“Greenwashing” may be causing registration difficulties for green trademarks in China

In recent years, there has been a surge in demand for products that are sustainable and eco- friendly. This tendency is reflected in the increase of green trademarks, which highly discourage any act that may lead to pollution, or may harm the environment in any way possible.

However, this trend has been responsible for a practice called “greenwashing”, which refers to a company that provides false or misleading information about their products being eco-friendly to gain market share. The use of words such as “green”, “eco” and “sustainable” to describe products that are not environment-friendly are a form of greenwashing.

Green trademarks are eligible for registration under trademark as they can be graphically represented and have goods and services which can be distinguished from other registered brands. Green marks used by companies give them a way of advertising and promising consumers to provide 100% organic and biodegradable products which are free from causing any harm to the environment.

A few countries, such as the European Union, United States and China, accept the registration of green trademarks. But in China, lately, companies interested in registering green trademarks have been encountering difficulties and facing the rejection of their applications.

China’s Trademark Law prohibits the registration of deceptive trademarks. A trademark that greenwashes the underlying products can be considered fraudulent. Analysts speculate that these rejections have something to do with China’s concerns over greenwashing.

Contrary to the practice in the United States, the China National Intellectual Property Administration (CNIPA) does not publish the notices it issues regarding specific trademark applications. In any case, notices to applicants tend to be somewhat terse, often leaving them to read between the lines. As a result, the motivations behind the rejections of specific applications to register green trademarks cannot be confirmed.

In the United States, the US Patent and Trademark Office (USPTO), is explicitly expressing its concerns over greenwashing. In some applications to register green trademarks, USPTO has required a disclaimer of the relevant terms, on deceptiveness grounds. Unfortunately, disclaimers are not an option in China, where an outright refusal is the most common outcome.

The US regulates greenwashing in three ways: under the Lanham Act, which talks about unfair competition and false advertising, through the Federal Trade Commission or the public enforcement action, which is taken by the attorney general, and through the Theory of Liability for false advertising, which is claimed under the state laws.

Similar to the guidance released by the EU, the Federal Trade Commission published the green guidelines to regulate greenwashing and green trademarks. It was published for the traders to avoid consumer deception and give directions on the general claim of environment benefits.

In China, brands that are in fact eco-friendly can appeal their application rejection, presenting evidence of the sustainability of their products. However, demonstrating planet-friendliness may not be feasible or enough, because in general the CNIPA is not that open to substantive arguments over refusal grounds.

A possible solution could be for brands that have not yet committed to green trademarks, to consider different names, and those that have already committed to re-evaluate their approach. If they are looking to enter the Chinese market, they can consider using a different name in China or focusing on their Chinese-language branding. They can also try to register the graphic elements of their trademarks, such as logos.

Green trademarks play a significant role in environmental protection. Though some of them may not be registered as such in China due to the descriptive nature of the words used for the products, they can try an alternative strategy that indicates the quality of the product.

Consumers should be able to rely on companies that manufacture real eco-friendly goods and promote sustainable development.

---

Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.

Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.

---

Talk to an expert

Schedule a 30-mins complimentary, no-obligation call to see how Woodburn can help you. Book a call with our Head of Business Advisory - Kristina Koehler-Coluccia.

Topics we can advise on include:

• Company Registration

• Cloud Accounting & Financial Reporting

• Cloud Payroll Services

• Tax & Audit Services

• Recruitment

• Employer-of-Record

• Visa Application

• Trademark Registration

• Switch to Woodburn

• Partner with Woodburn (cross referral) 
  

Our calls are automatically scheduled via Zoom - or via Teams, WeChat or WhatsApp upon direct request. 

Our advisory calls are available from Monday-Friday from 8am to 5pm CEST and Wednesday until 9pm CEST.