China Adopts the Tenth Nice Classification System for Registering Trade Marks - and Creates Possible Headaches for the Life Sciences Sector

09-Jan-2013

While there are similarities between trade mark registration processes in China and Australia, there are also numerous differences.  It is typically necessary to adopt different trade mark protection strategies in China compared to Australia.

First and foremost, China is a ‘first to file’ Country meaning that trade mark rights accrue from the date on which an application to register a trade mark is first filed.  Individuals or companies intending to conduct business in China are therefore encouraged to file applications to register their trade marks in China as soon as possible.

Classification of Goods and Services

China and Australia are both signatories to the Nice Agreement and have adopted the Nice Classification System of classifying goods and services for the purposes registering trade marks.  Under this system, goods and services are divided into 45 classes - 34 classes of goods and 11 classes of services.  While there is flexibility in Australia in registering trade marks in respect of goods and/or services which are not easily classified under the Nice Classification System, the opposite is true in China.

In Australia, the Trade Marks Office maintains a database of goods and services (found here) that includes Nice items and determinations relating to goods and services not covered by the Nice Classification System.  Additionally, the Australian Registrar of Trade Marks has discretionary power to decide questions arising as to the class within which any goods or services should be classified. 

In China, the goods and services contained in the 45 classes under the Nice Classification System are further divided into subclasses. Goods and/or services which cannot be classified according to these subclasses are considered non-standard and are generally excluded from protection in China.  The consequence of this for owners of Australian trade mark applications wanting to extend protection of their trade marks to China is that it is usually necessary to file or amend Chinese trade mark applications such that the goods and/or services specified ‘fit’ into the correct subclasses.  This may weaken the strength of the resulting registration and/or increase the vulnerability of the registration to cancellation.

To illustrate this point, ‘retail and wholesale services’ are considered to fall within class 35.  While the Nice Classification System does not specifically provide for the classification of ‘retail and wholesale services’ per se, applications specifying such services have been registrable in Australia.  In contrast, Chinese trade mark applications specifying ‘retail and wholesale services’ in class 35 are not registrable, and it has been necessary to seek protection for trade marks in China for such services with less than accurate specifications in class 35.

The Tenth Nice Classification System

The Nice Classification System is updated regularly.  To this point, China and Australia have both recently adopted the Tenth Nice Classification System.  This update now provides trade mark owners, particularly in the life sciences sector, with 7 specific new types of retail or wholesale services classifiable in class 35 in China effective from 1 January 2013.  These are:

  1. retail or wholesale services for pharmaceutical, veterinary, sanitary preparations and medicinal products, 
  2. retail or wholesale services for medicine, 
  3. retail or wholesale services for pharmaceutical preparations, 
  4. retail or wholesale services for sanitary preparations,
  5. retail or wholesale services for medicinal products, 
  6. retail or wholesale services for medicine for veterinary purposes, and 
  7. retail or wholesale services for veterinary preparations.

Broadly specifying ‘retail or wholesale services’ per se in class 35 will still not be allowable in China.

The inflexibility of the Chinese trade mark registration system, in conjunction with the above update, will create a potential headache for trade mark owners in the life sciences sector who conduct business in China and who use their trade marks in connection with ‘retail and wholesale services’ and have registered their marks with less than accurate specifications.  That is, while there are transitional provisions in place, it will be necessary for these owners to re-register their trade marks in respect of one or more of the above 7 services.  Any delay in doing so my result in a misappropriation of rights to third parties who might apply to register trade marks in bad faith.  It is therefore recommended that swift action be taken by these owners to re-register their marks in class 35 to avoid a misappropriation of rights.

by Chris Vindurampulle