Limitation of goods or services for trademark registration in China

In trademark prosecution practice, it is not unusual that the applicant/registrant limits or even abandons certain goods or services related to a trademark in order to obtain registration or avoid creating confusion. Jurisdictions like the United States and European Union allow this, provided that the alteration does not broaden the scope of protection of the trademark. Things are less straightforward against the backdrop of the current examination practice in China.

There are two routes to obtaining a Chinese trademark registration: filing a national application with the China National Intellectual Property Administration (CNIPA) or filing for international registration (IR) through the Madrid Protocol, designating China. The two routes are governed by different sets of rules.

With regards to the examination of goods and services of a national application, the CNIPA primarily relies on the Classification of Similar Goods/Services (Classification Manual), which is the Chinese version of Nice Classification of Goods and Services (Nice Classification). The Classification Manual divides goods/services into subclasses so that those falling in the same subclass would be deemed similar in principle, unless otherwise specified. Alongside the standard items listed in the Classification Manual, the CNIPA also accepts goods/services included in the TM5 ID List and those listed in a quarterly updated database of acceptable goods/services. Despite the CNIPA’s effort to regularly update the acceptable entries, it is still an onerous task to keep the accredited goods/services up to date. For instance, the latest Classification Manual (2022) does not include any virtual goods or services. It is quite recent that the CNIPA has started accepting software platforms, blockchain-based non-fungible tokens (NFT), and the management, issuances and transactions associated with NFTs.

Items outside the aforesaid source are often deemed non-standard. In theory, applicants may file for non-standard goods or services, as long as the expression is clear and specific. Nevertheless, the fact that non-standard goods and services are more prone to be challenged substantiates that the CNIPA is reluctant to accept them, given that clarification of such would arguably prolong the examination process and create backlog.

In the context of the national route, brand owners may only abandon goods/services enumerated in the list of specifications after the first filing. The 2021 version of the Trademark Examination Manual (Examination Manual) reiterates that the specifications that applicants wish to delete shall be the same as those stated in the first application, and the applicants shall not alter or limit the original specifications. Limitation of the specifications even within the original scope is thus impossible. Deleting certain goods/services in the examination process is a common tactic to overcome obstacles where a prior mark is cited. If the trademark has already been registered and is accused of infringement, brand owners may opt to revoke the registration on all or partial goods/services.

In the context of the IR route, the CNIPA employs a set of much more flexible examination criteria. Examiners translating specifications into Chinese and categorising them into corresponding subclasses are more open to non-standard descriptions. In light of the gaps between the Nice Classification and the Classification Manual and the nuances during the translation process, examiners are more willing to exercise discretion in assessing the acceptability of non-standard descriptions, which allows brand owners more leeway in selecting desired goods and services.

Regarding IRs, the CNIPA allows applicants to limit the list of goods and services prior to or after registration. Brand owners may delete or keep specific designations and even rephrase specifications by using positive limitations or exclusions, provided such alterations do not extend the original scope. The Examination Manual also warns that where the new list of goods/services is not aligned with the Chinese classification, it could still be challenged. In practice, if the limitation broadens the original scope, it will be rejected. If the updated specifications are not accepted, the CNIPA will declare that such limitation is invalid in mainland China, and all ensuing examination will be based on the original specifications. If registrants seek to change the goods/services of an IR, they may opt to renunciate trademark rights on all designated goods/services in China or cancel the mark on partial or all goods/services in all designated signatories permanently from the International Register. Although the Examination Manual affirms that partial cancellation allows the registrants to delete some items, rephrase the specification and limit goods/services in the examination procedure, it could run the risk of expanding the original protection, thus leading to non-compliance with the CNIPA rules.

In general, the IR route offers more flexibility and allows brand owners to identify specifications in a more nuanced approach. It would be conducive to limiting goods and services meant for genuine commercial use and to alleviate the registrants’ burden of proof in adducing use evidence in future non-use cancellation proceedings.

The IR route could lose its edge in the following circumstances.

Where clarification fails to remove the obstacle

Since the CNIPA relies heavily on the Classification Manual and the subclass regime, where limitations by way of clarifying the specifications fails to remove the obstacles and the new goods or services still fall under the same subclass, the applicants could only abandon all goods or services in the subclass(es) identical to those of the cited mark. Abandonment is available to both national and international routes.

Where rephrasing may extend the original scope – the example of retail services

Unlike most jurisdictions that allow trademark registrations on retail services, the CNIPA limits wholesale and retail services to medicine, veterinary medicine, sanitary preparations and medical supplies in Subclass 3509 and rejects all other wholesale and retail services. In practice, “sales promotion for others” (Subclass 3503) or “presentation of goods on communication media, for retail purposes” (Subclass 3502) are often used, out of expediency, by brand owners as the closest equivalent of wholesale and retail services. However, such alteration will be rejected by the CNIPA on the ground that it expands the original protection. The rationale behind the rejection is that “promotion” has a broader ambit than “retail”, and “presentation of goods on communication media” is different from “retail services”. Therefore, brand owners could only use the standard descriptions in Subclass 3509 or highly similar specifications for retail services.

Where illegal goods and services are involved

Goods and services that are deemed illegal by the Chinese authority are unacceptable in trademark registration. In general, the pornography, gambling and marijuana industries are illegal in China, and the goods or services associated with them are banned by the CNIPA. It is therefore impossible to register a trademark on these goods/services through either route.

The CNIPA also rejects goods/services related to cryptocurrency and virtual currency. In a recent IR refusal, the CNIPA partially rejected an IR mark on the goods “computer software for managing cryptocurrency and NFT transactions using blockchain technology; downloadable computer programs (software) for virtual currency; downloadable software for virtual currency” (Class 9) and the services “virtual currency trading services; virtual currency brokerage; virtual currency price information providing services; financial transaction services of cryptocurrency through internet platform” (Class 36), while giving a greenlight to items directly related to cryptocurrency trading including “downloadable electronic wallet; software for the exchange of electronic money” (Subclass 0901), software for trading blockchain-based goods including “software for mobile devices for issuing and trading digital certificates for ownership and license of blockchain-based digital content; software for mobile devices for issuance and transaction of blockchain-based NFT” (Subclass 0901), and electronic money paying services including “electronic wallet payment services; digital certificates brokerage for ownership and license of online blockchain-based tangible and intangible goods” (Subclass 3602). But in the Classification Manual, “downloadable electronic wallet” and “electronic wallet payment services” are standard descriptions that could be broadly interpreted to cover virtual currency and cryptocurrency. It remains unclear how the CNIPA draws the boundary between the goods/services related to virtual currency.

Comment

Brand owners are advised to weigh up their business needs and trademark portfolios before making a filing decision. Where standard descriptions are both sufficient and explicit, it would be advisable to file national applications with the CNIPA. Conversely, brand owners are advised to file an IR and designate China, in case of the following:

• brand owners want to secure an early filing date but still hesitate over the specifications; or
• the designated goods/services are non-standard descriptions.

Some brand owners seeking to overcome registration obstacles in China may explore the possibility of reaching an agreement with the applicant/registrant of the prior mark on limiting or excluding the commercial use of a mark in certain areas, rather than making any changes to the specifications. Theoretically, such agreement has no bearing on the CNIPA’s examination outcome.

Brand owners are therefore particularly recommended to file an additional IR application (designating China) with the updated descriptions in case they are obliged to specify the goods/services during the national filing process. Once the IR passes preliminary examination, brand owners may choose to cancel the national trademark so as to secure the registration on the intended items and block similar marks filed after the national filing.