Yunquan Li Liujia Wen December 5 2022 Limitation of goods or services: national route or international registration route? Wanhuida Intellectual Property | Intellectual Property - China Yunquan Li, Liujia Wen Intellectual Property IntroductionNational routeIR routeCommentIntroductionIn trademark prosecution practice, the applicant or registrant may wish to limit or even abandon certain goods or services related to a trademark in order to obtain registration or avoid creating confusion. Jurisdictions including 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 – namely:filing a national application with the China National Intellectual Property Administration (CNIPA); orfiling for international registration (IR) through the Madrid Protocol, designating China.The two routes are governed by different sets of rules.With regard to the examination of goods and services of a national application, the CNIPA primarily relies on the Classification of Similar Goods/Services (the Classification Manual), which is the Chinese version of the Nice Classification of Goods and Services (the Nice Classification). The Classification Manual divides goods and services into subclasses so that those falling in the same subclass are deemed to be similar in principle, unless otherwise specified.Alongside the standard items listed in the Classification Manual, the CNIPA also accepts goods or services included in the TM5 ID List and those listed in a quarterly updated database of acceptable goods or services. Despite the CNIPA's effort to regularly update the acceptable entries, it is still an onerous task to keep the accredited goods and services up to date.Other items are often deemed to be 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 the fact that the CNIPA is reluctant to accept them, given that the clarification thereof would arguably prolong the examination process and create a backlog.National routeIn the context of the national route, brand owners may only abandon goods or services enumerated in the list of specifications after the first filing. The 2021 version of the Trademark Examination Manual (the Examination Manual) reiterates that the specifications which applicants wish to delete must be the same as those stated in the first application, and that applicants may not alter or limit the original specifications. Limitation of the specifications, even within the original scope, is thus impossible. Deleting certain goods or 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 or services.IR routeIn 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 that such alterations do not extend the original scope. The Examination Manual also warns that where the new list of goods or 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 or services of an IR, they may opt to renunciate trademark rights on all designated goods or services in China or cancel the mark on partial or all goods or 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 or 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 take a more nuanced approach to identifying specifications. 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 be disadvantageous in the following circumstances.Where clarification fails to remove obstacleSince the CNIPA relies heavily on the Classification Manual and the subclass regime, where limitations by way of clarifying the specifications fail to remove the obstacles and the new goods or services still fall under the same subclass, the applicants can only abandon all goods or services in the subclass(es) identical to those of the cited mark. Abandonment is available via both national and international routes.Where rephrasing may extend original scopeUnlike 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, brand owners often use "sales promotion for others" (subclass 3503) or "presentation of goods on communication media, for retail purposes" (subclass 3502), out of expediency, 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 can only use the standard descriptions in subclass 3509 or highly similar specifications for retail services.Where illegal goods and services are involvedGoods and services that are deemed illegal by the Chinese authorities are unacceptable in trademark registration. In general, the pornography, gambling and marijuana industries are illegal in China, and any goods or services associated with them are banned by the CNIPA. It is therefore impossible to register a trademark on these goods or services through either route.The CNIPA also rejects goods or services related to cryptocurrency and virtual currency. In an IR refusal issued in early 2022, the CNIPA partially rejected an IR mark on the following goods and services, in class 9 and 36, respectively:computer software for managing cryptocurrency and NFT transactions using blockchain technology; downloadable computer programs (software) for virtual currency; downloadable software for virtual currencyvirtual currency trading services; virtual currency brokerage; virtual currency price information providing services; financial transaction services of cryptocurrency through internet platformIn the Classification Manual, "downloadable electronic wallet" and "electronic wallet payment services" are standard descriptions that can be broadly interpreted to cover virtual currency and cryptocurrency. So far, it remains unclear how the CNIPA draws the boundary between the goods and services related to virtual goods and currency.CommentBrand 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, where:they want to secure an early filing date but are still unsure over the specifications; orthe designated goods or services are non-standard descriptions.Some brand owners seeking to overcome registration obstacles in China may wish to explore the possibility of reaching an agreement with the applicant or 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 agreements have no bearing on the CNIPA's examination outcome.Brand owners are therefore particularly recommended to file an additional IR application (designating China) with updated descriptions if they are obliged to specify the goods or 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.For further information on this topic please contact Yunquan Li or Liujia Wen at Wanhuida Intellectual Property by telephone (+86 10 6892 1000) or email ([email protected] or [email protected]). The Wanhuida Intellectual Property website can be accessed at www.wanhuida.com.This article was first published by IAM.