Whenever clients ask about filing a trademark in China via the Madrid System, our answer is simple: filing a national application directly with the Chinese Trademark Office (CTMO) is better.
China’s trademark system is complicated and overseen by oftentimes capricious examiners, especially as compared to the one-size-fits-all Madrid application that makes registering a trademark in China seem so easy. All you have to do with a China trademark filing via the Madrid System is check the box marked “China.” This lulls Madrid applicants into a sense of complacency, but all too often the result is a rejection that could have been avoided with a national application in China.
Madrid applications are supposed to be cheap and quick, but fixing Madrid problems after the fact is neither. This “Madrid problem” is exacerbated by U.S. lawyers comfortable filing in Madrid but with no experience filing in China.
Trademark prosecution in China is highly mechanical. For the vast majority of applications, you file an application and then wait 18 months for your trademark to be registered or rejected. (A slight oversimplification, but not by much.) China has no CTMO equivalent to a USPTO office action, no back-and-forth with trademark examiners, and no chance to amend an already filed application.
For this reason, the meaningful work for Chinese trademark applications occurs before you file the application…
When filing a China trademark application, it is essential to conduct a pre-application trademark screening to assess the trademark’s registrability. Is the mark inherently distinctive? Does it run afoul of China’s statutory prohibitions on trademarks? Does it conflict with any preexisting trademarks?
If the screening results do not dissuade you, you next should determine the class or classes in which you will be filing, and the specific products or services (“items”) to be covered by the mark. This is actually quite complicated because China’s Trademark Office divides each Nice class into its own unique system of subclasses. For purposes of trademark registration, the CTMO treats each subclass discretely: a trademark for one item in a given subclass covers all items in that subclass, but is not effective on items in any other subclass.
To see how this works, let’s look at Nice Class 41, for which the official heading is “Education; providing of training; entertainment; sporting and cultural activities.” The CTMO divides Class 41 into seven different subclasses:
- Subclass 4101 – education;
- Subclass 4102 – organizing educational, cultural, and recreational activities;
- Subclass 4103 – library services;
- Subclass 4104 – publishing services;
- Subclass 4105 – sports and entertainment services;
- Subclass 4106 – animal training; and
- Subclass 4107 – otherwise uncategorized services.
Because Class 41 has seven subclasses, that means that seven identical trademarks, each held by a different entity, could theoretically coexist in Class 41. By way of an example as to how this can work, a search of the trademarks in Class 41 for “MGM” shows four different entities have filed applications:
(1) Marilyn Licensing Corp. registered “MGM” in subclass 4107;
(2) A Chinese company, Great Wall International Communication Co. Ltd, registered “MGM” in subclasses 4102 and 4104;
(3) Metro-Goldwyn Mayer Lion Corp. registered “MGM” in subclasses 4101 and 4105, and (needlessly) again in subclass 4105; and
(4) MGM Resorts International has attempted to register “MGM” in all seven subclasses, but will probably be rejected in all but subclasses 4103 and 4106 because of the conflicting prior registrations.
When you file a China national application, you determine the subclasses you want your application to cover. But when you file a Madrid application, your list of items goes straight to a CTMO trademark examiner, who then decides from your list which subclasses the items should go in without consulting you. This lack of consultation, combined with the examiners’ often tenuous grasp of English (and other foreign languages), means that imprecise descriptions of items can (and often do) lead to problems of both overinclusiveness and underinclusiveness.
MGM Resorts International’s application was overinclusive because it attempted to cover all of the services in the class when most of the subclasses were already taken. But it could have been worse: it could have been a Madrid application. Because MGM Resorts filed a national application, it will likely be rejected only for services in subclass 4101, 4102, 4104, 4105, and 4107. If MGM Resorts International had filed a Madrid application with an overly broad description of services, the CTMO examiner probably would decide that the services covered all subclasses and then reject the entire application.
Surprisingly, attempting to cover all items in a class can also result in underinclusiveness. We see this most often with a description of items that mirrors the official Nice class headings — because the official Nice class heading usually only covers some of the subclasses for that class. For instance, the official Nice heading for Class 25 products is “clothing, hats, and shoes.” This leads many to believe that filing a Madrid application with that description of products covers them for all products in Class 25 even though it does not protect for socks, scarves, gloves, or belts. According to the Chinese subclass system, none of those are considered “clothing.” This sort of mistake is commonly made by trademark lawyers not familiar with China’s trademark system.
Apple Computer encountered an “underinclusive” problem by registering a Class 9 trademark for “IPHONE” in 2002 as covering computer hardware and computer software. Unfortunately for Apple, cellphones were in a different subclass, and in 2004 a Chinese company, Hanwang Technology, registered “I-PHONE” to cover cellphones. Apple had to pay Hanwang to gain ownership of the trademark.
Though it is possible to conduct a pre-application screening before filing a Madrid application and to craft a description of items in a Madrid application that conforms to the Chinese subclass system, doing so requires working with an experienced China trademark attorney or agent and it will cost nearly as much and take nearly as much time as a national application. In other words, you lose all of the advantages of the Madrid System, but keep all of the disadvantages.
Finally, even if your Madrid System trademark is registered in China without a hitch, you may still have trouble enforcing your rights. Upon registration, the only formal certificate for Madrid System trademarks is the one issued by WIPO. China does not issue its own separate trademark certificate. In theory, this should not be a problem, because the WIPO certificate should be sufficient to enforce your trademark rights under Chinese law. In practice, however, Chinese bureaucrats and e-commerce customer service representatives often demand a copy of a CTMO-issued Chinese trademark certificate before they will lift a finger against an infringing factory or website. Though it is relatively easy to secure a Chinese trademark certificate based on a WIPO registration, that usually takes three to five months, which is a lot of time when your (or your client’s) trademark is being knocked off.
The CTMO is fickle enough with national applications. Why make it more difficult by filing a Madrid System application?
The above is based on a previous post written by Matthew Dresden.
Dan Harris is a founding member of Harris Moure, an international law firm with lawyers in Seattle, Chicago, Beijing, and Qingdao. He is also a co-editor of the China Law Blog. You can reach him by email at firstname.lastname@example.org.