Protecting consumer interests in trademark examinations

29 October 2024

In the examination and trial of trademarks, consumers as the key participants in commercial activities are increasingly being emphasized by Chinese authorities, making consumer interests one of the increasingly important considerations in trademark registration. Haiyang Sun and Nina Li explain.

Trademarks are signs used to identify and distinguish the sources of goods and services. Traditionally, trademark registration practices have often focused more on the interests of the prior trademark owners, later trademark applicants and other directly interested parties, while the role of consumers – the entities identifying the sources of goods in the market – has received comparatively less attention. In recent years, the Trademark Office of the China National Intellectual Property Administration (CNIPA) and the courts have paid greater attention to consumers in the trial of trademark rights granting and verification cases. This has led to a tightening trend in trademark examination standards, particularly in the following three aspects:

Examination of coexistence agreements

A coexistence agreement is an expression of intention by the owner of a cited mark to agree with the coexistence of its similar trademark in a dispute concerning identical or similar goods. However, both the CNIPA and the courts have changed their views on coexistence agreements.

There was once a time when the CNIPA and the courts held that trademark rights are a type of civil property rights. According to the principle of autonomy of will, unless it involves significant public interest, trademark owners of the cited marks may dispose of their rights at their own discretion. Coexistence agreements are declarations made by prior trademark owners who have a direct interest in the matter to the coexistence of similar marks on the same or similar goods. Such agreements reflect the prior trademark owners’ disposition of their rights. Thus, the CNIPA and the courts, adhering to the view that the judgments of prior trademark owners regarding potential confusion are more in line with the actual market reality, accepted coexistence agreements that comply with their standards. The following trademarks serve as examples:

Table 1.

The aforementioned trademarks and their cited marks have constituted similar trademarks, especially in the first group the trademarks

where the letter compositions are identical. In terms of the above groups of trademarks themselves, they are sufficient to cause confusion and misidentification among consumers. However, respecting the trademark owners’ right to dispose of their trademarks, the CNIPA and the courts approved the registration for the later trademarks after the applicants submitted corresponding coexistence agreements.

However, in recent years, the acceptance rate for coexistence agreements concerning similar trademarks has significantly decreased. Both the CNIPA and the courts hold that although the owner of a cited mark has issued a coexistence agreement allowing the registration and use of the applied trademark, the legislative purpose of Article 30 of China’s Trademark Law, beyond protecting the interests of the owners of prior registered or preliminarily approved trademarks to avoid conflicts, also aims to protect the interests of general consumers by preventing identical or highly similar marks from appearing in the market, which could lead to confusion and misidentification among consumers. Therefore, in recent practice, submitting a trademark coexistence agreement can no longer serve as a natural basis for the approval of a trademark. The following trademarks serve as examples:

Table 2.

Of course, the CNIPA and the courts do not adopt a non-adoption attitude towards all coexistence agreements. However, the coexistence agreements accepted are mostly based on the determination that the applied trademarks and the cited prior trademarks do not constitute similar trademarks on similar goods, such as the following two pairs of trademarks:

The Chinese characters 引力子 can be translated as GRAVITON, but GRAVITON isn’t a common English word for Chinese consumers, so it would be difficult for Chinese consumers to link GRAVITON to 引力子, and their coexistence is less likely to lead to misidentification among Chinese consumers. The trademarks

are distinguishable in their word parts and overall appearances. The relevant judgments on these trademarks explicitly state that there are certain differences between the applied trademark and the prior trademark.

It is evident that whether a coexistence agreement is accepted primarily depends on whether the applied trademark and the cited prior trademark have certain differences and whether they constitute similar trademarks on similar goods which will cause confusion among consumers. Compared to the past, the CNIPA and courts now balance the function and value of maintaining social public order and public interest in the examination of coexistence agreements, placing more emphasis on protecting the interests of relevant consumers, thus reducing the likelihood of economic loss of consumers due to confusion caused by the coexistence of similar trademarks.

Examination of distinctive characteristics

From the perspective of distinctive characteristics, whether a sign can be registered as a trademark depends on its ability to serve as a trademark to distinguish the sources of goods and services. The examination standards on distinctive characteristics of trademarks held by the CNIPA and the courts tend to be more stringent.

Comparing the Trademark Examination and Adjudication Standards published by the CNIPA in 2016 with the China Trademark Examination Guideline published by the CNIPA in 2021, it is evident that the content regarding the examination of distinctive characteristics of trademarks has significantly changed, such as the addition of the article stating, “if a trademark consists of an independent word part and other independent element, and the word part lacks distinctiveness, then the trademark as a whole should be considered lacking distinctiveness.”

We take the signs

as examples to analyze the above.

No. 57927497

The sign PINGHENGDIAO, No. 57927497, was applied for by the Zibo Boshan Gear Factory on July 23, 2021, in respect of the goods “hoists, etc.,” in Class 7. However, the Chinese characters 平衡吊 mean “balance crane”, a type of material handling equipment. It is less likely for the relevant public to recognize the said sign as a trademark on the designated goods. Thus, the CNIPA refused the registration application because it lacks the necessary distinctiveness as a trademark.

No. 64433034

Similarly, the sign ZHICHANQUANLU, No. 64433034, was applied for by Beijing Iprlu Science and Technology Service Co., Ltd. on May 6, 2022, in respect of services “intellectual property agency services; intellectual property consultancy, etc.” in Class 45. The Chinese characters 知产权录 in the said sign mean “intellectual property record”. The CNIPA rejected the application on the grounds that the sign merely has direct reference to the content characteristic of the designated services.

Both of the aforementioned signs consist of strongly distinctive device and an independent word part that lacks distinctiveness. However, considering that consumers recognize and remember word part far more than device part, such signs are overall deemed as lacking distinctiveness.

According to the above examples, it seems that the word part of a combined trademark plays a more crucial role, but not all combined trademarks containing distinctive word part can be determined as overall distinctive.

No. 43038874

For instance, the trademark No. 43038874, was applied for by Kinmen Kaoliang Liquor Inc. on December 13, 2019, in respect of goods “sorghum liquor; spirits [beverages], etc.” in Class 33. The trademark was refused for registration on the grounds that the trademark lacks distinctiveness. The applicant argued that: (a) the trademark was composed of three-dimensional element and the traditional two-dimensional elements, i.e., the Chinese characters 金門酒廠 (which refers to the applicant), 金門高粱酒 (which means “Kinmen sorghum liquor”) and devices (the Chinese characters can be clearly seen in the enlarged pictures);

and (b) the Chinese characters had previously been determined to be well-known, enhancing the overall distinctiveness of the said trademark. However, the overall appearance of the trademark is common in style, belonging to the common three-dimensional packaging or container for the product. The primary function of a product’s packaging and container is to protect, contain and facilitate the storage, transportation and sale of the product. Generally, consumers would have difficulty identifying the three-dimensional shape of a product’s packaging or container as a trademark indicating the source of the goods, hindering consumers’ ability to distinguish the source of goods or services. Although the sign does contain the distinctive Chinese characters and the devices, their apparent proportions are too small. Based on consumer recognition abilities, these distinctive elements are likely to be perceived as packaging decorations. The sign still lacks distinctiveness as a whole. Consequently, the court ultimately rejected the request of Kinmen Kaoliang Liquor Inc.

Additionally, even registered trademarks are not free from challenges.

Although the aforementioned trademark has been registered, from the perspective of consumer understanding, the court held that consumers would find it difficult to distinguish the source of the goods through this trademark, thereby increasing the cost of identification for consumers, thus the court declared the trademark null and void.

From the above cases, it can be observed that, compared to the past, the CNIPA and the courts increasingly focus on protection of consumer interests when determining whether a sign is distinctive.

Examination of deceptiveness

“Deceptiveness” refers to a sign that makes representation about the quality or other characteristics of the designated goods exceed inherent levels, likely causing consumers to misunderstand the quality characteristics of the goods or the place of origin. According to Article 10.1.7 of China’s Trademark Law, such signs shall not be used or registered as trademarks. In recent years, the CNIPA has increased the proportion of rejections citing “deceptiveness” under the article.

No. 26833890

The trademark No. 26833890, was applied for by a Chinese individual, Chao Geng, on October 12, 2017, and was successfully registered on May 7, 2020, in respect of the goods “baijiu [Chinese distilled alcoholic beverage], etc.” in Class 33. In 2021, one of the most famous spirit producers, Sichuan Yibin Wuliangye Group Co., Ltd., filed an invalidation request against the said trademark claiming that the trademark lacks distinctiveness. The CNIPA considered that in ancient times, 馫 was an variant of 馨, which means fragrant, and 陈 is usually used to describe aged liquor, thus the trademark directly indicates characteristics such as quality. Then, the CNIPA decided to declare the said trademark null and void.

Geng, the trademark registrant appealed to the courts. The court in the first instance agreed with the CNIPA’s determination. The court in the second instance further considered consumers’ possible subjective judgments, noting that 馫 is not a common Chinese character and that ordinary consumers may easily read or interpret it as the common Chinese character 香 with the meaning of “fragrant”, thus further identifying the trademark as 陈香. 陈香 is an inherent and commonly used word to describe the storage time, aroma, and quality of spirit products, especially Chinese baijiu. Consequently, the second-instance court ultimately rejected the registrant’s litigation request.

From the above cases, it can be observed that, compared to the past, the CNIPA and the courts increasingly focus on protection of consumer interests when determining whether a sign is distinctive.

Examination of deceptiveness

No. 55834268

The trademark No. 55834268, was applied for by Senhong Biotechnology Co., Ltd on May 7, 2021, on goods in Class 29. The word “nature” is a common English word for Chinese consumers, so Chinese consumers may easily recognize it from the trademark. Therefore, the trademark used in respect of its designated goods is likely to mislead the public in terms of characteristics of the ingredients, raw materials and quality of the goods. Consequently, the CNIPA and the courts in both the first instance and second instance refused its registration.

No. 14906057

The trademark No. 14906057, was applied for by the Nantong Wulianghong Agricultural Products Professional Cooperative on June 24, 2014, and was approved for registration on September 14, 2015, on goods i.e., “rice; tea; confectionery; honey; flour preparations; cereal-based snack food; traditional Chinese rice-pudding; cereal preparations; dry vermicelli; condiments” in Class 30.

In 2018, the Shanghai Chongming Green Food Industry Association filed an invalidation request against this trademark based on the grounds that the trademark is similar to their prior registered trademarks and the applied trademark contains 崇明岛 (Chongming Island in English), a geographical name as an administrative division at the county level. However, since goods designated by the two parties’ trademarks are dissimilar, and 崇明岛 (Chongming Island) is not the name of an administrative division at or above the county level, the trademark was upheld. In 2020, the Shanghai Chongming Tourism Investment Development Co., Ltd. also filed an invalidation request against the said trademark, claiming it is similar to the geographical indication 崇明大米 (Chongming rice), which may mislead the public about the quality, place of production or other characteristics of the goods.

Most of Chongming Island belongs to Chongming District in Shanghai, and a small portion belongs to Nantong City, Jiangsu Province. However, the public generally considers the entire Chongming Island as belonging to the Chongming District of Shanghai, even though this is not the case. Only rice grown in Chongming District can use the geographical indication 崇明大米 (Chongming rice). Therefore, if the applicant uses this trademark on rice, the public may easily mistakenly believe that the rice comes from a certain area limited by the geographical indication 崇明大米and further misidentifies that the rice has special qualities that comply with the geographical indication 崇明大米. However, the registrant Nantong Wulianghong Agricultural Products Professional Cooperative is in fact from Nantong City, Jiangsu Province, not Chongming District in Shanghai, so the rice provided by the registrant does not have the special quality. Consequently, the CNIPA and the courts in both the first and second instances held that the registration of the said trademark shall be declared null and void in respect of the goods rice.

When determining whether an applied trademark belongs to signs prohibited from being used and registered as trademarks, the CNIPA and courts assess from the perspective of the general cognition and common understanding of the public, meaning of the trademark and its designated goods, etc. In recent years, increasing attention has been paid to consumers’ understanding about a trademark by the CNIPA and the courts. Thus, relevant examination standards have been tightened. This shift can be illustrated from cases such as:

applied earlier were approved for registration while the trademark

applied later was refused;

No. 14906057

(b) trademark No. 14906057, applied on rice was approved for registration according to the examination standard at that time, but was deemed deceptive during an later invalidation process.

Additionally, it is worth noting that some applicants have attempted to strive for registration by waiving exclusive rights to certain parts of the trademarks, but none has been successful.

For example, the abovementioned trademark No. 57927497, was refused due to lack of distinctiveness, and the applicant declared a waiver of the exclusive right to the word part.

In the case of the trademark No. 57065829 for ,

which was refused due to deception, the applicant also declared a waiver of the exclusive right to the part 钧窑. 钧窑, namely Jun Kiln in English, is one of the famous porcelain kilns from the Song Dynasty. The use of trademark on porcelain wares and other items is likely to mislead the public into believing that the products use Jun Kiln craftsmanship, resulting in misunderstanding about the quality or other characteristics of the product.

No. 57927497

However, considering that the relevant public would not know whether the applicants have waived their exclusive rights to certain components of the trademarks when it is used, they are still likely to recognize the trademarks as a whole and identify the parts that the applicants have waived their exclusive rights. Because of the above, the relevant applicants have failed to obtain trademark registrations by waiving part of the exclusive rights.

From the above cases, it can be seen that in the examination and trial of trademarks, consumers as the key participants in commercial activities are increasingly being emphasized by relevant authorities, making consumer interests one of the increasingly important considerations in trademark registration. This examination trend has resulted in a tightening of relevant standards compared to the past, which deserves the attention of trademark applicants and trademark practitioners.

About the author

Haiyang Sun

Haiyang Sun is a trademark attorney at IP March. She started her IP career in 2016. Her practice covers trademark prosecution and contentious matters, trademark strategy, copyright, domain names and customs protection. She has assisted many prestigious clients in a wide range of industries, including sports, fashion, luxury goods, food, pharma, mining, celebrities, etc.

Nina Li

Nina Li is a partner and trademark attorney at IP March. Her practice covers a wide range of areas, including trademark, copyright, domain name, and customs protection. She has been engaged in numerous prosecution and contentious matters before various Chinese IP authorities, such as IP offices, administrative authorities and courts. Over a decade of assisting domestic and foreign clients to pursue their best interests, she has been recognized to be able to tackle tricky issues and provide responsive, creative and value-added services. Rather than providing commoditized services and robotic advice, she always takes a pro-active approach and renders comprehensive opinions and ingenious solutions. Li has acted for a variety of clients, from celebrities to well-known multinational companies. She is very familiar with Chinese and foreign trademark laws and trademark practices and has extensive practical experience.

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Tags: China Trademark. Consumer Protection Trademark Rights CNIPA Trends Trademark Standard

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