In recent years, an increasing number of trademark applications have encountered rejections due to being considered “deceptive”. According to Article 10.1.7 of the China Trademark Law, a sign which is deceptive and is liable to mislead the relevant public regarding the quality, origin of goods or other characteristics of the goods shall not be used as a trademark. “Deceptive” referred to in this clause occurs when descriptive elements such as the type, composition, or ingredients of the goods contained in a trademark are inconsistent with its designated goods, potentially leading to public deception. On the other hand, whenever a mark contains descriptive elements relating to the ingredients or characteristics of the goods, the trademark may also be considered as lacking in distinctiveness. Therefore, it often happens that a mark applied for is considered both deceptive and lacking in distinctiveness.

In the Guidelines for Prohibiting the Use of Signs as Trademarks issued by the National Intellectual Property Administration (CNIPA) in January 2023, it is emphasized that if a sign has multiple meanings or can be used in different ways, as long as one of its meanings or ways of use is likely to make the public believe that it falls under the circumstances specified in Article 10.1 of the China Trademark Law, or if a specific group of public has reasonable grounds to believe that the use of the sign as a trademark violates the provisions of this article, then the sign falls under the aforementioned circumstances of violation.

With examination standards becoming stricter, the number of trademark applications encountering rejections due to being considered as deceptive has been increasing. Theoretically, the criteria to determine the registrability of marks composed of Chinese characters or foreign languages, in terms of deceptiveness and distinctiveness, should be the same, only that meanings of the marks in foreign languages might not be properly understood or commonly known by the relevant public, i.e., in most cases, the Chinese public. For the Chinese public, whether the elements in one mark composed of Chinese characters are deceptive is kind of self-explanatory, but for marks composed of a foreign language, the situation is bit trickier. To better understand situations when marks composed of foreign languages being deemed as both deceptive and lacking in distinctiveness, we have made studies of cases, and tried to explore strategies for overcoming rejections by citing both deceptiveness and distinctiveness clauses for marks composed of foreign languages.

Is the element of the relevant public relevant?

To begin with, determining whether a trademark is deceptive or distinctive requires a thorough examination of whether the descriptive elements in this mark are aligning with the function, ingredients or other characteristics of the designated goods of the mark. This understanding is particularly crucial when dealing with foreign trademarks.

Article 8 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Administrative Cases Involving Trademark Authorization and Confirmation stipulates: “When the trademark concerned is composed of a foreign language, the people’s court shall examine and determine whether the trademark in foreign language has distinctive features based on the usual understanding of the relevant public in China.” This rule also applies to the examination of Article 10.1.7, emphasizing the importance of considering the “usual understanding of the relevant public in China” and the “cognitive degree” of the relevant public for the “inherent meaning” of the marks in foreign language.

The trademark Axhidrox, used on the goods like toiletry preparations, deodorant, and antiperspirant was rejected by the CNIPA, which considered this mark as being liable to mislead the relevant public on the characteristics of its designated goods. The case was brought to the Beijing IP Court, which considered that even though according to the recognition habits of the public, the mark Axhidrox is likely recognized as combination of “Ax” and “hidrox”, where Ax is usually understood as “reduction” and hidrox refers to an extract of olive fruit pulp with antioxidant effects. Hidrox is not a common English word, and with the general understanding of English language among the Chinese public, they usually would not comprehend its specific meaning. Consequently, the trademark Axhidrox, designated for use on personal deodorants and other goods, would not be perceived as inconsistent with the characteristics, functions or other features of the designated goods. Based on the above, the Beijing IP Court ruled that the mark is not liable to mislead the relevant public on the characteristics or function of the reviewed goods and is not deceptive. The CNIPA appealed to the Beijing High People’s Court, which sustained the judgment of the first instance and further stressed that when judging whether a mark is deceptive, the usual understanding of the relevant public and the designated goods or services of the mark shall all be taken into consideration.

It can be seen that the court, in its examination, fully considered the possibility of deception starting from the “usual understanding of the relevant public in China”. And hence the “usual understanding” or “general cognition” of the relevant public is one of the key aspects of analysis.

In the retrial of review of refusal of the trademark BIODERMA, used on the goods “pharmaceutical preparations for skin care; pharmaceutical preparations; [and] pharmaceutical preparations for skin disease” in Class 3, the Supreme People’s Court ruled that to determine whether an English trademark is distinctive, the standard should be based on the usual understanding of the relevant Chinese public for the goods or services designated by the mark. The assessment should be made based on the overall composition and meaning of the mark, considering the degree of association between the mark itself and the designated goods or services, as well as its ability to distinguish the origin of the goods or services in actual use. The mark BIODERMA was refused by the CNIPA, whose decision was sustained by courts of two instances, based upon the grounds that the mark was understood as composing two parts, i.e. BIO and DERMA, wherein “BIO” was understood as biology and “DERMA” was a commonly used root word in English and was translated as “dermis layer of the skin”. The SPC reversed the decisions of CNIPA and the lower courts, deciding that the mark BIODERMA is a coined word and is not likely be understood as abovementioned by the relevant public in China.

Aside from the “usual understanding of the relevant public”, determining the possibility of deceptive or distinctiveness also requires judgment based on the common sense of the relevant public. The Guidelines for the Trial of Administrative Cases Involving Trademark Authorization and Confirmation by the Beijing Higher People’s Court issued in 2019 stated that “if the public, based on daily life experience, would not misperceive the quality or origin of the goods or services covered by the concerned trademark, it does not fall under the circumstances specified in Article 10.1.7 of the China Trademark Law.”

The CNIPA released the Standard for Judging General Trademark Violations (the Standard) on December 13, 2021. Article 8 of the Standard stipulates that the representation of a trademark about the quality and other characteristics or the origin of a product or service used exceeds its inherent degree or is inconsistent with the facts, which easily misleads the public about the quality and other characteristics or the origin of the product or service. However, exceptions are made for situations where the public, based on everyday experiences, would not mistake the quality or origin of the goods or services. The regulations here stressed that “daily life experience” shall be considered when considering whether a mark is deceptive.

For example, even though “Blackberry” is name of a fruit, when it is used on electronic products, the relevant public can readily judge based on common sense that “Blackberry” is not related to electronic products. Therefore, the mark “Blackberry” is not liable to mislead the relevant public or associate this word with any feature of the goods electronic products, avoiding the possibility of being deemed as deceptive or lacking distinctiveness.

In sum, when determining whether there is a possibility of deceptiveness or lack of distinctiveness in a trademark, the considerations and judgments shall be based on the common experience or usual understanding of the relevant public, focusing on the correlation between the meanings/connotations of the trademark and the designated goods/services, and then further analyzing the possibility of misleading or possible associations between mark and characteristics of goods.

Association with the designated goods and services

Furthermore, determining the possibility of deceptiveness or distinctiveness requires consideration of specific goods and services covered by the mark and the relevant public of such goods and services.

The trademark “HyCOsyn” used on the services like “processing of carbon dioxide; purification of carbon dioxide and etc.” in Class 40 was rejected by the trademark office for being considered as devoid of distinctive character and liable to mislead the public as to the contents of the services other than those relating to “HYCO”. In the review procedure, the grounds were built based on the following aspects: the trademark “HyCOsyn” as a whole is a coined word with no dictionary meaning and cannot refer to any characteristics of its designated services; even if the mark is considered as combination of “HYCO” and “syn”, in the gas industry, “HYCO” is mainly used to refer to hydrogen and/or carbon monoxide, while the main content of the designated services refer to “processing of carbon dioxide; purification of carbon dioxide and etc.”, which has no connection with hydrogen and/or carbon monoxide; in view of the above, “HYCO” does not describe any characteristics of the services and could not mislead the relevant public on characteristics of the services. The Trademark Review and Adjudication Division of the CNIPA acknowledged the arguments. It ruled that the trademark “HyCOsyn” has specific meaning in its entirety and is generally not liable to mislead the relevant public on the contents of the services or is lack of distinctiveness.

In the defense of this case, elements like “usual understanding of the relevant public”, “relevance between the specific services” and the meanings of the mark, the scope of the relevant public of the services are all emphasized in the arguments, which finally persuaded the examiners to consider the term “HyCOsyn” as neither misleading nor lacking distinctiveness when used on its designated services.

Tips for trademark applicants

In practice, there are some tips to apply when a trademark in foreign language is found to be both deceptive and lacking distinctiveness:

• Analyze meanings of connotations of the mark starting from the perspective of the “usual understanding of the relevant public”;
• Elements like “common sense”, “general cognitive level” and “habits of cognition” of the relevant public shall all be taken into consideration;
• The characteristics of the designated goods/services of the mark and the features and scope of the relevant public shall always be considered in combination with the elements listed above.

It is understandable that brand owners usually prefer to adopt descriptive or suggestive elements in their composition of trademarks, as to establish associations between the trademark and the designated goods/services. However, to increase the chance of success in trademark registration, it is necessary to strike a balance between obtaining rapid consumer recognition, smooth trademark registration and subsequent trademark rights protection. And because using trademarks deemed as deceptive constitutes a general trademark violation, brand owners should be cautious when applying for trademarks with descriptive or even suggestive elements. It is advised to seek advice from local counsel to assess if a mark would be deemed deceptive or lacking distinctiveness in China.