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News article1 October 2021Executive Agency for Small and Medium-sized Enterprises

Six common problems caused by China’s trade mark subclass system

Six common problems caused by China’s trademark subclass system

Written by Mr. Jian Xu, IP Expert and collaborator of the China IP SME Helpdesk

 

China introduced the unique subclass system for assessing the similarity of goods/services during trademark examination. While the “check-box” approach is designed for efficiency, it leaves no room for a close case-by-case analysis.

This stands in stark contrast to the process in many other countries, where the similarity of goods/services is typically assessed in a more flexible and detailed fashion allowing applicants to rebut the examiner and provide supporting evidence if needed.

These differences in practice in assessing the similarity of goods/services is the root of much of the frustration experienced by foreign applicants in China.

With a view to helping foreign applicants overcome such frustration, below we explore and address six of the most common queries we routinely receive from clients.

1. Can I cover the whole class by choosing a class heading as a trademark specification?

A foreign applicant might choose a class heading as trademark specification and assume the whole class is therefore covered. This is not true in Chinese practice.

Firstly, class headings (or subclass headings) are often not acceptable and usually have to be amended to reflect specific goods/services within that class.

Secondly, even if a class heading is accepted for trademark specification, only the items specifically itemized in the text heading itself are covered. In other words, in this context the examiner does not treat the heading as a heading per se, but rather effectively accords it the same weight as a subclass.

For example, the applicant might register its XYZ trademark on “clothing, footwear, headgear,” the heading for Class 25, and therefore assume that all 13 subclasses that comprise the class are also covered. In fact, only those subclasses that relate specifically to “clothing, footwear, headgear” are covered — namely subclass 2501-05 (clothing related), 2507 (shoes related) and 2508 (headgear related). It does not cover the other subclasses, such as 2509 (socks related), 2510 (gloves related), 2511 (ties, scarfs, and related items) and 2512 (belts related).

This means that a third party can still register the same XYZ trademark on those uncovered subclasses, because goods in those subclasses are considered dissimilar to “clothing, footwear, headgear” during trademark examination. In other words, the whole class is not covered.

2 Why do international registrations (IRs) extended to China usually have a narrower protection scope?

IRs usually provide insufficient coverage of subclasses under Chinese practice, thus leaving gaps in the scope of protection.

This is because IRs are rarely drafted to take into account the Chinese subclass system. The specification for IRs might provide enough protection for the home country (e.g., the USA or Canada), but not for China because not enough subclasses are covered.

Still taking Class 25 for example, an IR specification might read “Coats, T-Shirts, Suits, Skirts, Trousers, Underpants,” which may be sufficient to protect the brand on various clothing items in other countries. However, under Chinese practice, those items only belong to subclass 2501, and do not cover items in other subclasses, e.g. baby’s clothing (subclass 2502), swimming suits (subclass 2503), raincoats (subclass 2504), etc.

Again, the scope of protection is insufficient in China and there will be gaps of uncovered subclasses, which can potentially leave a brand vulnerable to trademark piracy.

Even if a trademark is not filed in China via IRs, but rather through the normal national application, the same problem can occur for many foreign applicants. This is because the trademark specification is drafted by foreign attorneys who are not aware of or familiar with China’s subclass system, and/or local Chinese counsel is not engaged to specifically advise on the subclass issues.

3 Can I limit or narrow the scope of goods/services to overcome cited marks in the event of trademark refusal?

When a trademark is refused due to cited marks, many foreign applicants would like to narrow the trademark specification so that the narrowed description of the goods/services would seem dissimilar to that of the cited marks. This is an established practice in many countries but unfortunately not viable in China.

Under China’s subclass system, no matter how narrow the revised description of goods/services is, if the trademark remains in the same subclass it is deemed similar to other goods/services in that subclass. For example, the applicant might propose to limit the original goods “nutrition supplements” in subclass 0501 to “nutrition supplements, namely, non-alcoholic beverages containing ingredients to prevent dental disease and cavities,” but the narrowed description still belongs to subclass 0501 and thus remains similar to any items in that subclass.

4 I don’t understand this trademark refusal decision. How can those cited marks, which all look similar, co-exist while my application gets rejected?

Foreign applicants are often puzzled by trademark refusal decisions in China. Quite often, several marks will be cited to refuse an application. Then the applicant fails to understand why those cited marks, which all look similar, can co-exist while their application is rejected.

The subclass system is usually the answer. Those cited marks co-exist because their respective goods/services are categorized in different subclasses; by extension, the trademarks themselves are deemed dissimilar.

It is important that foreign applicants seek local Chinese counsel to explain the refusal decision in terms of subclasses. Specifically, you should ask the local counsel to provide a list of the subclasses covered by your mark, and the subclasses covered by each of the cited marks, in addition to the simple translation of the goods/services of the cited marks.

There is an additional advantage of the subclass approach for reporting trademark refusal decisions, especially if there are quite a few cited marks. For example, the applicant might feel overwhelmed to see that their mark is refused due to as many as six cited marks. How can they overcome so many cited marks in order for their mark to get registered?

However, a closer analysis often reveals that only one or two subclasses are actually key to the applicant, and accordingly there may be only one or two cited marks, out of six cited marks, that actually block those subclasses. Consequently, the applicant may only need to overcome one or two cited marks, not all six cited marks, in order for their mark to be registered in the key subclasses. A more sensible strategy can thus be formulated that focuses on dealing with a smaller number of cited marks, thereby increasing the chances of success and reducing the cost of appeal.

5 How does the subclass system affect non-use cancellation of trademarks?

Subclass is usually considered during a non-use cancellation proceeding before the CTMO. This means that demonstrating the use of one item within a subclass can usually maintain the registration for the whole subclass. For example, your mark is registered in class 30 in the “cakes, sandwiches, puddings” subclass. In a trademark non-use cancellation proceeding, you can only show evidence of use with respect to “cakes,” but not “sandwiches; puddings.” However, showing such evidence can help you maintain the mark on similar goods of “sandwiches; puddings” because they are in the same subclass.

6 How does the subclass system affect trademark infringement cases?

Although the subclass system is strictly adhered to during the trademark examination stage before the CTMO, the Chinese court is willing to assess the similarity of goods/services on a case-by-case basis, and is thus not bound by the subclass system. It is not uncommon in Chinese trademark infringement decisions, for goods/services in different subclasses (e.g. socks and shirts), and sometimes even in different classes (e.g. clothes and eyeglasses), to be deemed similar given the nature of that particular case. Therefore, the subclass system is merely a reference, but not a key factor in trademark infringement proceedings before the court for assessing the similarity of goods/services.

 

This article was originally published HERE 

Dr Jian Xu is the managing director of Gowling WLG’s Beijing office, and heads up the firm’s Chinese intellectual property practice. He is a dual qualified Chinese lawyer and patent and trademark attorney practising since 2006. He is the author of the book “Chinese Intellectual Property – A Practitioner’s Guide“, published by China IP Publishing House in 2013. 

Details

Publication date
1 October 2021
Author
Executive Agency for Small and Medium-sized Enterprises