Pros and Cons of Multi-Class Trademark Application in the PRC

Written by King & Wood Mallesons’ Trademark Group

As expected for years by brand owners, the Chinese Trademark Office has announced new practice regulations and has started to receive multi-class trademark applications since China’s recently revised Trademark Law became effective on 1 May 2014. But will this practice meet the expectations of the trademark applicants?

As a common practice in many countries, multi-class trademark applications streamline the registration process in a cost-effective manner. Not only is the cost for filing reduced for extra class(es) with one application, but that for future renewal, assignment, and recordation of name/address change, etc. can also be significantly reduced. Multi-class registration also brings high efficiency to the administration of trademark portfolios for brand owners.

There is no doubt that trademark applicants who have a large trademark portfolio in China have expected to benefit from China’s new multi-class trademark application practice, as China has been ranked number one for more than ten years in terms of the number of trademark applications filed within its borders.

But the assorted regulations from the Chinese Trademark Office are far from satisfactory. As the new multi-class application brings efficiency in portfolio management, it also comes with imperfections, and at least for now, one of the most practical benefits, cost-saving, seems much less promising.

According to the regulations for multi-class applications, the official fee is calculated per class and there is no discount for any extra class(es) in one application. After registration, the official fee for future recordation of name/address change, assignment, license and renewal is also calculated by current standards (ie, based on the number of classes). In other words, there is no difference for official fees between a single-class application and a multi-class application.

Even so, multi-class applications do bring efficiency to a brand owner’s trademark portfolio administration work. For instance, to better facilitate administration work, a multi-class registration only has one registration number and one filing/registration date. However, this convenience is based on the condition that there will be no division of the registration in the future. The new law and regulations only allow an application to be split in the event of a partial refusal. That is to say, the applicant cannot split a multi-class application if someone files an opposition against or the applicant/registrant tries to assign only a portion of the protected goods/services. The window for a division only opens when the Trademark Office issues a partial rejection to some of the designated goods/services. When this occurs, the applicant can choose to divide the multi-class application into one application covering the approved goods/services (so as to get registration first) and one application covering the rejected goods/services (for the purpose of filing a request for review).

Another drawback of the multi-class application is that if the description of goods in one class is deemed as not acceptable by the examiner during the examination, the process of the entire application will be delayed for further examination. It is of course the same situation in other countries, but it seems more risky in China as the Chinese Trademark Office may be inclined to only give one opportunity to each applicant to amend its goods/services description during the prosecution, and may refuse the application if the applicant fails to properly make amendments within this limited window of time. Thus, filing multi-class trademark applications in China may be riskier, as applications with partially defective goods/services descriptions may be rejected in their entirety despite containing partially acceptable descriptions for other classes of goods/services.

Therefore, it seems the advantages of the new practice of multi-class applications in China are limited. The possibility of the reduction of attorney fees may have been one of the expectations, but balancing the pros and cons in the post-registration period, the brand owners may be caught in a dilemma. Thus, the new practice regulations still need fine-tuning to meet the expectations of applicants, especially in regards to the fee policy and the practice of application divisions.