Chinese trademark law prohibits trademarks that are “damaging to socialist morality or have a bad influence.” There is actually a great deal of controversy in administrative appeals about what constitutes damage to socialist morality or bad influence. This article will look at the current jurisprudential and trademark office precedents that have interpreted whether a mark is politically incorrect.
The legislative intent behind the rule emphasizes the value placed on public welfare, consumer rights, and business ethics under socialist law. The Trademark Act in itself also was written in the spirit of promoting fair competition and honest business dealings, and these underlying principles inform how §10 applies in practice.
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Political Correctness Strategy
Trademark Law Enshrines China’s National Interests
In recent years, specific rules have been enacted to define what may be considered politically incorrect under Chinese trademark law. The China National Security Act (2015) mandates all citizens protect national security, particularly principles related to sovereignty and preventing secession. The Act extends this duty to protect China’s sovereignty and unity to all Chinese citizens, including those in Hong Kong, Macau, and Taiwan. The courts have issued guidelines making clear that any trademark sign that threatens national security or unity constitutes a prohibited “bad influence.”
A bad influence will be found for any trademark that undermines the Communist Party’s leadership of Chinese society. Therefore, any symbols that resemble those used by Communist Party or related to a person, place, or event of revolutionary significance will be found to have a bad influence.
A trademark examiner must reject any trademark on bad influence grounds if it could make people feel negatively about China’s economy, culture, ethnicities, or society, if it is adverse to the public welfare, or may cause public disorder. Other prohibited trademarks include those with similarities to places given strategic importance by Chinese policy or use words that reference events that negatively impacted the Chinese economy or public welfare or caused public disorder. A variety of patriotic and political symbolism related to China and other countries is covered in detail by the regulation, Examination Guidelines for Trademarks Containing the Terms “China” or “Chinese.”
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In practice, “Socialist morality” actually means ordinary social norms within the local geographic region. Therefore, a China trademark examiner must consider all the facts in context to determine if there is a “bad influence,” and this includes infringement and false advertising. The real-world administrative cases below show that identifiable objective facts are relevant when determining what is immoral or may have a bad influence.
Respect for Fallen Heroes of the Communist Revolution
A very common political correctness based trademark refusal in China involves fallen heroes of the communist revolution. The names of all fallen heroes are protected under Chinese law, and this results in frequent conflicts as to whether a proposed trademark conflicts with a revolutionary name. Due to there being so many fallen heroes, registrants often find they are unlawfully using the name of a fallen hero in their business, even if that name is otherwise a very common word or phrase.
A good example in China involves an examiner’s refusal of a trademark application for the mark Yang Guofu filed by one Zhu Yuwei, with the trial court upholding the examiner’s judgment on appeal. The appeals court found that the name Yang Guofu did indeed belong to a fallen hero and held that it would damage socialist morality and have a bad influence under §10 of the China Trademark Act. As a result, trademark registration was refused.
However, trademark registrations involving the name of a fallen hero are often granted in practice. For example, in an appeal to the Trademark Trial and Appeal Board against a refusal, the trademark Hecheng sought by one Huang Hecheng was allowed to register. The Board reasoned that although Hecheng was indeed the name of a fallen hero, the intended use of the trademark was reasonable because it was based on the registrant’s own name, and therefore would not have a bad influence.
The above cases show that potentially politically incorrect trademarks cannot be straightforwardly rejected simply because they match the name of a protected revolutionary person, place, or event. Rather, the full context of the intended use must be taken into account before an examiner can determine that the trademark would damage socialist morality. In particular, the name of someone managing the business is highly dispositive in overcoming prohibitions on revolutionary names.
Respect for religion and culture is required by China’s trademark rules
Religious elements
The China trademark office will find that a trademark has a bad influence if it contains religious elements deemed considered insufficiently respectful or potentially offensive to religious individuals.
A classic case involving a trademark invalidation based on religious elements is the “Potala” trademark application, which included an image. During the administrative trial, the Board found that consumers would likely associate the name Potala with the famous Buddhist landmark, the Potala Palace. This association was judged to be offensive to religious individuals, and the trademark was thus deemed to violate trademark rules.
Other cases have granted similar protection to religious elements from foreign religions, such as Southeast Asian Buddhism. For example, a COVID testing company named “Watmind” applied for and was refused a trademark of the same name in China, using Roman letters. While not included in the trademark office’s judgment, but nonetheless useful context, the company’s website it was a United States company, while other descriptions describe it as being China-based, an apparent false advertising scheme.
The company appealed the trademark office’s decision in an administrative litigation action with the Beijing court. The trial court found that the “Watmind” name included the word “wat,” which would likely be associated by the consuming public in China with names of Buddhist temples common throughout Southeast Asia, such as the famous Angkor Wat. Thus, the trial court reasoned that the use of this word to promote medical products would have a bad influence. Watmind appealed the trial court’s judgment, which was upheld by the lower appeals court.
The appellate judge reasoned that even though the meaning of “wat” is not widely known in China, it would nonetheless invoke an association with Buddhism among many in the consuming public, thereby creating negativity about religion. How might the watmind case have turned out differently? A dispositive fact was likely the lack of fame associated with the mark; it was a company and brand formed largely to deceive Chinese consumers into thinking they were purchasing high-quality American imports.
The current China Foreign Investment Act (2019) authorizes 100% Chinese-owned companies to receive a “foreign owned entity” designation, and such schemes exploded onto the markets following its enactment. Watmind had no prior existence before this scheme. In contrast, a similar trademark for the John West seafood brand was granted without any opposition, despite the connection with the religious text The Book of John. Given the long timeline necessary for registering a trademark in China, these cases make clear that any kind of religious connotation should be rigorously avoided when registering a trademark in China.
Disrespecting Chinese Culture
Chinese trademark examiners often reject trademark names perceived as disrespectful to Chinese culture, particularly those involving the improper use of Chinese idioms. These idioms, short phrases that derive from ancient Chinese cultural expressions, often involve parables about ancient wisdom passed down through generations over thousands of years.
Consider the trademark trial held in the case of Liuhe Foods v. Huajia Foods. The Board reviewed a disputed trademark symbol containing a nonsense Chinese phrase “Daji Dali,” which also happens to be a homonym of “Daji Dali,” a respected idiom roughly meaning “great fortune.” The Board found that the disputed trademark would have a negative impact on Chinese culture and mislead the public due to its improper reference to the idiom. Following appeals to both the trial court and then the lower appeals court, the appellate judge ultimately upheld the Board’s decision and ruled that the trademark would indeed have a bad influence.
Strategy for politically correct branding
The above cases make clear that the rules about what constitutes damage to socialist morality or a bad influence under Chinese law are fuzzy at best. The Chinese idiom case shows that, despite examination procedures, some potentially scandalous trademarks may still make it to the market and have a bad influence on society.
Different examiners and judges may also reach wildly different conclusions based on the same set of facts. Quite frequently, trademarks similar to an approved trademark are not given the same treatment by examiners, and practitioners have yet to identify any kind of pattern from the reported trademark examinations. Current court guidance instead advises examiners to focus on whether the mark could deceive or mislead the consuming public as to the source of the goods.
When applying for trademarks in China, choosing professional translators over unprofessional workers like freelancers or in-house staff is a must. In addition to having your brand name translated by an expert, ensure that any IP expert opinions on the trademarks are translated into clear English; if it sounds awkward, it is likely misleading.
Trademark practitioners point out that trademark law around political incorrectness is inadequate to understand what may be perceived as damaging to socialist morals or as having a bad influence. Above, we looked at how the Trademark Act’s definition of offensive marks includes sensitive topics such as politics, religion, and revolutionary history. However, there few rules or guidelines describing how specific categories of goods and services can comply with Chinese trademark law, nor are there any published cases with examples.
Inadequate trademark penalties are limited accountability for bad faith trademark filings encourages trademark trolling. Unlike customs brokers in infringement cases, who can be held liable for facilitating trademark law violations, trademark agents are often all too willing to facilitate illegal filings since they lack any kind of accountability. For their part, international businesses can avoid headaches when working with their trademark agents by getting them to help rigorously avoid any trademark applications that may involve politically or socially sensitive subject matter.
LEARN MORE
Learn about the potential legal risks associated with common practices for selecting trademark names in China at our article here. You can also get a general overview of this topic at our China Trademarks FAQ.