China: Restrictions And Conflicts – Challenges Faced By Pharmaceutical Trademarks In China

Last Updated: 6 November 2019
Article by Sarah Song

Trademarks represent one of the most essential competitive and strategic assets of a company. When considering how consumers identify their choices among other alternatives, trademarks are key. Because pharmaceutical products play an important role in public healthcare, the protection of pharmaceutical trademarks brings special challenges, particularly when it comes to a pharmaceutical product's name, generic name and public interest.

Restrictions on registration

According to the relevant law, the registration of pharmaceutical trademarks has numerous restrictions. Pharmaceutical trademarks should have distinctive features and must not conflict with any pre-existing lawful rights of others in order to qualify for registration. When a pharmaceutical trademark is only a direct representation of the quality, primary raw materials, functions, intended purpose, weight, quantity or other characteristics of the relevant pharmaceutical product, the China Trademark Office will reject registration based on the mark "lacking distinctive features". In spite of this, there are cases where such pharmaceutical trademarks have been approved for registration where they have acquired distinctiveness through the registrant's use.

A pharmaceutical trademark should not conflict with another's pre-existing copyright, trademark right or any other interests protected by Chinese law. When it comes to pharmaceutical marks, the Trademark Office will also consider whether the applied-for mark conflicts with another party's pre-existing pharmaceutical product name.

If the applied-for mark violates Article 10 of the Trademark Law, the Trademark Office will reject the application. Signs that are prohibited from being registered as pharmaceutical marks in the Chinese market include:

    - trademarks which discriminate against nationality, race or religion, among others;

    - marks identical or similar to the name, sign or mark 'red cross' or 'red crescent';

    - marks that are deceptive and likely to cause public confusion in terms of the quantity, other characteristics or place of production of the relevant goods; and

    - marks which, according to Chinese culture, are detrimental to socialist morality and customs.

Any use of a pharmaceutical trademark in the Chinese market in violation of the above may be subject to a fine of up to 20% of the company's revenue.

If a pharmaceutical trademark has been recognised as the generic name of the relevant pharmaceutical products, the Trademark Office will not accept an application for that mark. In practice, even where a pharmaceutical mark is not a generic name when the trademark application is submitted, the Trademark Office will still not grant the trademark right if the examiner observes that the mark in question has become a generic name during the reviewing term. Likewise, if a pharmaceutical trademark was a generic name when the application was filed, but is no longer one by the time that the registration is processed, the Trademark Office will not be prejudiced against such a registration.

Restrictions on use

First, according to the relevant regulations, pharmaceutical trademarks that have not been registered before the Trademark Office cannot be used in package inserts and product labels – until the registrant obtains the relevant trademark registration certificate, the authorities regard it as unregistered. Registered pharmaceutical trademarks should be printed on a corner of the drug's product label. When using a pharmaceutical trademark that includes words, the font should be a quarter of the size, or smaller, of the font used for the generic name of the relevant pharmaceutical product.

Second, according to a notice issued by the State Food and Drug Administration in 2006, the advertising of any pharmaceutical trademarks that have not been registered is prohibited. A pharmaceutical trademark used to advertise a drug must be used together with the drug's generic name. When using the mark in textual and television advertisements, the font type used for a word-based pharmaceutical trademark should be calculated based on the area of a single word and must not exceed a quarter of the size of the font used by the generic name of the relevant pharmaceutical product.

Registrants of any pharmaceutical trademark should also pay attention to the provisions of the Trademark Law. For example, the registrant should not, without authorisation, make changes to the registered pharmaceutical trademark, the name or address of the registrant or other registration items during the course of using the registered pharmaceutical trademark.

Coexistence and conflict

Pharmaceutical products sold in the Chinese market may have a pharmaceutical trademark, product name and a generic name used on the labels and package inserts.

The pharmaceutical product name and generic name are regulated by the Food and Drug Administration, while the pharmaceutical trademark is regulated by the Trademark Office. Given these separate and distinct authorities, the coexistence of pharmaceutical product names and pharmaceutical trademarks has caused conflict.

Pharmaceutical trademarks and generic names

In China, the generic names of pharmaceutical products include statutory generic names and conventional generic names. According to the relevant regulations, the statutory generic name of a pharmaceutical product is formulated and revised by a pharmacopoeia commission under the Drug Regulatory Authority in accordance with the national drug standards, which is listed in the Pharmacopoeia of the People's Republic of China and other drug standards published by the authority. In order to identify pharmaceutical products with the same ingredients or formulae, it is mandatory to indicate the generic name of the pharmaceutical product. The conventional generic name refers to a name that signifies to the relevant public certain kinds of pharmaceutical. If the name of the pharmaceutical product is listed in professional reference books and dictionaries, the Trademark Office will use it as an important reference to determine conventional generic names. Conventional generic names are usually determined according to the general perception of the relevant public nationwide.

If a pharmaceutical trademark is recognised as a generic name, the Trademark Office will not approve it for registration. Further, even if the pharmaceutical trademark was not a generic name when the trademark Office approved the  registration, and the registered trademark became a generic name due to the pharmaceutical companies' improper use of it or for other reasons, according to the Trademark Law, anyone is entitled to apply to the Trademark Office for the cancellation of such a mark. One of the most famous examples of such a degraded trademark is Bayer's painkiller brand Aspirin, which has been recognised as a generic name in many countries and has been used widely in the pharmaceutical industry.

The degradation of a registered pharmaceutical trademark into a generic name can be the result of, among other things, the following:

    - the trademark itself is not distinct enough;

    - the new pharmaceutical name is too professional, lengthy and complicated to be accepted by the consumer;

    - the authorities mistakenly published the pharmaceutical trademark as its product name;

    - the owner or an infringer promoted the pharmaceutical trademark improperly; and

    - the pharmaceutical trademark has commanded a monopoly in the relevant market for a long time.

Pharmaceutical trademarks and pharmaceutical product names

Before a pharmaceutical product name is approved for use, it goes through an examination procedure by the drug administrative authorities. During the procedure, the authorities will examine whether the name to be registered is the same as or similar to any pre-existing name. After approval for the pharmaceutical product name is obtained, the applicant can exclude others from using the same or similar names on the same pharmaceutical product. In another words, the applicant enjoys a certain legal interest in the pharmaceutical product name after examination and approval. Therefore, based on Supreme Court case law, if a pre-existing pharmaceutical product name was used prominently after approval and obtained a degree of influence in the market, it will be protected by the Trademark Law. Consequently, under certain conditions, a pre-existing pharmaceutical product name may prevail over a registered pharmaceutical trademark in China.

According to the relevant regulations issued by the Food and Drug Administration, since 2006 only pharmaceutical products with a new chemical structure or new active ingredients, as well as new pharmaceutical products that have been officially granted a patent of a compound, may apply for a pharmaceutical product name before the administration. However, pharmaceutical companies may continue to use pharmaceutical product names that were approved before 1 June 2006.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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