January 1,2020

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As is known to all that all existing goods and services at home and abroad are divided into 45 classes for trademark registration and protection. However, very few classes, like 35, causes so many misunderstandings and controversies. Examples like when “Double 11” was approaching, Alibaba asked the media to ban JD.COM’s advertisements, citing that JD.COM’s slogan used the word “双十一”, with a meaning of “Double 11”, and “双十一” was a registered trademark by Alibaba on Class 35 . Another example is  “今日头条”, meaning “Today’s Headline” . Beijing Botian Hengye Advertising Co., Ltd(北京博天恒业广告有限公司) sued Beijing Byte Dance Technology Co., Ltd(北京字节跳动科技有限公司) , claiming that the latter party used “今日头条” in advertising, which infringed Botian Hengye’s trademark right. It claimed over RMB 100 million for compensation. Last year, Tmall issued a new regulation, requiring that flagship stores on the platform must get a trademark registered in Class 35. The focus of controversy behind the above social hotspots is about the nature of Class 35. This article will try to systematically sort out the nature of Class 35 and how to protect trademark right in Class 35.

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■Common misconceptions

  • Misconception①：Companies must register in Subclass 3501 for advertising for their own brands.
  • Misconception②：Companies must register on franchise management (Subclass 3502) for opening chain stores.

The above misconceptions have misunderstood the positioning and nature of Class 35. In fact, once the right holder obtains a certain trademark on product, such as food, or a trademark on service, such as a restaurant, they have the freedom to publicize and promote the brand, including the nationwide direct chain operation or licensing business operations. As mentioned in Article 48 of the Trademark Law, the use of trademarks refers to the use of trademarks on goods, packaging or containers of goods, and commodity transaction documents, or the use of trademarks in advertising, exhibitions, and other commercial activities, identifying the source of a product. The advertising and franchise management mentioned in Class 35 actually refer to the advertising company that produces advertisements or marketing for the enterprise, and provides management consulting or services for the enterprise on the chain operation strategy.

  • Misconception③：To open a flagship store on Tmall, a trademark must be registered in Class 35.

On September 25 last year, social media exploded with a new Tmall regulation: Without a trademark in Class 35, Tmall Flagship Stores Cannot Be Opened!  Articles on the necessity of registration of Class 35 by major intellectual property service companies have also been published. But in fact, the new Tmall rules only limit on some of the scopes. This regulation applies only to multi-brand flagship stores, not all flagship stores. The multi-brand flagship store refers to a flagship store opened with a service type trademark and operating multiple brands. The main point here is to provide product sales services and operate multiple brands in the store. Take Gome flagship store as an example. The opening of a mall that includes product sales services is its actual business scope; it has a Changhong TV flagship store, VIVO mobile phone flagship store, and so on. If you open an ordinary flagship store, such as the Philips flagship store selling TVs, then you only need to provide Philips brand trademark in Class 9 on TV products.

■Which businesses really involve Class 35?

To answer this question, we must first understand what services are provided by Class 35. The latest 11th Edition of the NICE Classification on Goods and Services explains Class 35 as follows: Class 35 mainly includes services provided by individuals or organizations whose main purposes are:

(1) Assist in the operation or management of commercial enterprises;(2) Assist in the management of business activities or business functions of industrial and commercial enterprises;

And services provided by the advertising department for various goods or services, designed to advertise to the public through various means of communication.

This class includes in particular:

Categorize various goods (other than transportation) for others to browse and purchase; such services can be provided by retail stores, wholesale stores, vending machines, mail-order catalogues, or via electronic media, such as through websites or TV shopping programs.

Based on the above explanation and my own understanding, I sort out the following companies in 9 industries need to register trademarks in Class 35.

NO. Type of Industry Registered Service Involved Remarks

 
 

1

  

Advertising business in advertising, design & media agencies

 

  

Advertising design; advertising planning; advertising promotion, writing of advertising drafts, advertising agency, etc.

 1. The business of traditional advertising agencies.

2. If a company finds someone to advertise for itself, the company does not need to register in advertising.
 

 

2

  

 

Portal, e-commerce platform, or

Internet Technology Company like APP

  

Website traffic optimization; Pay-per-click advertising; Providing business information through the website; Import and export agents; Marketing; Providing online markets for buyers and sellers of goods and services; Marketing for others

 1.New advertising platform on the Internet.

2. Information service business on Internet.

3.”Providing an online market” began to appear in 2015, marking the explicitness of the e-commerce service trademark.

4. “Marketing for others” is essential for a platform company, and registration is not required for independent brand sales.
3 Business management consulting companies Business management assistance; franchise business management /
4 Exhibition companies Organize business or advertising fairs; organize technology exhibitions /
5 Headhunters, recruitment services and

personnel management and other types of companies

 Employment agencies; business management of actors; psychological tests for selecting talents /
6  

Secretarial and office service companies

 Secretaries; photocopying services; document reproduction; invoices; office machinery and equipment rental, etc. /
 

7

  

Accounting companies

 Accounting; drawing bills; account statements; commercial audits; tax reporting services, etc. /
 

8

  

Drug store, hospital drug stores

 Retail or wholesale services of medicinal, veterinary, hygienic preparations and medical supplies; retail or wholesale services of pharmaceuticals, etc. /
9 Moving companies Business enterprise relocation /

※ At present, the popular Internet celebrity economy has very complicated business attributes, including advertising, marketing, marketing for others, and other subclasses, which are explained separately here.

It can be said that the above nine types of companies must register   trademarks in Class 35. Otherwise, being squatted by others will cause very serious consequences. Brands that have been heavily invested will be lost, and there will be a risk of litigation. There was no final conclusion which class websites and e-commerce platforms belong to, but most websites can now fall into the protection scope of Class 35.

■ The tangled “sales promotion for others” in Class 35

Tangled Point①: History

What kind of service is “sales promotion for others” in Subclass 3503? Are malls, supermarkets, and even flagship stores on e-commerce platforms suitable for this service? These have been disputed for a long time.

For example, China Trademark Office’s reply to  to Sichuan Administration for Industry and Commerce on August 13, 2004 regarding the questions on whether Class 35 of NICE Classification includes services of shopping malls and supermarkets (Trademark Application [2004] No. 171) has clearly stated: “Shopping malls and supermarkets are companies that sell goods, and their main activities are wholesale and retail. Class 35 includes mainly services rendered by persons or organizations principally with the object of:

  1. help in the working or management of a commercial undertaking, or
  2. help in the management of the business affairs or commercial functions of an industrial or commercial enterprise.

and in particular does not include: companies whose main function is to sell goods, that is, activities of commercial enterprises’. Therefore, Class 35 does not include ‘wholesale and retail of goods’, and the services of shopping malls and supermarkets are not included in this class. The content of ‘sales promotion (for others)’ is: providing advice, planning, publicity, consulting and other services for selling goods (services) for others. Though these sales companies registered trademark on “sales promotion for others”, their rights cannot be effectively protected by law.

However, as overseas countries gradually accepted the registration and protection of retail enterprises, as well as the blank protection of sales enterprises, and the inconvenience caused to enterprises by relying only on judicial cases, the trademark administrations were gradually forced to change. There are no clear instructions to allow retail companies to register trademarks in Class 35. However, starting from the 9th edition of NICE Classification, silently added the words “this service is available for retail , wholesale stores through mail-order catalogues and electronic media, such as websites or TV shopping shows; and under “especially not included,” “companies whose main function is to sell goods”  is deleted. However, it has not been clearly stated that this subclass is used to protect malls and supermarkets. In fact, for a long time, most people in China have reached a high consensus that “sales promotion for others” includes stores and specialty stores.

Tangled point ②: Do companies selling independent brands need to register?

In theory, according to the previous analysis, ordinary self-owned brands do not seem to need to register for this service, because they are exclusively for sales platform companies, such as shopping malls, supermarkets, and e-commerce platforms. But the helplessness in real life may lead to companies being forced to make different choices. In practice, the right holders often cannot accept the phenomenon of irregularity, and have to register in Class 35. The following case of trademark “采蝶轩” perfectly reflects this problem.

Zhongshan Catering Corporation Caidiexuan (中山市饮食总公司采蝶轩, herein refers to as Zhongshan Caidiexuan ) was established in 1987. On October 28, 1999, Zhongshan Caidiexuan was approved to register  trademark “采蝶轩” by China Trademark Office, on rice & pasta in Class 30 and providing food & beverage services in Class 43.

Anhui Cake King Group Co., Ltd(安徽采蝶轩蛋糕集团有限公司，herein refers to as Anhui Cake King） was established on June 8, 2000. It mainly produces and sells pastries. On October 28, 2003, it applied for registration in Class 35 to obtain the trademark “采蝶轩” (official script) . The service items are: advertising, sales promotion for others, etc. On May 7, 2006, Caidiexuan Service Company was approved by China Trademark Office to transfer the registered trademark.

Soon in 2012, Zhongshan Caidiexuan filed a lawsuit to the Hefei Intermediate Court: Anhui Cake King used the trademark “采蝶轩” on bread, pastry products and bakery services without permission, which infringed its trademark right. Zhongshan Caidiexuan claimed a compensation of RMB 15 million.

Lost in First and Second Instance

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Court opinion: Hefei Intermediate People’s Court held that Anhui Cake King used the “采蝶轩” logo as a service trademark on the store, not on the product, which did not cause confusion and misidentification by the relevant public, and did not infringe the plaintiff’s trademark right in the case. Service trademark can be used on service venues and signs. Zhongshan Caidiexuan’s trademark designation service items are “restaurants, fast-food restaurants”, etc. There is no specific service item for “bakery”.  The “restaurant” and the “bakery and cake shop” operated by Zhongshan Caidiexuan  are very different in terms of service purpose, content, method, target, consumption habits and so on. Therefore, their behavior did not infringe Zhongshan Caidiexuan’s exclusive trademark rights in Class 30 and Class 35. The plaintiff’s claim was rejected in the first instance.

And in the second instance, Anhui High Court rejected the appeal and upheld the original sentence.

Finally Won after Appealing to the Supreme Court

 The Supreme People’s Court found that the logo of “采蝶轩” used in Anhui Cake King is the same in word, pronunciation, and meaning as the registered trademark of Zhongshan Caidiexuan, with only different fonts and basically no visual difference. The accused infringing products and services provided and produced by Anhui Cake King infringed the exclusive right to use 6 registered trademarks of Zhongshan Caidiexuan, and Anhui Cake King shall bear corresponding civil liabilities.

After twists and turns, Zhongshan Caidiexuan finally won in the process of rights protection. However, the negligence of Class 35 trademark registration almost failed to prevent an infringer from carrying out imitation infringement, which is really thought provoking. This is also the reason why many companies don’t have business related with Class 35 but have to register trademarks in this class. China’s complex infringement practices, as well as many administrative agencies, and even courts’ misunderstanding of the nature of Class 35, have contributed to the over-registration in this class.

■Conclusion

In conclusion, there are very complicated attributes in Class 35. All kinds of objective reasons have long caused retail companies to struggle with the function of this class,  and unable to have a more comprehensive and deeper understanding. At the same time, the complicated domestic infringement practice often makes enterprises that should not be registered in this class need to pay extra costs for protective registration. Trademark in this class really reflects the complex and complicated Chinese social reality.

Appendix①Tmall Regulation

https://rule.tmall.com/tdetail6153.htm?spm=a223k.10052707.0.0.794ac4239xj47u&tag=self

(The author of the article is Mr. Qian Ming, director of IP Registration Dept, BOB Intellectual Property Service Co., Ltd.)