Trademarking in China – what you need to know…
The trademark system in China is very different to other countries as it operates on a “first to file” system as opposed to “first to use”. This system means that the first person to file the trademark is its rightful owner. Once someone else owns your trademark, they can take legal action against you to stop you using it, or, even make you pay to use it!
This “first to file” system is the main reason why so many Western brands have issues surrounding their IP in China . “Trademark squatters”, those who own, but don’t necessarily use their trademarks, are prevalent. It is also common for import companies to register the trademarks of the brands they are importing, often unbeknownst to the brand owners.
If foreign companies want protection in China, they must be the first to register their trademarks, ideally doing this in advance of starting business in the territory. The reality, however, is that many fail to do this, and often discover further down the track, that their trademarks are in fact owned by someone else. Or that a similar mark has been registered, precluding their ability to register their own mark. Navigating around these complications is time consuming and costly, thus it is far better to take active steps to avoid these situations in the first place.
With our extensive experience of trademarking in China, here is our step-by-step guide to getting it right:
1. Step 1: Is your trademark available?
The China Trademark Office provides a free online search tool at http://wsjs.saic.gov.cn where you can quickly check if your brand is registered in category 32 (beer products) or category 33 (wine and other alcohols). If you already have one, also check whether your Chinese name is registered. If you don’t, the creation and subsequent registration of a strong Chinese brand name should be considered as an essential part of your overall branding and IP protection process in China.
Tip: Check not only whether your exact brand name has been registered, but also for similar brand names that could potentially hamper successful registration.
Upon checking, you will be faced with the following options:
a. The trademark is free to file.
You are lucky, and would be strongly advised to register your brand as soon as possible (registering a new trademark takes at least a year!), preferably using a local trademark lawyer whose fees will be significantly lower than using an international law firm.
b. The trademark has already been registered and (unfortunately) is actively being used to sell a product under that name.
It is unlikely, if the mark is being used, that you will ever be able to register your trademark. If you really want to keep the same brand name in China you can try making an offer to the owner of the trademark. This should be done anonymously and will usually incur very high costs. Your only alternative, if you are unable to buy back the trademark, is to rebrand for the Chinese market.
c. The trademark has already been registered but is not in use
If the trademark has been registered but there is no obvious signs that it is actively being used, you may be able to file against the owner for non-use. Again, the process is a long one (12-18 months) and can be tricky to navigate. We would always advise working with a good local lawyer and filing the case anonymously. Once the trademark is free to file again, you can apply to register.
2. Step 2: Who should take care of the registration?
In short, you should! When contemplating exporting your products to China, you should always avoid having a third party, such as your importer, registering your trademarks on your behalf. This will ensure the marks are legally registered in your name and not theirs. If an importer owns your trademark, they effectively own your brand and will you lose the right to control how your brand is sold and marketed in China. We strongly advise engaging an experienced Chinese trademark lawyer to register your trademarks.
3. Step 3: What should I register?
Anything that you consider to be part of your IP. This will, at a minimum, include your brand names, both Latin-characters and Chinese, and likely also your logo. It should also include any sub-brands and proprietary marks, again, both in Latin-characters and Chinese. The importance of creating and registering a strong Chinese name is even more important in China than registering the Latin name as this is the name by which your brand will become known.
Creating a strong Chinese brand name takes time and effort. At Nimbility we do this for our brands adhering as far as possible to the following criteria:
a. Number of characters should be less or equal to three. More than 3 characters is generally not recommended as it makes it harder to recognize and memorize the brand name.
b. Combination of translational and phonetic is ideal but not easy to come up with and requires Chinese language experts. Ariana Grande’s recent and unfortunate tattoo mistake is evidence of how tricky it can be to translate a language you don’t speak…!
c. Prevent any offensive words
d. Design a combination that isn’t already registered with the China Trademark Office. As most of the commonly used characters which have positive meanings already have many similar records trademarked, sometimes we need to compromise and think creatively to ensure a successful registration.
4. Step 4: What category should I register in?
China divides trademarks goods and services into 45 classes and further subclasses. A trade mark gives exclusive rights only in connection with the registered goods or services. For example, a trade mark registration for wine (which falls into class 33) would not provide protection for bar services (which falls in class 43). Consider registering defensively with respect to any goods or services you want to prevent others from using. A trade mark is registered for 10 years from the registration date, and can be renewed indefinitely. However a trade mark is vulnerable to cancellation for non-use if it is not used for a period of three years from registration.
5. Step 5: Where should I register?
Mainland China, Hong Kong, Macau and Taiwan all have separate legal systems thus protection in each territory requires separate registration. The “first to file” system in Mainland China, however, makes registering your IP here a definite priority.
For more information about trademarks in China, please contact firstname.lastname@example.org