Acceptance Notifications of Foreign Language Trademarks are No Longer Available for Cosmetic Filing in China

Recently, several cosmetic companies in Guangzhou have reported that their products failed the filing technical review. The use of unqualified trademarks was a major contributor to post-market inspection failure. The product review comments offered by the Guangzhou Medical Products Administration (Guangzhou MPA) are as follows:

“The product name does not conform to the requirements under the Regulations on Naming of Cosmetics. No explanation is provided for the use of foreign languages and numbers other than the registered trademark in the product name. Only the registered trademark (“R” mark) of the English trademark can appear in the applied name and label, the trademark acceptance notification (“TM” mark) is insufficient for filing."

The feedback signalizes that Guangzhou MPA has tightened the review requirements of filing. At present, cosmetic products whose names contain foreign languages are only allowed to conduct filing with obtained the trademark registration certificate rather than the Acceptance Notification on the Application for Registration of Trademark (Acceptance Notification).

Compliance Requirements for Cosmetic Trademarks

Trademark is a distinctive sign or word used for identifying and distinguishing the source of products or services. In fact, the above regulatory requirements have been expressively stipulated in Article 5 of China's Regulations on Naming of Cosmetics.

The GB 5296.3-2008 Instructions for the Use of Consumer Products-General Labelling for Cosmetics also specified that "Character of the label, except for those on the trademark, must be formal Chinese." Non-Chinese trademarks (foreign language, symbols, numbers, and their combination) should provide the trademark registration certificate, and the original meaning of the mark should be explained on the product label.

However, these regulations have not been strictly enforced before. Many companies filed their products as soon as obtaining acceptance notifications (only received "TM" mark) of foreign language trademarks to accelerate time-to-market, which is forbidden now.

“TM” Mark vs. “R” Mark

In China, the registration process of a trademark takes about a year or two. During the period, it generally appears in one of the following two states.

1. "TM," the abbreviation of trademark, is an indicator that China’s Trademark Office has accepted the registration application of a trademark and issued an electronic Acceptance Notification. Then the trademark will enter into the publicity period. Notably, the TM mark only indicates that the trademark is still in the process of registration, and it has no legal meaning and legal effect.

2.  "R" refers to a registered trademark, which has passed the Trademark Office's examination and gone through the publicity period. It enjoys monopolies, exclusive rights, and privileges. No enterprise or individual can use the registered trademark without the holder’s permission or authorization. Otherwise, it may constitute trademark infringement, and the infringers will be subject to serious legal trouble.

Significant Impacts

• Filing efficiency

The enhanced supervision on trademark will undoubtedly be a substantial blow to the cosmetic industry since many pending filing applications use trademark acceptance notifications rather than trademark certificates. Due to the verification and publicity period of trademark registration is time-consuming, the necessity of providing registration certificate will reduce the efficiency of cosmetic filing to a certain extent and will accordingly result in the delay of listing.

• Imported cosmetic business

Moreover, it is noteworthy that China adopts the “first-to-file” system for trademark registration, meaning that the person/enterprises who register a trademark first will acquire inarguable sole rights of the mark in China, regardless of creation or use by other entities.

Although there is a number of domestic cosmetic brands that use foreign language trademarks, Guangzhou MPA’s requirement is not a big challenge, given they generally register trademarks in China first.

But for the imported cosmetic sector, the impacts are tremendous as the trademarks are conventionally registered abroad. If there is no registered Chinese version of the trademark or if it is registered by different business owners first in China, the import filing will be significantly affected, and foreign enterprises may face the situation where they are forced to change the product name so as to pass the filing, which will impose adverse influences on brand promotion and product marketing.

Advice for Stakeholders

In a time of increasingly stringent supervision over the cosmetic trademark, international brands interested in the Chinese market shall also consider trademark factors in the future product layout. Both the foreign language and Chinese version of the trademark are recommended to be registered before entering into the market, to diminish the risk of preemptive trademark registration (trademark squatting) by others.

Additionally, the administration regions where the regulatory requirements for filing have been strengthened are not confined to Guangzhou. In response to National Medical Products Administration’s announcement on stepping up supervision over cosmetics, all local branches are pledged to enforce the filing regulations of non-special use cosmetics strictly. At present, most regions of the country, such as Beijing and Shanghai, have reinforced the management of trademark registration certificates. Therefore, cosmetic enterprises shall work out corresponding countermeasures as soon as possible to minimize losses.