Foreign brand owners can file trade mark applications in China as national applications or International Registrations (IRs) under the Madrid Protocol. There are pros and cons to each route and brand owners may find it difficult to make a decision on the filing approach. There are no easy answers to this subject but specification coverage is always one of the key considerations as specification defines the scope of protection of a trade mark registration. A better understanding of the unique classification of goods and services and examination practices in China will undoubtedly assist brand owners in making more comprehensive decisions.
I. Sub-class system in China
China adopted the Nice Classification of Goods and Services (“Nice Classification”) (currently, 11th edition, Version 2020) which is an international system for categorising goods and services into appropriate classes. The China National Intellectual Property Administration (CNIPA) also developed its own unique sub-class system whereby goods and services under each Nice class are classified into sub-classes, and some sub-classes are further categorised into different groups. The subclasses are listed out in a local standard classification manual together with the descriptions of goods and services in Chinese (“Chinese Classification Manual”).
The Chinese Classification Manual is the main reference that the CNIPA examiners rely on. Essentially, the general principles adopted by the CNIPA examiners are:
- goods and services in the same subclass are deemed similar (unless otherwise specified in the Chinese Classification Manual);
- certain goods and services under different classes and subclasses are regarded as similar and will be cross searched with each other as specified in the Chinese Classification Manual;
- descriptions of goods and services not listed in the Chinese Classification Manual are considered non-standard; and
- during the substantive examination stage, an applied-for mark is typically only cross-checked against identical or similar prior mark(s) under the same sub-class or other sub-class(es), or sub-group(s) where goods and services thereof are deemed similar.
Sub-class systems are not uncommon in Asia as they serve to encourage more predictable examination results. For example, the Japan Patent Office (JPO), Korean Intellectual Property Office (KIPO) and Taiwan Intellectual Property Office (TIPO) adopt “Similar Group Codes” which correspond to the Nice Classification. Goods/services are assigned with Similar Group Codes and those with overlapping codes are considered to be similar to each other.
II. Standard Text Descriptions
Why does the CNIPA insist on standard text descriptions?
Currently, the CNIPA administers over 13 million pending and registered trade marks. The CNIPA received over seven million applications and completed examination on over eight million applications in 2019.
With the revision of the China Trade Marks Law in 2014, the examination of applications has to be completed within an average of nine months. Facing an overwhelming number of applications and the pressure to expedite the examination process, a mechanical examination standard is a solution for the examiners whereby applications with non-standard descriptions of goods/services will likely be objected. Standardised descriptions also allow examiners to categorise goods/services into the relevant sub-classes more easily and quickly, which can then facilitate substantive examination of the similarity of goods and services as determined by the sub-class(es). This mechanical approach to examination significantly raises efficiency. In 2019, the CNIPA met the goals set by the State Council, and the examination period of trade mark applications further decreased to an average of around four to five months.
Are IRs exempt from the standard text descriptions?
The examination standard of the CNIPA for IRs, insofar as specifications are concerned, is relatively more lenient than that for direct filings in China. The examiners of the CNIPA often exercise their discretion to accept non-standard descriptions covered by IRs. The designated goods and services will likely be accepted by the CNIPA (including non-standard ones) if they do not exceed the scope of the class covered by an IR.
However, the CNIPA does not blindly accept all non-standard descriptions covered by IRs. The CNIPA generally does not accept descriptions for retail services except those for pharmaceutical, veterinary and sanitary preparations and medical supplies, and also forbidden descriptions e.g. gambling services which are illegal in China regardless of whether the application is filed locally or via IR extension.
All in all, the IR route provides leeway for brand owners to possibly cover non-standard descriptions in the specifications in China. This is particularly useful when brand owners cannot choose descriptions from the Chinese Classification Manual that specifically fit their needs for describing innovative products and technologies or particular products and services. Specific descriptions may also allow more room for a brand owner to negotiate for co-existence of marks with earlier marks, and may also make it easier to prove use of a registered mark during non-use cancellation proceedings.
III. Common problems relating to specifications in China
- Inappropriate classification by the CNIPA of an IR
- Gaps in sub-classes of an IR in China
- Only limited retail services are acceptable descriptions
- Inaccurate description of the goods/service may raise the vulnerability of the registration based on non-use
When IRs are extended to China, the examiners of the CNIPA will translate the specifications of the IRs into Chinese and assign the sub-class(es) for the designated goods and services at their sole discretion, without consulting the brand owners. This creates potential issues, such as: the choice of sub-class(es) selected by the examiners may not cover the essential ones, or the translation by the examiners may not accurately reflect the descriptions intended to be covered by the brand owners.
As goods and services categorised under different subclasses are presumed to be dissimilar (unless specified otherwise in the Chinese Classification Manual) in China, the inappropriate classification of the specification will be detrimental to the protection of an IR in China. A brand owner may request the CNIPA to rectify any mistakes made. However, the issue may not always be brought to the attention of the brand owner, especially when the IR proceeds to registration smoothly without involving any local agents who are more familiar with the classification practice in China.
The specification of an IR usually will not cater to the sub-class system in China and is limited by the basic application or registration. Some basic applications/registrations may have a rather narrow specification in order to comply with the local practice. For example, the specifications in the United States of America tend to be specific due to the local requirement to prove use. If an IR only covers a narrow specification, it is very likely that the coverage of sub-classes under the Chinese practice will be insufficient.
Taking the Nice class heading “clothing; footwear; headgear” of Class 25 as an example, brand owners may assume that the specification will be sufficient to cover various clothing items. However, such description in China will not cover goods such as socks, gloves, ties, scarves, belts, albs, sashes for wear, shower caps, sleep masks, hairdressing capes and wedding dresses etc. which are generally regarded as clothing items elsewhere. As the aforesaid goods are categorised under other sub-classes of Class 25, they are considered to be dissimilar to “clothing”.
The insufficient coverage of sub-classes in China may give trade mark pirates an opportunity to fill the gap by filing for identical or very similar trade marks in sub-classes not covered by a brand owner’s application or registration in China. This may exclude brand owners from using their own marks on their goods and services of interest and affect their trade mark enforcement rights in China.
Many countries accept trade marks in relation to retail services. However, the CNIPA currently only accepts retail services for pharmaceutical, veterinary and sanitary preparations and medical supplies and will reject the descriptions concerning retail services of other goods.
Many brand owners use the standard descriptions “sales promotion for others” and “provision of an online marketplace for buyers and sellers of goods and services” which are considered to be the closest equivalent of retail services in China. The courts have adopted different views on whether “sales promotions for others” are similar to retail services. Whilst there are court decisions accepting use of disputed marks in relation to store merchandise sales services and retail supermarket services respectively, as similar to “sales promotions for others”, there are also court cases that resulted in completely different decisions.
Without express acceptance of “retail services (except for pharmaceutical, veterinary and sanitary preparations and medical supplies)” or any clear guidelines issued by the CNIPA, it remains uncertain as to how trade marks in relation to retail services are protected in China.
In China, a registration will become vulnerable to non-use if the mark has been registered for over three years. Generally, evidence of use of one designated item could be considered sufficient to maintain the entire registration covering other items (irrespective of sub-classes). However, if review of the non-use cancellation decision is filed, the whole sub-class of a registration may be cancelled when the registrant cannot prove use for at least one designated item in each sub-class of a registration.
In 2019, the Beijing High People’s Court issued the “Guidelines for the Trial of Trademark Right Granting and Verification Cases” which mentioned in Article 19.4 that if a registrant only uses the disputed mark on “similar goods or services beyond the approved scope”, it will not be considered sufficient use for maintaining the trade mark registration. As such, if the description of goods or services is not accurate, it may put the registration at a high risk of being cancelled based on non-use when the actual use of the mark deviates from the specification.
IV. Recent update of the Chinese Classification Manual
Introduction of New Items
The Chinese Classification Manual is regularly updated. The CNIPA has recently updated the Chinese Classification Manual (effective on 1 January 2020). Below is a non-exhaustive list of the changes:
- The Chinese character “奶”(i.e. Chinese translation of “milk” ) has been adopted to replace the Chinese characters “牛奶” (i.e. milk of cows in Chinese) in Classes 1, 5, 11, 21, 29, 30 and 32 such that the literal meaning of the milk products concerned in Chinese will also cover milk of other animals.
- Various Traditional Chinese medicine has been added to Class 5 under sub-classes 0501 and 0502;
Under the Chinese Classification Manual (10th edition), only the goods “locks, electric” under sub-class 0920 of Class 9 are considered similar to all goods (except “keys of metal”) in sub-class 0610 of Class 6.
In the 11th edition, the CNIPA has categorised “electronic access control systems for interlocking doors” in the same group as “locks, electric” and added the descriptions “biometric fingerprint door locks” and “padlocks, electronic” to sub-class 0920; thereafter, all the aforesaid goods in sub-class 0920 are considered similar to (i) all goods (except “keys of metal”) in sub-class 0610 and (ii) “padlocks, other than electronic, not of metal” in sub-class 2014.
A new sub-class 2611 has been added to Class 26 and the goods “breast lift tapes” are categorised under this sub-class as individual goods.
This change is particularly important as sub-class 2611 is a completely new addition to the Chinese Classification Manual. It also means that the previous existing trade mark registrations will not have coverage in this sub-class and trade mark pirates may take advantage of this situation.
- The goods “nostoc flagelliforme” in sub-class 2912 of Class 29 have been removed from the Chinese Classification Manual as it has become illegal to collect, purchase, process, sell and export nostoc flagelliforme (a type of blue-green algae) in China.
- The only description “services for the relocation of businesses” categorised under sub-class 3505 of Class 35 has been removed from the Chinese Classification Manual.
The introduction of the new items allows for more choices when selecting standard descriptions from the Chinese Classification Manual. On the other hand, as the lists of descriptions of the Manual are finite, it is impossible to cover all specific items.
How to get a specific non-standard item included in the specification in China?
If a brand owner wishes to include specific non-standard descriptions in a national application, it is possible to include a written statement explaining why such descriptions should be accepted, together with the trade mark application form at the time of national filing. As examiners have the discretion to accept non-standard descriptions, written statements that help the examiner’s understanding of the non-standard descriptions can raise the chances of acceptance of such items. If a Notice of Rectification is still issued regarding the non-standard descriptions, the applicant may not need to incur further costs to persuade the examiner, or may simply delete or amend the description to standard ones.
Alternatively, the brand owner may include non-standard descriptions without a written statement. If the CNIPA issues a Notice of Rectification against the non-standard descriptions, the brand owner may file a response with supporting materials to persuade the CNIPA that such descriptions should be accepted. Under the current examination practices, the CNIPA only allows applicants to amend the specification of goods and services once. If the objectionable description(s) are not amended to acceptable or standard description(s), or deleted, the entire application will be rejected.
V. Best Practices
- It is advisable to file trade mark applications for key marks via national filings and include as many sub-classes as possible for broader protection. This can deter bad faith filers or squatters from filing identical or very similar trade marks in sub-classes that are not covered by a brand owner’s applications.
- It is recommended to include only standard descriptions from the current version of the Chinese Classification Manual in trade mark applications in China. This can avoid objections to non-standard descriptions, which will incur additional costs and cause delays to registration.
- If a brand owner would like to cover non-standard descriptions in a trade mark application, the brand owner may file an IR designating China as the chances of receiving an objection against non-standard descriptions is generally lower.
- If a brand owner intends to cover non-standard descriptions in a national trade mark application in China, it is advisable to also include standard descriptions which are general enough to also cover the non-standard descriptions. In this case, the applicant can feel more comfortable deleting the objected non-standard descriptions or amending them to standard ones, knowing that there are general descriptions that may arguably cover the objected descriptions.
- IRs designating China usually face the issue of insufficient coverage of sub-classes. It is advisable to review the protection of IR in China and assess whether additional direct filing in China is necessary for protection and/or defensive purposes.
- If a brand owner would like to cover retail services (except for pharmaceutical, veterinary and sanitary preparations and medical supplies) for a trade mark, it is advisable to include services such as “sales promotion for others” and “provision of an online marketplace for buyers and sellers of goods and services” as well as goods for which the mark is marketed. This may offer interim protection or grounds for enforcement in China before the CNIPA officially accepts retail services.
- If Class 26 is important to a brand owner’s key mark(s), it is advisable to review and assess whether additional filing covering the new sub-class 2611 in China is necessary.