By Xiaoxue Xiang
When walking into a supermarket, have you ever been drawn to products labeled with phrases like “Farm Fresh Eggs” or “Double Nutrition Cereal”? What if these seemingly straightforward descriptions are registered trademarks, giving companies a "legal disguise" to mislead consumers?
Recently, several trademark misuse cases in China have raised eyebrows: although the businesses held official trademark registrations, their marketing practices crossed legal lines.
So, what legal risks lie behind this “wordplay” in trademark use?
How Misused Trademarks Confuse Consumers
A trademark should uniquely identify a business, but some companies have distorted this function, using trademarks as tools to blur the truth about their products. Some deliberately register highly descriptive words such as “Freshly Squeezed” or “Handmade” as trademarks. Then, by using larger fonts or eye-catching colors, they make consumers believe the terms describe actual product qualities.
Two recent examples:
- A company registered the mark “德子土” (Dé Zi Tǔ ) and promoted its products as “德子土鸡” (Dé Zi Tǔ Jī, Dezi Free-range Chicken). Many consumers assumed the chicken was truly free-range (“土鸡” being a term associated with higher quality and traditional farming), but it turned out “德子土” was a registered brand name, not a description of the chicken’s origin or quality. Regulators fined the company for misleading advertising.
A noodle company sold a product called “多半袋面,” which translates roughly to “More than Half a Bag of Noodles.” The term “多半” (duō bàn) implies “more than half” in everyday Chinese.“多半” was actually a registered trademark, not a literal description. But consumers thought they were getting significantly more noodles. When complaints rolled in, the company stopped selling that version.
A Multi-Law Approach to Curb Trademark Misuse
In China, trademark use is far from “free upon registration.” The Trademark Law clearly defines boundaries: trademarks must be distinctive and cannot be deceptive or merely descriptive, unless they’ve gained "secondary meaning" through prolonged use. This means that even a registered trademark is illegal if it misleads consumers about a product’s characteristics.
Moreover, China’s Anti-Unfair Competition Law, Advertising Law, and Consumer Rights Protection Law jointly form a robust legal framework:
- The Anti-Unfair Competition Law prohibits ads that mislead consumers about product quality or origin.
- The Advertising Law broadly defines false advertising: any misleading element, from trademarks to packaging design, may trigger enforcement.
- The Consumer Rights Protection Law acts as a safety net, ensuring deceptive business practices face consequences.
Together, these laws provide comprehensive deterrence against trademark misuse.
The High Cost of Legal Liability
Companies misusing registered trademarks face more than public backlash: they risk severe legal consequences. Under Article 44 of the Trademark Law, trademarks obtained through deceptive means, or lacking distinctiveness while misleading in use, can be cancelled. Repeat violations may result in trademarks being declared invalid, wiping out years of brand-building.
Further, companies could face administrative penalties and fines up to several times the illegal earnings. In extreme cases, criminal liability may apply.
Authentic Content ≠ Lawful Use
A common misconception among companies is that if the product is indeed as described, using those terms as a trademark must be legal. But consider a business that sells free-range chickens and registers “Free Range” as its trademark. If it places this trademark next to product images on the packaging, consumers may misread “Free Range” not as a brand name, but as a product claim.
This confusion is exactly what Chinese law aims to prevent.
In China, trademark compliance is judged using a “reasonable consumer perception” standard. Even if the product meets the implied quality, if the trademark’s presentation leads consumers to conflate brand name with product attributes, it could still be ruled misleading.
For example, if a company registers “High Calcium” as a trademark but fails to list calcium content on the packaging, the mere implication of a nutritional advantage, despite actual calcium presence, could violate advertising laws.
This regulatory logic aims to uphold market integrity. Letting trademarks blur the line between branding and product claims would encourage unfair competition and erode public trust. Trademarks should clearly identify the source of a product or service, not serve as a marketing trick.
Compliance Tips for Businesses
Strategic Considerations During Registration
Avoid “edge-ball” tactics during trademark application. Steer clear of generic or highly descriptive terms. Consider engaging professionals for clearance searches and legal risk analysis to ensure distinctiveness and compliance from the start.
Honest and Accurate Marketing
When using registered trademarks in advertisements, ensure the claims align with the product’s actual attributes. If your trademark includes terms like “Low Fat” or “High Fiber,” make sure the product is certified accordingly and disclose the relevant data on the packaging.
Build Cross-Department Compliance Collaboration
Legal, marketing, and product teams should maintain regular coordination. Marketing campaigns should undergo legal vetting, and trademark use should be evaluated at the R&D stage. This end-to-end compliance approach prevents regulatory breaches caused by internal silos.
Understand What the ® Symbol Means
The ® symbol only confirms a trademark’s registration. It does not legitimize misleading advertising. Real brand protection comes from honest marketing, not relying on a trademark certificate as a shield.
Avoid “Trademark Disguises”
If your trademark implies certain product attributes, ensure the product genuinely meets them. Otherwise, you risk administrative action or having the trademark revoked for misuse.
Final Thoughts: Integrity Builds Brands, and Trust Wins Markets
In the race for consumer attention, flashy marketing might win clicks but sincerity wins loyalty. A trademark is not a clever wordplay or a loophole to avoid regulations; it is a trust contract between a brand and its audience, representing the company’s commitment to quality and service.
By holding fast to integrity and letting trademarks return to their essential function (i.e. identifying the source of goods or services) companies will not only avoid legal pitfalls but also earn the lasting goodwill that drives long-term growth.