In today globalized business landscape, trademarks have become essential intangible assets for enterprises, playing a vital and irreplaceable role in market competition, with their value becoming increasingly significant. Article 10, Paragraph 1 (7) of the Trademark Law prohibits the registration and use of deceptive marks, stating that marks that are deceptive and likely to cause the public to have misperceptions about characteristics such as the quality or origin of the goods shall not be registered. This provision is a key component of the Trademark Law designed to protect public interests.
In recent years, enforcement of this clause has become more stringent, leading to a steady increase in trademark applications being rejected on these grounds. The complexity of related issues presents considerable challenges to legal fairness and administrative efficiency, while also creating difficulties for trademark applicants. This article seeks to examine the current application and case examples of the “deceptiveness” clause within the Trademark Law, offering valuable insights to help applicants better understand and navigate this provision. Our goal is to assist businesses in mitigating risks early on and enhancing their chances of successful trademark registration.
I. Understanding the Deceptiveness Clause
Definition and Evaluation Criteria of the Deceptiveness Clause
The deceptiveness clause originates from the Paris Convention for the Protection of Industrial Property, which mandates the refusal or invalidation of trademarks that violate morality or public order, particularly those that may deceive the public. Since the enactment of China Trademark Law in 1983, corresponding provisions have been established to embody the principles of good faith and public interest protection. The primary legislative intent is to prevent deceptive trademarks from misleading consumers into making incorrect purchasing decisions, ensure trademarks accurately represent the source of goods or services, maintain orderly market operations, protect the legitimate rights and interests of consumers, producers, and businesses, and support the healthy growth of China socialist market economy.
Article 10, Paragraph 1, Item 7 of the current Trademark Law specifies that trademarks which are deceptive and likely to cause the public to misunderstand key characteristics such as the quality or origin of goods shall not be registered. The 2021 Guidelines for Trademark Examination and Adjudication provide further interpretation of this provision:
- In this article, deceptiveness refers to a trademark that presents an exaggerated or factually inaccurate representation of certain attributes, such as the quality or origin of the goods or services it identifies, which may lead the public to form incorrect impressions about these characteristics.
- When determining whether a mark is deceptive, a detailed analysis must be conducted, taking into account the specific nature of the designated goods or services. If the mark is likely to cause consumers to misunderstand aspects such as the quality or production method of the goods, it is considered deceptive under this provision.
- Conversely, if, based on everyday experience, the public is unlikely to be misled about the quality or origin of the goods or services associated with the mark, it does not fall within the scope of this article.
Based on the above provisions and interpretations, it is evident that within the framework of Trademark Law, deceptive behavior occurs when a trademark exaggerates or inaccurately represents attributes such as the quality or origin of the goods or services it identifies. The resulting misperception caused by this deceptiveness typically relates to two key aspects: the characteristics of the goods, such as quality, or their origin. When determining whether a trademark is deceptive, a comprehensive assessment should be conducted, considering the trademark as a whole, the general level of public awareness, everyday experiences, and the specific goods or services involved.
Key Aspects of Deceptiveness Clause in Judicial Practice
The deceptiveness clause outlined in Article 10, Paragraph 1 (7) of the Trademark Law serves to prohibit the registration and use of certain marks. Given that this clause directly restricts market participants’ ability to select commercial marks that identify the source of goods or services, judicial authorities have consistently approached its application with caution. The evaluation of deceptiveness involves three key criteria:
- First, the mark includes content that describes the quality, primary raw materials, functions, uses, weight, quantity, or other characteristics of the goods;
- Second, the relevant public is likely to associate this description with the attributes of the goods designated by the mark, and such description is misleading;
- Third, this misleading description is significant enough to influence the purchasing decisions of the relevant public.
In assessing whether a mark is deceptive, these three elements follow a sequential and progressive logic. Each element must be evaluated in order, and if any criterion is not satisfied, the assessment can be concluded early, determining that the mark is not deceptive without further analysis. Only when all three elements are met can a mark be classified as deceptive. This evaluation standard is widely accepted in judicial practice and has been consistently applied in numerous rulings concerning the “deceptiveness” clause.
Consequences of Violations
In accordance with the following legal provisions, using a deceptive mark as a trademark may result in enforcement actions such as cessation of use, mandatory corrections within a specified timeframe, public notification, and fines imposed by administrative authorities. The valid determinations made by the National Intellectual Property Administration serve as a foundation for these authorities to carry out investigations and enforcement measures in compliance with the law.
- Article 52 of the Trademark Law: If an unregistered trademark is used as if it were registered, or if the use of an unregistered trademark violates Article 10 of this Law, the local administrative department for industry and commerce shall order the cessation of such use, require corrections within a designated period, and may publicly notify the violator. If the illegal business volume exceeds 50,000 yuan, a fine of up to 20% of the illegal business volume may be imposed; if the illegal business volume is absent or below 50,000 yuan, a fine of up to 10,000 yuan may be levied.
- Article 15 of the Criteria for Judging General Trademark Infringements issued by the National Intellectual Property Administration [Guo Zhi Fa Bao Zi [2021] No. 34]: Effective decisions and rulings by the National Intellectual Property Administration that determine a trademark registration application violates Article 10 of the Trademark Law can be used as a legal basis for trademark enforcement authorities to conduct investigations and prosecutions accordingly.
II. Analysis of Current Application of Deceptiveness in Trademark Refusal Review Cases
Statistical Overview of Trademark Refusal Review Cases
During the briefing on administrative hearings for trademark refusal reviews involving the deceptiveness clause, held by the Beijing Intellectual Property Court on March 31, 2021, it was clearly emphasized that the review standards applied by both judicial and administrative bodies are largely consistent. This indicates that the likelihood of success in trademark refusal reviews based on the deceptiveness clause remains limited. The stringent review criteria have made “deceptiveness” a critical consideration for trademark applicants during the design process.
Strategies to Avoid Rejections under the Deceptiveness Clause Based on Review Cases
Drawing on the Guidelines for Trademark Examination and Adjudication, as well as recent refusal review cases, we have identified several common types of trademarks that frequently trigger scrutiny under the deceptiveness clause. Alongside these, we outline practical strategies to help applicants avoid rejection. We hope these insights will assist trademark applicants in making informed decisions when selecting their trademarks.
Trademarks Incorporating Generic Names of Goods or Services
Including an enterprise primary products or core business within a trademark can effectively and directly promote those key offerings. As a result, many businesses seek to register trademarks that contain generic names of goods or services. However, current review practices suggest that such trademarks should be limited to goods or services that are identical or closely related to the generic terms used. If the trademark covers goods or services that are not closely related to the generic names, it is highly likely to be rejected under the deceptiveness clause. Additionally, during the trademark examination process, examiners often do not differentiate between the relationship of the designated goods or services and the generic names in the trademark, leading to blanket rejections. This distinction is typically considered only during the refusal review stage, based on the applicant’s explanations. Therefore, when applying for a trademark that includes a generic name, it is important to carefully select the designated goods or services to minimize the risk of unnecessary refusals.
Trademarks Incorporating Raw Materials of Products
When a product’s key selling point is its use of rare or valuable raw materials, applicants often include the generic names of these materials in their trademarks. However, such trademarks may face rejection due to potential misunderstandings regarding the raw materials or other product attributes. To address the deceptiveness concern, applicants can specify that the trademark applies only to goods containing those particular raw materials. In China, domestic trademark applications encounter stringent review standards for product descriptions. Descriptions that reference raw materials often do not align with the standard goods categories in the Classification of Similar Goods and Services or the Trademark Office’s accepted goods list, making them difficult to pass the initial documentary review.
Additionally, once a domestic trademark application is submitted in China, applicants generally cannot modify the description of designated goods unless the Trademark Office issues a correction notice requesting such changes. Conversely, the review process for Madrid International Registrations is more flexible. If a trademark is initially rejected, applicants can still amend the description of designated goods through a limitation procedure. Therefore, the strategy of including raw material names in the designated goods description to overcome the deceptiveness clause is particularly effective for foreign applicants using the Madrid International Registration system. For instance, in a recent case, this approach successfully addressed the “deceptiveness” issue by limiting the designated goods to those containing specific raw materials.
Fictitious Chinese Trademarks Incorporating Descriptive Terms
Typically, trademarks that include directly descriptive terms may risk violating the deceptiveness clause, whereas fictitious trademarks generally avoid such issues. However, in practice, applicants often incorporate descriptive words when creating fictitious trademarks. This can result in trademarks that directly or indirectly describe certain characteristics of the goods or services through individual words or components, potentially approaching the limits of the deceptiveness clause.
During the official review process, two key factors are carefully evaluated by examiners: the inherent meaning, pronunciation, and appearance of the words themselves, and their relevance to the features of the designated goods or services. With increasingly stringent review standards, the acceptance rate for such trademarks is gradually declining. Therefore, when designing fictitious trademarks, it is advisable to avoid using words that strongly relate to the characteristics or raw materials of the products.
Interpretation of Foreign-Language Trademarks
In practice, disputes regarding the interpretation of foreign-language trademarks are more common compared to Chinese trademarks. Currently, the administrative review of foreign-language trademarks reveals certain trends. Although the practices of the National Intellectual Property Administration may not always be fully upheld in subsequent judicial proceedings, it is beneficial from both a cost and time perspective to address potential issues during the design phase. Therefore, careful consideration should be given to minimizing interpretative challenges when developing foreign-language trademarks.
III. Recommendations
In summary, when creating trademarks, applicants should consider avoiding terms that might trigger the “deceptiveness” clause by focusing on the following six key areas. This approach can enhance the likelihood of successful trademark registration, safeguard their interests, and establish a strong foundation for the brand’s long-term growth.
- If a trademark includes generic names of goods, services, or raw materials, carefully select the designated goods or services to ensure they fall within the appropriate scope covered by those generic terms.
- Avoid using words or phrases that describe the characteristics of goods or services, as well as any special or sensitive terms, when designing a trademark.
- For fictitious foreign-language trademarks, refrain from fully incorporating generic names, raw materials, or descriptive words related to the goods or services to prevent these elements from being dissected and interpreted during the review process.
- For foreign-language trademarks, verify whether their meanings might be misinterpreted in Chinese online dictionaries or media reports. If inaccuracies are found, promptly communicate with the relevant platforms to request corrections.
- For trademarks in non-English languages, carefully review both the original language meanings and their interpretations within the Chinese context to avoid submitting foreign-language trademarks that could be perceived as “deceptive.”
By adhering to these guidelines, applicants can better navigate the trademark registration process and support the sustainable development of their brands.