Welcome to my last blog in the Madrid series. If you have read any of my last blogs on the subject:

You will know by now that, as far as I’m concerned, there is no one size fits all when it comes to filing international applications under the Madrid Protocol – if you understand the intricacies, you can make informed decisions. This is doubly the case with China- a pretty special country that needs to be treated as such!

Why is China Special?

China is special when it comes to filing trademark applications because of its goods and services classification system. Yes, China uses the Nice classification system of 45 classes like much of the world, but China also has the overlay of its subclassification system. These are subclasses within the Nice classes. And it’s these subclasses that the Chinese examiners pay close attention to.

The number of subclasses vary from two subclasses within Class 15 (musical instruments) through to 54 subclasses in Class 7 (for tools and machines). For an exhaustive list of Chinese classes and subclasses, and if you are a Chinese language speaker, check out this Chinese National IP Association website.  Otherwise, you can check out our very own China Drafter tool within the Sortify.tm Attorney productivity suite

Why do these subclasses matter? Well, China has a rigid rules-based system for assessing similarity. Chinese examiners treat goods or services within a subclass as “similar”. Goods which fall in the same subclass ARE deemed similar, irrespective of what your specification actually states. 

There are two other features which are important to be aware of:

  • The subclassification system also involves cross-classification (across Nice classes) for similarity. So one subclass within a Nice class may be cross-classified with another subclass in a different Nice class.  Cross-classified goods are also considered “similar” notwithstanding the fact that they are in different Nice classes.
    One example is Chinese subclass –2907 “milk and milk products”, cross-classified with “Food for babies, Lacteal flour for babies and Milk powder for babies” and “Albumin milk/protein milk” both in the subclass.
  • If goods are not within the same subclass, they are deemed different and will not be taken into consideration for examination purposes. In other words, they will not constitute a block. 

The consequence of this system is that it’s really important to get all of your subclasses covered in a trademark registration. If you don’t cover off all the relevant subclasses, there’s a chance your exact mark could be registered in China within the same Nice class. The Nice class may be the same but the specification will simply list goods within a different subclass. This peculiarity has generated a whole new line of business for the advantageous! 

Is Madrid Best Practice?

What is Best Practice? The accepted view is that an applicant should file to cover at least one good in each subclass to give themselves some defensive protection. 

In an ideal world, if China is an important market, you’d use a Chinese associate who is completely au fait with the subclassification system and will file for goods right across all the subclasses within a Nice class. At this stage, intention to use – a declaration of use – is not required. So this strategy of covering off all the subclasses, even with goods or services you have no intention to use on, is quite valid and acceptable.

Best Practice is really hard to achieve via the Madrid Protocol – luck has a lot to do with it, and luck is not something that we recommend relying on if China is crucial to your business. The applicant actually has no say in the subclassification(s) assigned to their Chinese national application. They must rely on the Chinese Examiner to put a particular good in a particular subclass. And generally there is no way to appeal classification. There’s a high reliance on luck! 

Here are some examples where luck played a role. These may be familiar to you if you listened to our Madrid Protocol webinar.

Where we got lucky and Madrid worked well!

This is actually an example from a filing a couple of years ago, made by Sortify’s associated IP law firm Potter IP. It was a Nice class 7 filing made via the Madrid Protocol. As mentioned previously, Class 7 has 54 subclasses in China. If you want to comprehensively cover class 7 via a national filing, the fees would be large as you pay for each subclass. Most applicants will simply choose their top 10 or 20 subclasses and let the rest go.

In this case a very nice examiner took the view that “some of those broad descriptions from the specification seem to cut across all of these subclasses.” The result? We were given similar group protection for that trademark across every single Chinese subclass within class 7. We were lucky! 

In this case, the applicant actually got better protection via the Madrid system than they would have got via national filings in all likelihood. A national filing resulting in this scope of protection would have been prohibitively expensive.

Where Madrid didn’t work so well

Many of you will know about the Slack instant messaging application. It’s used worldwide these days – the company is big – they listed on the NASDAQ recently! They filed their first trademark application for SLACK internationally via the Madrid Protocol in 2015. They used a very US-centric specification of goods in Nice class 9:

Downloadable mobile application featuring software for use in group communication, namely, postings, memoranda and instant messaging, file sharing, calendar synchronization, and automated integrations with external service providers”

This is the specification that was filed for in China via the Madrid Protocol. Unluckily, the Chinese examiner looked at it and said… “That’s in subclass 0901, period. It’s only one good. I’m only going to give you protection in subclass 0901.” And unfortunately, that’s what they got. 

And, as a result of this narrow coverage, another company was able to get in and file an application for SLACK (slightly stylized) shortly thereafter.  And they covered every subclass within class 9. They got a few subclass objections on the way through, but ultimately this Chinese company has a registration for their SLACK trademark in China across the majority of class 9. 

What about a good example?

Great examples of Chinese trademark registrations done well are those of the Canadian brand, Lululemon – we at Sortify.tm are a big fan of Lululemon. Unfortunately, we don’t know all the details of their particular approach to filing in China, but their applications and registrations appear to have been managed very well.

For example, viewing their Nice class 25 registration 21567220 on the official database, you can see it’s a non-Madrid Protocol filing. Most of the record is in Chinese, but you can see the mark is Lululemon and it’s owned by Lululemon Athletica Canada Inc. Crucially, they have all the class 25 subclasses covered, except for 2506, which currently has no goods in it.

On a defensive basis, they have got complete coverage to stop anyone else from registering Lululemon for clothing in China. If they had left out a subclass, that could have left open the way for someone to use and register the exact same mark on a clothing product in China, which is obviously highly undesirable. So, to us, that’s what best practice looks like.

 

final thoughts

So – what’s luck got to do with it? As it turns out, when it comes to the Madrid Protocol, quite a bit!
Therefore it’s important to understand the limitations of the system.

We recommend:
If the Chinese market is important to you, take control in China. File through an agent and choose your subclasses carefully.

If you go via Madrid, it’s out of your control.
If China’s not so important? Then why not tick the box designating China on your Madrid Protocol application form. The result may be narrower in scope than you’d like, but it can be a cost-effective way to get some (sometimes surprisingly broad) coverage. 

 

If you’re interested in learning more about the Madrid system – when to avoid it and when to embrace it, check out our recent webinar ‘Avoid or embrace? Tips for getting the most out of the Madrid Protocol’. Alan also offers some tips around navigating the system and addresses any concerns you may have. Watch the recording here.