Anticompetitive effect of drug name trademark registration: lessons from China

Trademark registration of generic names is a complex issue in trademark law because generic terms denote product categories open to all, whereas trademarks confer private rights. Internationally, generic terms are widely understood as incapable of indicating source and thus lack distinctiveness. While distinctiveness can sometimes be acquired by use for descriptive terms, generic terms are different and cannot gain distinctiveness. Nevertheless, under the Chinese Trademark Law (CTML) a drug name listed in the National Drug Standards may be registered as a trademark if it has acquired distinctiveness by use and is easily recognizable—an approach that diverges from international standards that categorically exclude generic terms from trademark protection. The paper investigates recent Chinese cases concerning drug names in the National Drug Standards—such as SanLieTong, BaBaoDan, Pian-ZaiHuang, GangTai—highlighting divergent judicial interpretations on whether such names can be registered, under what conditions, and how the fair use doctrine applies. The research question centers on the permissibility and consequences of registering drug names included in the National Drug Standards, and whether fair use can balance stakeholders’ interests. The study argues, given the peculiarities of the pharmaceutical sector, that trademark registration of these drug names should be prohibited to correct competitive imbalances and protect public health. It also provides a comparative perspective for other jurisdictions. The article is organized by first outlining the legislative evolution under the CTML and China’s Drug Administration Law (CDAL) and their inconsistency with international standards; then analyzing court opinions and case reflections; followed by a rationale for prohibiting registration; and ending with discussion and conclusions.

The study employs doctrinal legal analysis and comparative methods. It: (1) traces the legislative evolution of the Chinese Trademark Law (CTML) and the Drug Administration Law (CDAL) regarding the registrability of generic names and drug names; (2) conducts case analysis of prominent disputes involving drug names listed in the National Drug Standards (e.g., SanLieTong, BaBaoDan, Pian-ZaiHuang, GangTai, YuPingFeng, YinHuang), examining courts’ reasoning on distinctiveness, genericness, and fair use; (3) compares Chinese rules and practices with international standards and foreign laws (e.g., the U.S. Lanham Act, Japan and Korea’s trademark laws, and WHO INN policy); and (4) evaluates the competitive and public health implications of permitting registration, including interplay between CTML and CDAL obligations and the operation of the fair use defense.

• CTML permits registration of signs bearing generic names if they have acquired distinctiveness through use and are easily recognizable, creating a pathway to register drug names from the National Drug Standards—contrary to widely accepted international norms that generic terms are unregistrable.
• CDAL treats drug names listed in the National Drug Standards as statutory generic names and prohibits their use as trademarks, creating tension with CTML’s allowance for acquired distinctiveness.
• Courts diverge on whether names in the National Drug Standards are per se generic: some decisions maintain registrations (e.g., BaBaoDan, YiMaDaZheng, GangTai) by emphasizing source-identifying use and non-generalization (often where a single enterprise is the sole provider), while others reject or revoke (e.g., YuPingFeng, YinHuang) applying a guiding concept of “listed in National Drug Standards + generalized use.”
• Two judicial approaches emerge: (1) “pending” view—listing alone does not conclusively prove genericness if the mark indicates source and is not generalized; (2) “affirmation” view—listing establishes statutory genericness irrespective of generalization.
• Fair use has been applied to mitigate infringement risk where drug name trademarks exist (e.g., BaiLing, YiMaDaZheng), allowing others to use the name descriptively. However, this remedy does not durably balance interests, as it both undermines trademark distinctiveness (risk of dilution) and maintains legal uncertainty for competitors.
• Allowing trademark registration of drug names can create anticompetitive effects: conflicts between mandatory CDAL labeling of generic names and CTML exclusive rights deter market entry, risk perpetual monopolization (since trademarks can last indefinitely), impede development of generics, and may harm patient access and welfare.
• International frameworks (Paris Convention, TRIPS) and major jurisdictions distinguish descriptive from generic terms and generally preclude registration of generic terms; INN policy prohibits trademarks derived from INNs, aligning with a strict non-proprietary naming regime.

The findings show that CTML’s allowance for acquired distinctiveness blurs the line between trademarks and generic names in the drug domain, conflicting with CDAL’s statutory generic naming system and international norms. Courts’ reliance on source-identifying use and lack of generalization to uphold registrations substitutes a trademark-centric logic for a public health–oriented regulatory logic. This threatens the stability and authority of generic drug names and creates regulatory contradictions: CDAL mandates prominent display of generic names on labels, while CTML may treat the same names as exclusive trademarks, exposing compliant operators to infringement risk. The study argues that generic names, unlike descriptive signs, cannot acquire distinctiveness through use because their function is to denote a category, not source. To realign with international standards, protect competition, and safeguard public health, the authors propose prohibiting trademark registration of drug names listed in the National Drug Standards. This would preserve free use necessary for generic drug competition, avoid de facto perpetual monopolies post-patent, and reduce confusion risks. While fair use offers short-term relief, it erodes trademark distinctiveness and does not resolve structural conflicts; a clearer ex ante rule—prohibiting registration—better balances interests of trademark owners, competitors, and patients. The authors further propose an administrative pathway to change a drug’s generic name before any trademark registration, allowing subsequent, stable trademark protection of non-generic signs without jeopardizing the generic naming system.

The paper contributes by clarifying the conflict between CTML’s permissive approach to acquired distinctiveness for generic names and CDAL’s statutory generic naming regime, demonstrating anticompetitive risks and public health implications of registering drug names listed in the National Drug Standards. It recommends: (1) explicitly prohibiting trademark registration of such drug names; (2) maintaining a strict distinction between generic names and trademarks aligned with INN-like principles; and (3) creating an administrative procedure allowing manufacturers to change a drug’s generic name before seeking trademark registration, restoring stable trademark protection without undermining the public domain. Future research should deepen empirical and economic analysis of anticompetitive effects and explore comparative institutional differences across jurisdictions to refine policy design.

• The study lacks quantitative, economics-based measurement of anticompetitive effects of registering generic drug names; incorporating empirical analysis would strengthen the legislative case.
• Legal and market institutions vary across countries, limiting generalizability; careful, jurisdiction-specific definitions and tests for genericness are necessary.
• Risks of misidentifying generic names could harm trademark rights or public interests; clearer standards are needed to avoid erroneous classification.