Protecting Pharmaceutical Brands

Pharmaceutical trademarks are regulated by both the pharmaceutical law and trademark law. Pharmaceutical generic names are prohibited to be registered as trademarks as per Article 11 of the PRC Trademark Law, but only those distinctive pharmaceutical names can be registered as trademarks.

Registration of pharmaceutical trademarks is not mandatory under the current law, but is recommended so as to guard against infringement and squatters. A pharmaceutical name can be used in relation to the product, even if it is not registered as a trademark, however, it cannot be used as a trademark as such.

Registration of Pharmaceutical Trademarks

The registration of pharmaceutical trademarks in China is subject to both pharmaceutical and trademark laws and regulations. Generally, distinctive pharmaceutical names can be registered as trademarks, but general pharmaceutical names, namely pharmaceutical generic names are prohibited to be registered as trademarks as per the absolute prohibition of registration of the goods’ generic names under the Trademark Law.

From the specific legal provisions, Item 1 of Paragraph 1 of Article 11 of the Trademark Law prohibits a generic name of the goods to be registered as a trademark. Generic names refer to the names provided by national and industrial standards, or the conventional names, according to the Trademark Review and Hearing Standard jointly issued by the Trademark Office (CTO) and the Trademark Review and Adjudication Board (TRAB).

Pharmaceuticals are also subject to such constraint referred to in the provisions above. In accordance with Article 50 of the PRC Pharmaceutical Administration Law (2015 amendment), the pharmaceutical names included in the national drug standards are generic names. Those names which have been pharmaceutical generic names shall not be used as pharmaceutical trademarks. Paragraph 2 of Article 32 of the Law indicated that the PRC Pharmacopoeia promulgated by the State Food and Drug Administration (SFDA) and the pharmaceutical standards are national pharmaceutical standards.

Regarding the conventional pharmaceutical generic name, it refers to the name of certain pharmaceutical which has been generally used in the same industry or generally known by relevant public. 

In the case of Lunan Pharmaceutical Group Co., Ltd. (Lunan) vs. TRAB and Chengdu Diao Pharmaceutical Group Co., Ltd. (Diao), Lunan filed an application to register the trademark “Yinhuang” (an abbreviation of honeysuckle flower and scutellaria in Chinese characters) in relation to pharmaceutical preparations in class 5 (Application No.1580496) on 23 March 2000, and this mark was approved to register on 7 June 2001. On 5 June 2006, Diao filed an invalidation action with the TRAB against this mark, based on its prior rights and prohibition of generic names registration. The TRAB made a decision on 19 October 2009 that the Disputed Trademark was maintained. The Beijing No.1 Intermediate People’s Court concluded that “Yinhuang Oral Liquid” (means oral liquid of honeysuckle flower and scutellaria) was a pharmaceutical generic name, but “Yinhuang” was not, since “Yinhuang” was an abbreviation of honeysuckle flower and scutellaria, which meaning was not the same as that of the pharmaceutical names, “Yinhuang Oral Liquid”, “Yinhuang Particles” or “Yinhuang Capsules”. Both Diao and TRAB appealed to the Beijing Municipal Higher People’s Court, regarding the key dispute if “Yinhuang” constituted a pharmaceutical generic name. The Higher Court made the final decision on 10 November 2010 and determined that “Yinhuang” has constituted a conventional generic name of “Yinhuang” type drugs, since “Yinhuang” type drugs had been extensively produced before filing of the Disputed Trademark and relevant public would refer to “Yinhuang” type drugs as “Yinhuang”. 

The other case referring to determination of conventional generic name is Fang Weizhong (Fang) vs. TRAB and Foshan Shunde District Chencun Town Sheng Anna Cosmetics Co., Ltd. (Sheng Anna). In this case, Fang filed an application to register the “Lie Ke Ning” (means cracking could be ok) mark in various goods in class 3 on 9 December 2005. Sheng Anna filed an opposition against the Trademark Application but rejected by the CTO, so it appealed to the TRAB on the grounds that the “Lie Ke Ning” mark merely presented the function and usage of the goods and the mark was a product name in the industry which was generally used by operators, so it was not distinctive, and that Fang did the filing in bad faith, since he had known “Lie Ke Ning” as a product name. The TRAB determined on 11 March 2014 that “Lie Ke Ning” has become a conventional generic name of the skincare product for prevention of chapped skin, and Fang’s use of the mark in relation to floral water, prickly heat powder and talcum powder would cause consumers’ confusion as to contents and function of the goods, so Trademark Application should be rejected. The TRAB’s decision was supported by both Beijing No.1 Intermediate People’s Court and Beijing Municipal Higher People’s Court. The Higher Court concluded on 12 January 2015 that although only those enterprises in some provinces used “Lie Ke Ning” as product name, the product faced to the consumers all over the country, which has established the general use of the generic name. 

The courts usually determine if a disputed mark is a generic name or not, based on the factual status on the date of filing of the mark, in accordance with Article 8 of the Opinions on Several Issues Concerning the Trial of Administrative Cases Involving the Authorization and Determination of Trademark Rights issued by the Supreme People’s Court on 20 April 2010. Specifically, if a mark was not a generic name on the application date, but became a generic name on the registration date, it shall be determined as the generic name. If a mark was a generic name on the application date, but was no longer a generic name on the registration date, the registration should not be blocked. 

The provisions above are applied to the case Shanghai Xingling Technology Pharmaceutical Group Co., Ltd. (Xingling) vs. TRAB and Sun Zhefeng (Sun, a Chinese person). The “Xingling” Trademark No.1416354 was filed by Xingling on 8 February 1999 and registered on 7 July 2000, in relation to various pharmaceuticals in class 5. On 13 May 2004, Sun filed an invalidation action with the TRAB against this mark, on the grounds that the Disputed Trademark was a pharmaceutical generic name. On 14 December 2009, the TRAB decided to maintain the registration of Disputed Trademark in relation to veterinary preparations and medical feed additives, but invalidate it in relation to the other goods. According to the Beijing No.1 Intermediate People’s Court though, if a trademark constituted a generic name usually shall be determined based on the factual status on the date of filing of the mark. In this case, “Xingling Granule” became a Chinese medicine generic name on 16 December 2002 but “Xingling” was applied for registration as a trademark on 8 February 1999 and approved to register on 7 July 2000, when the new medicine name had not been added into the pharmacopoeia, so “Xingling Granule” had not become a pharmaceutical generic name before registration of the Dispute Trademark, and registration of Dispute Trademark did not violate the Trademark Law. Accordingly, the Intermediate Court withdrew the decision issued by the TRAB. Beijing Municipal People’s Court issued a final decision and maintained the Intermediate Court’s decision on 28 February 2011. 

Further, registration of pharmaceutical trademarks need to comply with Items 2 and 3 of Paragraph 1 of Article 11 of the Trademark Law – those pharmaceutical names which consist exclusively of signs or indications that have direct reference to the quality, main raw materials, function, intended purpose, weight, quantity or other characteristics of goods or services, or those which are devoid of any distinctive character, cannot be registered as a trademark. 

In the above-mentioned case, Fang Weizhong (Fang) vs. TRAB and Foshan Shunde District Chencun Town Sheng Anna Cosmetics Co., Ltd. (Sheng Anna), the Higher Court determined that when the consumers saw the “Lie Ke Ning” products with different brands, they would believe “Lie Ke Ning” referred to the cosmetics having the caring or healing function for cracked skin, but could not identify the source of the goods through the mark. The use of the mark would also cause the consumers’ confusion as to function of some of the goods, such as floral water, astringents for cosmetic purposes, cosmetic oil, bath powder and talcum powder, which would cause bad influence.

In the case of Sichuan Diwei Pharmaceutical Co., Ltd. (Diwei) vs. TRAB and Xizang Zhizhi Pharmaceutical Co., Ltd. (Zhizhi), Diwei filed an application with the CTO on 2 August 2004, to register the mark “冰皇夫乐BINGHUANGFULE” in relation to the goods in class 5, including medicines for human purposes and disinfectants, under the Application No.4199801. Zhizhi filed an opposition against this application with the CTO, based on its product name “冰黄肤乐软膏” (Bing Huang Fu Le Ointment) which was listed as a generic name, but the opposition was rejected by the CTO. The TRAB found that “冰黄肤乐” (Bing Huang Fu Le - the pronunciation was the same as “冰皇夫乐”) could be established as a pharmaceutical generic name, the “冰皇夫乐” included in Trademark Application was not a pharmaceutical generic name, but it was the same as the pharmaceutical generic name “冰黄肤乐” in terms of pronunciation, and similar to it in terms of character constitution and overall appearance, and the relevant consumers would not identify it as a trademark due to lack of distinctiveness. Accordingly, the TRAB determined to reject the Trademark Application on 9 October 2013. The TRAB’s decision was maintained by the Beijing No.1 Intermediate People’s Court. The Beijing Municipal Higher People’s Court determined that relevant public would identify the mark included Trademark Application as the name of goods or its main ingredients, and the mark did not have the function of distinguishing the origin of the goods, and the Higher Court supported the TRAB and Intermediate Court in the final decision issued on 24 September 2014. 

Registration of pharmaceutical trademarks is recommended so as to guard against infringement and squatters. According to Leo Pharmaceuticals (Leo) vs. TRAB and Bright Future Pharmaceutical (Bright Future), the registered pharmaceutical product names may not be protected as prior right under the Trademark Law, if no actual use and certain reputation. In this case, Leo filed the application to register the mark PHUDICIN in relation to pharmaceutical preparations, pharmaceutical preparations, medicines for veterinary purposes, and veterinary preparations on 20 June 2006, and this application was registered on 14 September 2009. Bright Future filed an invalidation action against the PHUDICIN registered trademark, based on its PHUDICIN pharmaceutical product name registered with the SFDA respectively in 2005, 2007 and 2009. The TRAB made a decision on 30 December 2011 and concluded that Bright Future enjoyed the prior PHUDICIN pharmaceutical product name right and registered trademark application right, from the SFDA’s approval of use of the PHUDICIN product name in relation to the Fusidie Acid Cream pharmaceuticals produced by it. As the competitor in this area, Leo should have known this, but register PHUDICIN as a trademark, which infringed Bright Future’s prior right, so the Disputed Trademark should be withdrawn. However, this decision was overturned by the courts. Beijing No.1 Intermediate People’s Court concluded that if a pharmaceutical product name was protected under the IP laws would be determined based on reputation of the pharmaceutical product name, whilst Bright Future failed to submit the evidence showing its use of PHUDICIN in relation to its pharmaceuticals within the mainland China before registration of the Disputed Trademark. The SFDA’s approval of pharmaceutical operator’s pharmaceutical name will not cause legal remedies, including civil right protection, so the right to use the pharmaceutical name was not the use right under the civil law, nor the prior right under the Trademark Law. The Intermediate Court withdrew the TRAB’s decision accordingly, and Beijing Higher People’s Court maintained the Intermediate Court’s decision. 

Use of Pharmaceutical Trademarks

In the past, China required a registered trademark to be used in relation to any pharmaceuticals sold in the market. The Pharmaceutical Administration Law 2001 cancelled the mandatory registration of pharmaceutical trademarks. Paragraph 1 of Article 27 of the Provisions on the Administration of Pharmaceutical Directions and Labels issued by the SFDA in 2006 stipulates that it is prohibited to use any unregistered trademark or any other pharmaceutical name not approved by the SFDA in pharmaceutical directions and labels. This means, a pharmaceutical name cannot be used as a trademark, if it is not registered as a trademark. Paragraph 2 of Article 27 further states where a pharmaceutical label uses a registered trademark, the said trademark shall be printed at the border corner of the pharmaceutical label. If any words are included, the average character area size shall not be larger than one fourth of that of the generic name.

In the case of Wuhan Sanchu Technology Development Co., Ltd. (Sanchu) vs. CTO, the Trademark “Dinggui” (an abbreviation of cloves and cinnamon in Chinese characters) No.3248395 was registered by Shanxi Yabao Pharmaceutical Group Co., Ltd. (Yabao) in relation to the goods, tablets, patches and creams in class 5. Yabao filed a complaint with the Wuhan Municipal Administration for Industry and Commerce (AIC) that Sanchu used the characters “Dinggui Bao” (Bao means treasure) and “Dinggui Jiang” (Jiang means ginger) in relation to the “diarrhea pastes” for children produced by Sanchu and also marked “TM” at the top right, which infringed Yabao’s exclusive right to use its registered mark. To determine the nature exactly, Hubei provincial AIC asked the State Administration for Industry and Commerce for instructions on 31 October 2006, regarding if the mark “Dinggui Bao” infringed the exclusive right to use the registered mark “Dinggui”. On 27 January 2006, the CTO issued a reply that “Dinggui Er Umbilical Paste” was a Chinese medicine product name approve by the SFDA (No. B20020882), and cloves and cinnamon, among others, are the ingredients of this medicine. According to the Chinese medicine naming rules, compound Chinese medicine could be named by the abbreviation of the main ingredients, so the registrant of “Dinggui” was not entitled to prohibit the others to use the medicine names including the characters “Dinggui” in relation to the medicines containing the ingredients cloves and cinnamon, as long as it was used to illustrate the medicinal ingredients. However, Sanchu’s use of “Dinggui Bao” and “Dinggui Jiang” as trademarks constituted infringements. Sanchu appealed to the SAIC, Beijing No.1 Intermediate People’s Court and Beijing Municipal Higher People’s Court, but the CTO’s reply was supported by all of them. The final decision was issued by the Higher Court on 19 June 2007. 

In the case of Japanese Taiko Pharmaceutical Co., Ltd. vs. Shenzhen Longgang District Xin Teyao Co., Ltd., Taiko filed a complaint with Shenzhen Municipal AIC, regarding Xin Teyao’s sales of “He Quan” strong seirogan infringed its exclusive right to use its registered trademark “Zheng Lu” (seirogan in Chinese characters) in relation to pills. Through investigation, Shenzhen Municipal AIC found that “He Quan” seirogan was the same as the “Zheng Lu” mark in terms of design and layout, and on the packaging of “He Quan” seirogan, “Zheng Lu” was highlighted. It is clear that consumers would refer it as “Zheng Lu (Seirogn)” instead of “He Quan Strong Seirogn” and be confused as to source of the goods. Thus, the AIC concluded that Xin Teyao’s act constituted trademark infringement.

Conclusion

For pharmaceutical companies, it is necessary to register their pharmaceutical names as trademarks, which is very favorable for them to combat infringement, obtain compensation, and maintain their corporate interests. And also, it’s necessary for them to prevent their pharmaceutical trademarks from general use and dilution, through unique design and functional use.