Article 10 of China's Trademark Law sets out circumstances when a trademark application will be refused and prohibited from use by the China National Intellectual Property Administration (CNIPA). These circumstances, among others, are known as absolute grounds. Article 10(1)(2) states that a sign that is identical or similar to the national flag of a foreign country is prohibited from being used (and registered) as a trademark, unless the consent of the government of that country is obtained.
On 23 July 2018, Tommy Hilfiger (TH) filed a trademark application for a stripe logo trademark in class 25, which was rejected on 24 December 2018 by the CNIPA on the ground that it was similar to the national flag of the Yemen Republic (Yemen) and should be prohibited from registration.
On 29 January 2019, TH filed for a review of refusal before the CNIPA's trademark review and adjudication department (TRAD), arguing that the remarkable difference between the applied mark and Yemen's national flag in terms of colour combination, layout and length-to-width ratio made the two distinguishable. The TRAD dismissed the argument and upheld the refusal on 23 July 2019.
In parallel to the review of refusal, TH filed for the application of the same device mark in class 25 in Yemen to contest the refusal. The Yemeni authority granted the registration on 22 October 2019.
In December 2019, TH appealed the TRAD's review of refusal decision before the Beijing IP Court, submitting a notarised and legalised trademark registration certificate issued by the Yemeni authority to prove that TH had obtained the consent of the Yemeni government in terms of the registration of the litigious trademark. On 20 July 2020, the Beijing IP Court gave a decision upholding the contested decision.
TH appealed to the Beijing High Court, which repealed, on 22 September 2021, the first-instance decision and the contested decision and ordered the TRAD to remake its decision. The Beijing High Court found as follows:
- TH's mark was similar to Yemen's national flag in terms of overall appearance and visual effect.
- The notarised and legalised registration certificate issued by Yemen indicated that TH had registered the same device mark, designating roughly the same goods, in Yemen, from which the Yemeni government's consent over the registration of the litigious mark in China could be presumed.
- In compliance with the exception clause of article 10(1)(2) of the Trademark Law, the mark had to be allowed for registration.
Obtaining a trademark registration has become increasingly difficult in China. In 2020, the CNIPA's approval rate decreased from 81% to 61% within just one year. As far as review of refusal is concerned, only 4.7% of the CNIPA's decisions are reversed in the first instance of administrative litigation, if the agency excludes change of circumstances, where the obstacle to the registration of the refused trademark has been removed.
In practice, in order to overcome the CNIPA's refusal relating to article 10(1)(2), the applicant needs to submit evidence certifying that government approval from the foreign country has been secured. As a practical and more viable alternative, the applicant is advised to obtain the registration of the same mark, designating the same goods or services in that foreign country.
For further information on this topic please contact Ye Cai or RuiRui Sun 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.