China TrademarksOne of the more distinctive aspects of China’s trademark system is its unique interpretation of the Nice Classification system. China divides each Nice class into subclasses, and treats each subclass as a discrete unit. A trademark registration gives the owner rights in the covered subclasses, but virtually no rights in any other subclasses. (For further discussion of this feature, see China Trademarks. Register Them in China not Madrid.)

I was thinking about this the other day when I read about the U.S. trademark dispute between Dr. Pepper Snapple Group, which currently owns the Crush line of beverages, and the Denver Broncos football team, which currently owns the Lombardi Trophy. The Broncos filed an application to use “Orange Crush” on (1) shirts, caps, and sweatshirts (Class 25 goods) and (2) football-related education and entertainment services (Class 41 services). Dr. Pepper was not happy about this, and in a brief filed on May 31 with the USPTO, argued that their various “Crush” marks have such strong common law rights that allowing the Broncos’ application would dilute the Crush brand and cause consumer confusion.

Dr. Pepper Snapple should be grateful that they’re not in China, where their opposition would be dead on arrival. China is not a common law country and does not recognize common law rights to trademarks. The way to get trademark rights in China is to file a trademark application in the classes (and subclasses) that you want covered. The main exception is for well-known trademarks, but it is extremely difficult to prove you have a well-known trademark.

I just checked and right now no one owns the rights to “Orange Crush” in China in any category. The Denver Broncos could file the same applications they filed in the US and Dr. Pepper couldn’t do a thing about it. (The Broncos might face opposition from other rights holders, like the Shanghai trading company that has registered “Crush” in Class 25, but that’s a different matter.) Then again, if some random person files an application tomorrow for “Orange Crush” in Class 41, the Broncos couldn’t do a thing about that either.

If I were advising the Broncos, I would tell them that if they have designs on using “Orange Crush” in China as part of their long-term branding strategy, they should run, not walk to the CTMO and file China trademark applications for “Orange Crush” in a variety of classes. And I would give the same advice to Dr. Pepper regarding “Crush” (and maybe “Orange Crush” as well, if it’s that important to them). It’s no mystery why companies like Starbucks and Disney have started registering their most important trademarks in every single class and subclass in China. After spending years railing against the idiosyncrasies of the Chinese trademark system, these companies are finally using them to their advantage. The only mystery is why more companies aren’t following suit.

But maybe ignoring China is a calculated move by the Broncos and Dr. Pepper, since everyone knows Tang is the orange drink of choice there.