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All thought and no action in trademark prosecution is a losing combination in China
date: 2018-06-13Christy Li

Having a thorough knowledge of the trademark filing system is key to obtaining IP protection, but knowing what to register is only the first step to ensure that the process runs smoothly.

China applies the first-to-file principle in trademark prosecution – the legal process of registering a trademark over certain goods or services. Rights holders should file applications for all commercially used, long-term trademarks with the local authority as early as possible. However, the question arises as to what they should focus on before and during prosecution.

All marks are subject to examination with regard to formality, inherent registrability and distinctiveness from prior citations. Knowing how to smooth out this process is key to registering a mark successfully.


Smart selection

First, rights holders should consider how to choose which marks to apply for. Applications can be filed for any word, device, letter, number, three-dimensional symbol, colour combination, sound or combination thereof that identifies and distinguishes the origin of goods or services.

However, a trademark not only distinguishes a company’s goods or services, but also symbolises the company’s spirit. When choosing a mark, the company ethos should be taken into consideration to ensure that the mark is consistent with the corporate vision – the hidden value of an enterprise – and that it is easily understood, recognised and remembered.

Second, rights holders should know the requirements for inherent registrability. This is the statutory basis set in the Trademark Law. Pursuant to Articles 10 and 11 of this, a trademark cannot be:

    -    identical or similar to a sign relating to the government, religion or politics (eg, a coat of arms, flag, national anthem, red cross or official checking sign);

    -    deceptive or scandalous;

    -    a generic term (eg, a common name, shape or mode of goods or services); or

    -    descriptive of the goods or services covered.


In addition, a mark that fails to distinguish the source of goods or services cannot be registered unless it can be shown to have acquired distinctiveness through long-term use.

Third, close attention should be paid to avoid similarities with prior marks. Rights holders should conduct a formal, exclusive search of the China Trademark Office (CTMO) online database. Where prior marks exist, adding the company’s name to its mark could help not only to distinguish it from prior citations, but also to establish reputation.

Finally, maintaining a clear understanding of the scope of business in which the trademark can be used is key. Once a trademark has been filed, its specifications cannot be amended to cover a broader scope of goods or services. Instead, a new application must be filed. Therefore, it is better to include standard goods and services in accordance with the Nice Classification of Goods and Services. The CTMO offers rights holders one opportunity to amend their specifications. If the application remains unregistrable, the trademark will be dismissed, the filing date will be lost and a new application must be filed. Where the Nice Classification is limited or outdated, the CTMO will allow non-standard specifications, provided that relevant pictures and explanations are filed simultaneously. However, this does not guarantee approval of the application.

Registering a mark over a related class that you do not intend to cover but wish to prevent others from covering is crucial in China, where thousands of applications are filed each day. For example, clothing companies should file registrations covering accessories and jewellery in order to avoid confusion with other enterprises. Failure to do this may result in protection being refused.

The Chinese trademark system follows the principle of ‘what you see is what you get’ and changes to registered marks are prohibited. As a result, the registration must accurately depict the mark that is used and will continue to be used. Further, filing a black and white trademark will obtain broader rights than filing a colour mark, as rights holders can use any colour if they have registered their mark in black and white. Indeed, rights holders can seek protection for colours only if their application is filed as a colour mark.


Filing strategies

Following the first-to-file principle, rights holders should file applications early to claim the available priority. As China is a signatory to the Paris Convention, applicants can file new applications claiming foreign-application priority within six months of filing a foreign application. In this case, the filing information – including details of the applicant and the trademark (eg, the font and colour) – should be identical to that on the foreign application. For example, where a foreign mark is filed in colour, the Chinese mark must also be in colour. The sole exception is that the specification scope of the Chinese mark may be approved despite being narrower than that of the foreign application, provided that the designated goods and services are the same.

Where a trademark covers goods or services in multiple classes, it falls to the rights holder to decide whether to file a single-class or multi-class application. The classes covered in a multi-class application can be separated only when the application encounters a partial refusal. By comparison, single-class applications offer increased flexibility, especially when the two types of application cost the same.


Risks of refusal

The CTMO and the Trademark Review and Adjudication Board (TRAB) decide whether a mark is registrable. If the CTMO refuses to register a mark, the rights holder can appeal to the TRAB for further examination.

Examiners often refuse registration based on absolute or relative grounds pursuant to Articles 10, 11, 30 or 31 of the Trademark Law.

Applications for Chinese government signs or special signs (eg, RED CROSS) violate Articles 10.1.1 and 10.1.5, and refusal is rarely overcome on appeal. However, rights holders may be able to overcome official action pursuant to Articles 10.1.2 to 10.1.4 relating to similar signs depicting foreign countries’ governments, international organisations or official checking signs, provided that they can prove agreement or authorisation from the local government or organisation. The registration certificate of the same mark in the relevant country or the authorisation letter issued by the relevant organisation constitutes sufficient evidence. However, a refusal based on the mark being deceptive, discriminatory or negative is difficult to overturn.

A geographical name can be registered, provided that the rights holder can prove that it has acquired a secondary meaning which is more popular than the geographical connotation (eg, Huang shan).

If a mark is descriptive of its goods or services, it will be refused pursuant to Article 11 of the Trademark Law, unless it has acquired distinctiveness through use and is readily distinguishable.

Where a mark is refused on the grounds of descriptiveness, the burden of proof falls on the applicant to demonstrate that it has acquired sufficient distinctiveness through use. Consumer investigation reports and surveys demonstrating that there is no confusion in the marketplace can be helpful.

Most refusals are issued pursuant to Articles 30 and 31 of the Trademark Law, on the grounds that the trademark is confusingly similar to a prior registered or published mark. Again, the rights holder bears the burden of proving that there are no confusing similarities between the marks. Grounds for argument include:

  • the marks are visually, phonetically or conceptually dissimilar;

  • the goods or services concern different sales channels, target consumers and functions; and

  • confusion is impossible.

However, examiners usually consider the similarities between marks and the goods or services regardless of the marketing facts. For example, where the sales channel and the business scope of the specifications are different, the parties are unlikely to encounter each other; therefore, their marks are unlikely to cause confusion. In such cases, rights holders should disclose blockings by conducting a thorough search before filing. Thus, cancellations or invalidations can be filed providing the authority with sufficient time to wait for the final status of the blockings before making a decision. If a mark has been registered for over three years and the applicant finds no trace of use, a cancellation action may be filed based on non-use. In this case, the trademark owner must submit evidence of constant use in commerce.

Alternatively, invalidation requests can be submitted against any factor that causes the rights holder to believe that the blocking registration violates absolute or relative grounds. However, invalidation is limited to five years on relative grounds, unless the applicant claims well-known status of its mark and proves that the disputed mark has been filed in bad faith.

Conversely, if the trademark owner contests the likelihood of confusion, it may negotiate a coexistence agreement. The agreement must be notarised and legalised, outlining the reasons that the registrant of citations has approved the registration of the blocked mark. Identical marks are excluded from coexistence negotiations. In China, trademark rights override private rights and coexisting identical marks covering confusingly similar goods or services will cause confusion in the market, which damages consumer interest.

To proceed with an application for a partially refused mark, the rights holder may separate the primarily approved goods or services. As such, only the conflicting goods or services will be reviewed. Alternatively, the applicant can remove the refused goods or services directly if these are not the concerned items.

When encountering blockings during trademark prosecution, rights holders should take appropriate action to progress with their application.

Knowledge of the requirements for filing an application, combined with forethought and timely action, will ensure a smooth and successful filing strategy.


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