(By Luo Yanjie) Abstract: A subsequently applied trademark must not be identical with or similar to a prior trademark. The trademark submitted for registration must have sufficient characteristics that allow it to be distinguishable. A few days ago, foreign media outlets reported that Audi had filed several trademarks application for model names, including SQ2, SQ4 and Q9. This is a sign that these vehicles will likely be sold in China in the future.

According to our research, further information about those trademarks is not yet available in Mainland China. This is likely either because Audi has not started the application procedures, or because the Trademark Office has not yet input Audi’s application information online. However, this does not affect our analysis on the outlook of those trademarks in mainland China.

1.      The principle of “first to file” does not cause too much trouble.

Article 28 of the Trademark Law stipulates that, where a trademark application does not comply with the relevant provisions in this law or is identical with or similar to a registered trademark used in connection with the same or similar goods, its registration shall be refused by the Trademark Office after examination and the mark shall not be published. These are the provisions eschewing the principle of “first to file”, meaning a subsequent applied for trademark must not be identical with or similar to a prior applied trademark. Whether Audi could succeed in applying these trademarks in China relies on a core factor of whether there is a preceding trademark application.

According to our preliminary research, currently no complete prior trademarks have been filed which are identical to the above-mentioned trademarks. Furthermore, there is a lesser chance of similar trademarks because these trademarks themselves are very simple. For these reasons, if Audi attempts to apply these trademarks in China, the principle of “first to file” won’t be much of an impediment. However，we can’t exclude the possibility that either the six-month delay in the trademark database of the Trademark Office or additional similarities with other prior trademarks might negatively influence the outcome of the application.

2.      The simple composition itself of these trademarks may lead to the failure of their registration.

Article 9 of the Trademark Law stipulates that, a trademark seeking registration must have sufficient characteristics so as to be distinguishable. This means, a trademark must be distinctive, i.e., a mark shall have divisional function so that relevant publics could use this mark to differentiate the source of goods. The Trademark Law  also list several indistinct circumstances where a trademark cannot be registered, such as marks that merely indicate principal raw materials or the function of the goods in respect of which the marks are used. Another circumstance is that a mark itself cannot be too simple, such as a simple geometric figure, number or sign. These simple marks are so common as to make it difficult to identify the source of goods.

These marks of which Audi is seeking registration could face this problem. Considering these marks, including SQ2, SQ4 and Q9, are a simple combination of letters and numbers, it could perhaps easily be judged as lacking sufficient distinguishing elements by the Trademark Office. According to the previous cases of Audi seeking registration of similar trademarks in China, the potential risk is not small (our previous posts for reference: Why did the Trademark Office Reject Audi’s “A4” Trademark Application and Why could China’s Courts Decide for Audi’s “TT” to Apply for a Trademark? ).

A prescient warning to foreign-invested companies like Audi is that there is a serious trademark squatting in China and a rather complicated judgment standard for trademark examination. However, using today’s circumstances as an example, if a proper strategy is taken, it is not impossible to obtain such a trademark registration. Therefore, we would like to remind all companies of the importance of obtaining professional consultation on relevant legal issues before applying for trademarks, so as to avoid wasting significant human and financial resources.

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