Brief Overview of Trademark Refusal in China

2016-08-26
BORSAM IP
BORSAM IP  ————————————————
Brief Overview of Trademark Refusal in China

As in most countries whose IP law is modeled around WIPO and the international covenants, the trademark registration process in China is preceded with both a formal and substantive examination. The formal requirements are generally easily met, however the substantive requirements tend to be more comprehensive and the failure to meet the standards often brings a provisional refusal or partial refusal.
 
In general, the substantive requirements are examined having regarded to:
 
a. Descriptiveness: To check whether a trademark functions solely to provide information about the goods and services affiliated with the trademark.
 
b. Distinctiveness: Ensuring the trademark is capable of being represented graphically and of distinguishing goods or services of one individual or organization from those of other individuals or organisations.
 
c. Deceptiveness: Ensuring a trademark not intended (by virtue of its nature, quality, geographic origins of the goods and/or services) to deceive the public.
 
d. Conflict: To ensure the trademark does not conflict with an earlier registration, prior filed application or earlier unregistered rights resulting from an official search.
 
e. The existence of any conflict with any PRC Trademark Law.
 
Taking into consideration these points, and the realities we have encountered, these are the three most common reasons for refusal:
 
1. Distinctiveness – A lack of distinctiveness is quite common, however such a deficiency is usually relatively easy to overcome. In accordance with Article 11(2) of the PRC Trademark Law the signs under the submitted under the preceding paragraph may be registered as trademarks when they have acquired distinctive features through use and have become readily identifiable. An example of this is the successful registration of “支付宝 (known as Alipay)”. As you may know, 支付宝 is a third-party payment platform. Strictly speaking, “支付” has the meaning of “payment” which because of its generality shall not be trademarked – but because it met the distinctiveness test, it was able to be successful.
 
2. Deceptiveness – Another major reason for refusal is when a trademark can be considered having the nature of deceptiveness, or having unhealthy influence. A particularly interesting case we worked on was when the subject’s trademark (appearing as a skull-like image) was refused as the examiners deemed the logo horrific, and that its use may be an unhealthy influence. Through the appeal procedures, we were able to convince the examiner that the use of a skull in popular culture is becoming more common. With evidence of the trademark being used in Chinese territory, we finally won the right for our client to be able to have the exclusive rights to its use. Our attitude when dealing with these kind of cases is based around the concept of never give up – particularly if the design or subject of the trademark is particularly important to you. Different examiners may have various opinions, and considering the rate at which society is developing, peoples minds and ideas are changing rapidly.
 
3. Finally, the third most common reason for refusal to grant a trademark right is that Prior Rights exist. A response to this refusal usually requires a basic comparison of the trademark and with the cited trademark(s). Pronunciation, meaning and shape is all essential but not sufficient in itself. A supplementary statement in which the popularity of the trademark and its proprietor is helpful, as is a proper consideration of the status if the cited trademark(s) or any possible relationship between the applicant and the proprietorof the of the cited trademark(s). Where a cancellation request of non-use for three years proves to be workable, or a claim of subjective malice of the proprietor of a cited trademark(s) is able to be supported, the success of an appeal is likely. The effect of a letter of content authorized by the prior rights holders has not yet been clarified, but undoubtedly has some weight when the examiner is making a decision.
 
China is a First to file jurisdiction and “actual use” is not a mandatory factor or a basis to establish rights to a trademark. Despite this, the relevant evidence and evidentiary materials are integral to obtaining the final approval of many trademarks. As such, when you decided to develop your market interest in China, do not hesitate to collate anything that may be relevant – it may be the difference between approval or not in the future.