies in China
date: 2013-09-06 Gloria Q. Wu Read by:

With over 1.4 million new trademark applications filed to China Trademark Office in 2011, which number is continuously growing at about 30% annually, it is no wonder that it is getting more and more difficult to successfully complete a trademark registration in China, especially trademarks consisting of existing words/characters with positive meaning.

Due to the different policy and principle of the trademark registration and application in China than many other countries, foreign applicants frequently encounter difficulties, problems as well as confusion during trademark prosecution at China Trademark Office (hereafter referred to as "TMO"). Below are some tips and advice for those who are planning to or are already filing trademark applications in China.

Localization of Trademarks in China

As we all know, Chinese language is a totally different language system from Latin language. The most fundamental and basic elements of Latin language are the letters such as "a", "b", "c"; while the basic elements in Chinese language are all shapes of parts of characters. Because of such huge differences between the languages, and because of the fact that among the 1.3 billion population in China, only 1/4 of them are learning English, it would be crucial to have a Chinese version of the Latin trademark if the applicant are seriously planning to develop business in China.

So how to select the right or appropriate Chinese equivalent of the original trademark would be the first question before filing the application and trademark registration. Generally there will be three types: translation, transliteration and combination of both translation and transliteration.

After the applicant has selected the Chinese characters as equivalents to the brand, either as translation or transliteration or both, there is something more the applicant should note: which version of characters to choose? The simplified version or the traditional version? Usually the traditional version looks more complicated with more parts of the character. Normally, if the applicant wants to show that the brand has a very long history or there is a nostalgic sentiment to be conveyed by the brand, the traditional version may be a better choice than the simplified version; otherwise, it would be recommended to choose the simplified version, because it is more widely used and understood in people's daily life than the traditional version.

Another task in selecting Chinese equivalent is to check how they are pronounced exactly not only in Mandarin, but also in Cantonese and other dialects in China, depending on which provinces the applicant wants to cover for business development. The reason of doing this is to avoid unexpected embarrassment because some elegant terms in Mandarin may have negative connotations in other dialects, which will tarnish the brand and turn it into a black joke.

Then it comes to the design of the Chinese trademark, whether the applicant wants the standard version, or the stylized version.

So, with all these aspects in consideration, the applicant may say that it will take a long time for selecting, checking, designing and finalizing the Chinese trademark to complete trademark registration. But please also remember the "first-to-file" principle. From the first moment the English mark is used in China or is known in China, there may be Chinese versions of it given by the public if the applicant does not offer the Chinese equivalent of the mark at the same time, which will be very dangerous. The applicant may not even know that consumers are calling its brand with something foolish or indecent in Chinese; or someone else may file the Chinese version before the applicant finishes the design. So the strategy is filing a Chinese equivalent immediately and then if the applicant comes up with something better or more appropriate later, file that as trademark again, and the applicant may abandon the first one.


Specifications in Trademark Application

The second issue in trademark application would be the specifications. Recently China Trademark Office has updated the Chinese Classifications of Goods & Services according to the 10th edition of Nice Classification (2013), in which "retail and wholesale services of pharmaceuticals" as well as several other items related to "retail and wholesale services" are added into Class 35. It is the first time ever that China accepts items containing the wording "retail and wholesale services" in trademark applications; however applicants need to submit business license photocopies to show their scope of business indeed covers such field, otherwise, the application will be rejected.

Under the current law, since multi-classes and series applications are not acceptable in China, if any applicant intends to register a same trademark for goods in different classes, a separate application for registration should be filed in respect of each class of the prescribed classification of goods.

Please note that headings of class or subclass are not acceptable as specifications in application, and we need to select the specific items. Another common mistake would be the scope of coverage. Some items are not as broad as they sound. For example the item "clothing" sounds like a very general concept covering everything in Class 25, but it is not true. The item "clothing" falls in subclass 2501 and its scope of protection is limited to this subclass 2501, and other goods such as "raincoat, shoes, hats, socks, etc." from other subclasses are considered different goods and are out of the protection scope.

So if the applicant wants to have a broader scope of protection, it should pick at least one item from each subclass in the certain Class, and pay attention to the special notes about the cross-similar items.

Office Action of Amendment over Specifications

After the trademark application is received by the Trademark Office, and a filing receipt is issued in around one month, the application will go through the formality examination, which focuses on the specifications, and the applicant may receive office actions requesting to amend certain goods or services in the specifications.

Recent years, the examination of the specifications for trademark registration is increasingly strict. It happens sometimes that those goods or services acceptable in the past are rejected now due to the stricter examination.

In order to overcome such Office Action, there are usually three ways:
1) Amending the questioned item into the standard item directly. If there is standard item which has similar meaning to the questioned item, it is recommended to amend it into such standard item, so that the Office Action can be easily overcome.

2) Re-wording the questioned items to include the standard item as key part. Sometimes there is no standard item that can express the same or similar meaning of the specific questioned item. In such case, we can re-word the questioned item in a way to include the standard item as its key part. In the response to the Office Action like this, it is better to provide a brief explanation of the function and characteristics of the goods/services so that the examiner could have a better understanding of it.

3) If neither of the above ways of amendment could describe the intended goods/services correctly or if the applicant insists the original expression. We may try to explain to the examiner the function and characteristics of the goods/services and explain why such item falls in this specific Class. If the same item was accepted by the TMO in any previous application, we may provide such example to the examiner for reference. However, such way has a high risk of being rejected by the TMO, and the examiner may issue a second Office Action insisting that the applicant should amend the questioned item into standard item.


Official Rejection in Substantial Examination

Once the formality of a trademark application is in order, it will move into the stage of substantial examination, which may lead to one of the three results, i.e. 1) preliminarily approved and published on the Official Gazette, 2) rejected based on absolute and/or relative ground, and 3) partially approved and partially rejected.

1. Absolute Ground of Rejection

Trademarks violating Article 10 of Trademark Law are not allowed to be registered or used:

Article 10: "The following signs shall not be used as trademarks: 
(1) those identical with or similar to the State name, national flag, national emblem, military flag, or decorations, of the People's Republic of China, with names of the places where the Central and State organs are located, or with the names and designs of landmark buildings; 

(2) those identical with or similar to the State names, national flags, national emblems or military flags of foreign countries, except that the foreign state government agrees otherwise on the use; 

(3) those identical with or similar to the names, flags or emblems or names, of international intergovernmental organizations, except that the organizations agree otherwise on the use or that it is not easy for the use to mislead the public; 

(4) those identical with or similar to official signs and hallmarks, showing official control or warranty by them, except that the use thereof is otherwise authorized; 

(5) those identical with or similar to the symbols, or names, of the Red Cross or the Red Crescent; 

(6) those having the nature of discrimination against any nationality; 

(7) those having the nature of exaggeration and fraud in advertising goods;
(8) those detrimental to socialist morals or customs, or having other unhealthy influences. 

The geographical names as the administrative divisions at or above the county level and the foreign geographical names well known to the public shall not be used as trademarks, but such geographical terms as have otherwise meanings or are a part of collective marks/or a certification marks shall be excluded. Where a trademark using any of the above-mentioned geographical names has been approved and registered, it shall continue to be valid."


The rejection for trademark registration due to the reasons listed above is usually difficult to be overcome because these are inherent defects of trademark and would be more strictly examined by the TMO and Trademark Review & Adjudication Board (hereafter referred to as "TRAB").

However, there are some exceptions in practice as long as the applicant could submit evidences proving such:
1) Where the rejected trademark includes word same or similar to China or any foreign country name, the word has other specific meaning, and would not cause confusion among the public;
2) Where the rejected trademark includes word indicating China, the trademark as a whole is the name of newspaper, magazine, or officially registered entity's name in China;
3) Where the rejected trademark includes word indicating China, the trademark has other distinctive part independent from the word indicating China, and the applicant is a Chinese citizen or Chinese entity;
4) Where the rejected trademark includes a foreign country name, that foreign country has approved, e.g. the same trademark has been approved for registration in that country;
5) Where the rejected trademark includes a foreign country name, the trademark as a whole is same as the name of the applicant;
6) Where the rejected trademark includes a foreign country name, the trademark has other distinctive part independent from the word indicating foreign country name, and the applicant is from that country.

Therefore, in order to overcome rejection for trademark registration on the basis of Article 10, the applicant needs to argue and provide sufficient evidence to convince the examiner that the trademark falls in one of the above exceptions.

Trademarks violating Article 11 of Trademark Law are not allowed to be registered.

Article 11 The following signs shall not be registered as trademarks:
(1) those only comprising generic names, designs or models of the goods in respect of which the trademarks are used;
(2) those having direct and only reference to the quality, main raw materials, function, use, weight, quantity or other features of the goods in respect of which the trademarks are used; and
(3) those lacking distinctive features.
The signs under the preceding paragraphs may be accepted for trademark registration where they have acquired the distinctive features through use and become readily identifiable.

In order to overcome rejection of Article 11, the arguments usually include:
1) the trademark is inherently distinctive; and
2) the trademark has acquired or strengthen distinctiveness through use and become readily identifiable.

In actual practice, the first argument "inherent distinctiveness" can hardly be supported since the TRAB generally shares the similar examination criteria regarding "distinctiveness" as the TMO; as for the second argument "acquired distinctiveness", simple use evidence alone may not be sufficient; instead, the use evidences need to be sufficient and strong enough to show that the trademark is recognized by relevant public as a sign to distinguish the origin of goods or services.

Trademarks violating Article 11 of Trademark Law are not allowed to be registered.

Article 12 Where an application is filed for registration of a three-dimensional sign as a trademark, any shape derived from the goods itself, required for obtaining the technical effect, or giving the goods substantive value, shall not be registered.

The rejection rate of 3-dimension trademarks is much higher than other types of trademark, especially those indicating the shape of product that is considered purely functional or common. Therefore, it is recommended to add more distinctive elements into the 3-dimension trademark when filing to increase the level of distinctiveness of the trademark as a whole.


2. Relative Ground of Rejection

According to Articles 28 and 29 of China Trademark Law, trademarks same or similar to any prior trademark either registered or pending over same or similar to designated goods or services shall be rejected.

In order to overcome such rejection, there are generally four types of arguments and measures:

1) Argument of dissimilarity of trademarks: in comparison of trademarks, TMO adopts "part-to-part" examination, namely English part compares to English part, Chinese characters compares to Chinese characters and device compares to device; whereas the TRAB would usually take a more comprehensive consideration of the overall appearance meaning and pronunciation as well as distinctive part of the trademarks. Thus, the argument in the review of refusal could focus in this regard trying to convince the TRAB examiner that the likelihood of confusion is low.

2) Argument of dissimilarity of designated goods/services: as mentioned above, the goods/services will be deemed similar if they fall in the same subclass or cross-similar according to the special note in the Chinese Classifications. Considering the fact that the TRAB usually has the similar examination criteria over the similarity of goods/services, the argument of dissimilarity of designated goods/services can hardly be supported.

3) Non-use Cancellation against the cited mark: if the cited mark has been registered for over 3 years, it is available to file a non-use cancellation against it. As long as the registrant fails to provide sufficient use evidences to TMO, the cited mark will be removed, and the rejection based on such cited mark can be overcome. 

4) Opposition or Dispute Cancellation against the cited mark: if the cited mark was filed in bad faith or the applicant of the rejected mark enjoyed any prior right before the filing date of the cited mark, the applicant may choose to file an opposition or dispute cancelation in order to remove the cited mark.

5) Negotiation for Co-existence Agreement: the applicant may consider negotiating with the registrant of the cited mark to reach a co-existence agreement, which will be helpful to some extent to the review case. However, the examiner has final discretion as to whether or not to accept it.

6) Negotiation for Trademark Assignment over the Cited mark: the applicant may also consider negotiating with the registrant of the cited mark to purchase the cited mark. If the cited mark could be assigned to the applicant, there will be no conflict of interest, and the trademark will be finally approved by the TRAB.

To sum up, there are many skills and strategies to be implemented in order to obtain trademark registration in China smoothly and with broad scope of protection. As in many other countries, filing the trademark application as early as possible is always recommended.

As the draft of 3rd Amendment of China Trademark Law is now under the final review at Legislative Affairs Commission of National People's Congress, we expect it may be issued in 2014 hopefully.