Introduction

This page has a glossary of concepts for Chinese law in the trademark applications topic. You can find a general overview of China trademark law at CBL’s .

Distinctiveness

In Chinese trademark law, distinctiveness is the quality that enables consumers to distinguish between various goods and services containing trademarks, thus allowing them to rely on the trademark’s design to identify the origin and qualities of these goods and services. A trademark can acquire distinctiveness either by being inherently distinctive or by gaining distinctiveness through use.

A trademark is considered distinctive in the context of all the factors present. This means that the trademark is considered as a whole. The only exception to this rule is for marks that have absolutely no distinctiveness, such those that only indicate quantity, raw material, function, weight, and other generic concepts. Therefore, a trademark with a few undistinctive elements can nonetheless still be considered distinctive overall.

As implied by how Chinese trademark law views trademarks as a whole and their use in context, a trademark can acquire distinctiveness if used long enough for the consuming public to recognize it. Therefore, examiners must consider the full context, including how the mark is used, even if the mark itself does not look distinctive.

For example, the international chain of Chinese restaurants “Little Sheep Mongolian Hot Pot” uses words that describe the tender and juicy raw material used in its dishes–implying young sheep cooked at a tender age in the Mandarin, not just physically small sheep. Despite this descriptive nature, the mark has nonetheless acquired distinctiveness in China.

The distinctiveness determination must be made in view of the associated goods and services. For instance, the Chinese cell phone brand “Xiaomi” literally means “millet” in Mandarin, and discussing distinctiveness outside of its context would be pointless. In the context of whole grain foods, a package of millet branded “The Millet” would not be distinctive, but a cell phone named “The Millet,” would be distinctive, and this is the basis for Xiaomi’s marks in China.

The above examples demonstrate how Chinese trademark law is actually extremely inflexible and allows the registration of a mark as long as it enables consumers to accurately identify the source of the goods or services. The Xiaomi trademark highlights the importance of choosing culturally appropriate trademark names. In English-speaking countries, a cell phone named “The Millet” would be just as absurd as a cell phone named “The Spicy Chicken Sandwich.” Xiaomi tried to avoid this by using Romanized names, which many consumers don’t know how to pronounce. Learning from this mistake, car company “Xiaopeng” chose the brand name “X-Peng.” Failure to get expert help will likely cost Xiaomi millions in brand equity. Nevertheless, the Xiaomi brand is very popular in China, where it was branded well. This illustrates the principles that using generic words in the name is not a barrier to registration under Chinese trademark law, provided that the applicant can produce a recognizable product.

Goods Classification

In Chinese business practice and trademark laws, a goods classification system has been set up for production, distribution, and consumption purposes. Goods are classified according to their properties and are tagged accordingly, allowing all merchandise to be systematically distinguished.

China has classified a wide variety of goods, with over 250,000 kinds currently recognized! An evidence-based system is used to classify goods to facilitate consumer transactions and efficient supply chain logistics.

Trademark Application

In Chinese trademark law, a trademark application is the process by which a natural person or business entity obtains exclusive rights to a trademark. The National Trademark Office will issue a trademark certificate after completing both the pre-examination review and substantive examination of the trademark application, during which the trademark will be categorized as a text mark, graphic mark, sound mark, or three-dimensional mark.

Domestic applicants can submit their trademark application in one of two ways: they can appear personally at the trademark office or through a government-certified trademark agent. These two methods only differ slightly in their procedures. Individuals applying in person must visit the trademark office and speak directly with an official. If a trademark agent is used, the agent will represent the applicant at the trademark office in lieu of a personal appearance. In addition to ordinary trademark application documents, the applicant is required to have and present a Chinese national identification card. If a trademark agent files the application, a power of attorney to file the registration on behalf of the applicant is necessary. Chinese nationals may go directly to the trademark office building and submit trademark materials at the counter service.

Foreign persons or foreign-owned business entities must engage a trademark agent to register a trademark. However, this limitation does not apply to foreign persons or business entities domiciled in China.

Trademark Drawing

In Chinese trademark law, a trademark drawing refers to any medium carrying a depiction of the trademark on paper or in a digital format. It is a common item submitted to the trademark office in a trademark application, and care must be taken in the production of the trademark drawing because it is essential to the trademark. Drawing quality can also affect the examination procedure and how the trademark is used; therefore, the details on the drawing are of high importance.

The drawing should be printed and measure between 5 x 5 CM and 10 x 10 CM, leaving some room between the image and the borders. Paper drawings of color marks should clearly show the contrast between the colors used, which can be substituted by a written explanation if not possible.

Drawings in digital documents should be in JPEG format and under 200KB, with dimensions between 400 x 400 and 1500 x 1500 pixels. Scanned trademark drawings must use 24-bit color and feature the same color shades as the original, with a resolution of 300 dpi; otherwise, the registered trademark may be impacted.

Trademark Examination

The trademark examination process under Chinese trademark law involves several steps: checking to see if the application was filled properly, searching the database, comparing the application to other marks, carrying out investigations, and finally determining whether to grant initial approval or issue a rejection. Trademark applications in China currently take over nine months to receive an examination.

The substantive phase of an examination assesses whether the trademark is eligible for registration. Eligibility for the initial grant of registration in the Trademark Gazette is determined through the substantive examination.

The examination process involves determining whether the mark is prohibited or offensive, contains the required elements, and is distinctive. Next, the examiner determines whether there is a likelihood of confusion with other marks or conflict with priority rights holders, as well as whether there are existing trademarks with recently lapsed registrations (within the past year).

Trademark Fees

China’s trademark laws require fees to be paid to the trademark office for any trademark examination, trial, or appeal services it provides. These trademark fees are remitted in full by the trademark office to the central government treasury.

Trademark agents are required by law to pay trademark fees to the trademark office after the initial filing is completed, and they have the option to prepay the required fees for the selected trademark process. The trademark agent making an application to the trademark office must pay the fees using their organization’s name, not under the name of a statutory representative, manager, or staff member. The trademark office payments system will credit the payment within four business days. Once the application appears in the online trademark system, the payment method will be locked. Only bank transfers are accepted at the trademark office.

There is no minimum amount for payments made by a trademark agent. They must pay these amounts in full and on time, otherwise, applications with insufficient payments will be rejected.

Trademark Registration

China’s trademark laws define trademark registration as the legal process for obtaining exclusive rights to use a trademark. Trademark registration is available to individuals, legal entities, and organizations. Trademarks that receive approval are designated as registered trademarks, and their exclusive rights receive legal protection. The exclusive rights to a trademark are limited to the approved classified goods and services. Trademarks, service marks, collective marks, and certification marks can all be registered in China. Current law requires registering a trademark before selling goods in the market.

Only registered trademarks will have exclusive rights to the trademark and therefore protection. China has adopted a policy of strongly encouraging registration, based on the analysis that it would be in the country’s best interest. However, the ease of registration in recent years has garnered controversy over trademark squatting.

Trademark Registration Application Form

In Chinese trademark law, the trademark application form may be used by any lawfully registered business dealing in goods or services in China to register a trademark with the trademark office.

Associated Fees

The trademark fee standards have garnered significant controversy in recent years, with critics arguing that the excessively low registration fees encourage trademark squatting.

Trademark application forms accepted for processing are subject to a ¥1,000 CNY fee, which includes 10 classified goods and services. Each additional classified good or service requires an additional ¥100 CNY. Collective trademark application forms accepted for processing require a ¥1,500 CNY application fee, and the fee for certification mark registration is ¥1,500 CNY.

Trademark Registration Certificate

The Certificate of Trademark Registration is a document issued by the China Trademark Office under the Trademark Act. This certificate is used to prove that the owner has the exclusive right to use the trademark within the specified scope. The trademark registration certificate includes the following items: an image of the trademark, the registration number, the registrant’s name and address, the approved goods and services category, and the effective term of the exclusive rights. Individual applicants can pick up a copy from the trademark office’s public service center, while trademark agents will receive the certificate by mail.

A major fraud risk associated with China’s approach to the trademark registration certificate is attempting to rely on it as proof of ownership for use in a transaction or joint venture. In practice, the trademark office is required by the Trademark Act to record all matters related to trademarks registration in the Trademarks Gazette. Due diligence should be conducted by searching the trademark office Gazette for the status of the trademark registration. The trademark rights law enforcement office will also determine the true legal status of the implicated trademark, and will not make decisions based solely on a trademark registration certificate.

The trademark office has stated on numerous occasions that, while falsification and alteration of trademark registration certificates are currently major issues in China,  the enforcement division will vigorously prosecute all reported cases and seek criminal penalties. The fraud risk is something businesses should control with due diligence. During the due diligence process, businesses should treat the trademark registration certificate with skepticism and rely only on the official Gazette.

Trademark Representation

In Chinese trademark law, trademark representation involves appointing a trademark agent to take legal action on trademark matters on behalf of a principal. While Chinese businesses are allowed to register their own marks, trademark representation is mandatory for foreign businesses to register a trademark.

Purpose

Trademarks do not automatically arise in China; rather a legally prescribed application process must be followed to obtain rights. The role of trademark representation is to assist in following these procedures to ensure that these rights are obtained. The legal procedures for obtaining a trademark are extremely complex, therefore, a trademark agent will be familiar with the numerous procedures required for registration. Additionally, a significant portion of trademark representation does not constitute legal services, rather is an independent professional field. Trademark agents are thoroughly familiar with goods and services classification and the trademark examination process.

The basic Nice Agreement classification has 42 major categories covering tens of thousands of goods, and China has its own classification system with 485 classes. This complex and ever-changing system requires specialized knowledge and significant on-the-job experience for professionals to distinguish between classifications. Businesses tend to lack trademark specialists and thus often need outside assistance. A government-administered qualification exam for trademark representation competence is required to demonstrate sufficient legal expertise in trademarks to provide high-quality service to businesses. Trademark representation is an essential link between trademark offices and businesses, assisting with trademark registration, maintaining exclusive rights, and improving the efficiency of the entire trademark administrative system.