Article 10 of the Trademark Law stipulates several situations in which "shall not be used as trademarks". Among those, item (7) regulates that “Those in the nature of fraud in advertising that easily confuses the public with the quality or other characteristics or origins of the goods, or the place of origin of the goods shall not be used as trademarks.” In practice, the said provision is usually referred to as a "deceptive" provision.

The so-called prohibition provisions refer to the clauses in the Trademark Law that forbidden the use of certain words, graphics, or combinations of graphics and text as trademarks. If violating the stipulation, it means that it cannot be used as a trademark itself, nor can it obtain possibility of registration through use.

In accordance with the law, with the nature of fraud means that a trademark shows something exceeding the inherent degree or inconsistent with the facts for the characteristics like the quality or place of the designated goods or services, easily making the public have misunderstanding of the said points. Next, let’s show you what kind of logo will be identified as "deceptive" in combination with a case.

One group limited company applied for the registration of its logo on the 32nd category of non-alcoholic juice beverages, beer (non-alcoholic) and other commodities. After being rejected by CNIPA on the grounds of violating the "deceptive" provision during reexamination, it sued to the Beijing Intellectual Property Court. The Intellectual Property Court held that the term “Xian zha” has the meaning of “freshly squeezed”, and its use on non-alcoholic beverages and other commodities can easily make the relevant public believe that its products are all “freshly squeezed”, which may lead to misidentification on the characteristics of technology and craftsmanship. Therefore, it was identified as deceptive, and the plaintiff's litigation request was rejected.

In judicial practice, the following factors need to be seriously taken into consideration for the application of "deceptive" clauses:

The basis for judging whether the trademark is deceptive is that the registered trademark objectively expresses or describes the quality of the goods or services and other characteristics or origin information, which is quite different from the truth, may causing a wrong understanding for the related public. Whether a trademark applicant has a subjective intention to deceive is usually not considered.

Only when a mark is combined with a product or service can it play the role of identifying the origin. To determine whether a mark is deceptive, a concrete analysis and judgment should be made based on the understanding of trademark’s meaning and combining the characteristics of the designated goods or services.

When judging whether a sign is in the nature of fraud, it is not required that the sign actually produces deceptive results. As long as the registration mark itself may cause the public to misunderstand, it is in compliance with the regulation of "deceptive" clauses.

The judgment to determine whether the logo is deceptive should be consistent with the general cognition level and cognitive ability of the public. If the public will not misunderstand the quality or place of the goods or services designated for use by the trademark in terms of their daily life experience, it does not conform to the cases stipulated in the "deceptive" provision.

The "deceptive" clause stipulates marks violating the public interests, it does not apply to situations where marks only damage the private rights of specific subjects. If a trademark only infringes on the prior rights and interests of others, it should be regulated by other provisions of the Trademark Law.

The "deceptive" term is an absolute prohibition term for trademarks, and marks applying to the conditions specified in this clause cannot be used as trademarks, nor can they be registrable through use.

The "deceptive" term is one of the most direct manifestations of the principle of good faith in the Trademark Law. Its legislative purpose is to prevent "deceptive" signs from influencing consumers to make wrong decisions on consumption, and to enable trademarks to play their due role in indicating the source of commodities or services.

From Beijing Intellectual Property Court

April 23rd, 2021