For years, international brands registered in China had to deal with “similar” brands of local products, listed under a related but different category, making it almost impossible to fight in the Chinese court system. But a recent ruling of the Supreme Court determined that if there is the likelihood of confusion, the registration of the disputed trademark should not be valid.
To determine if there is the likelihood of confusion, factors such as the similarity of trademark signs, the similarity of goods, the distinctiveness and reputation of the cited trademark, the attention of the relevant public, the subjective intention of the trademark applicant and the evidence of actual confusion should be considered.
According to the China Trademark Law, where a trademark applied for registration is identical with or similar to a trademark already registered or preliminarily approved by others for the same or similar goods, it shall be rejected.
It is important to establish if the goods or services filed by a later trademark are identical or similar to the goods or services of the prior trademark. The Official Classification of Similar Goods and Services adopted by the China Trademark Office is the basic criteria for the examiners to apply in their work of trademark examination.
In general, the courts pay more attention to the reality of the market, focusing on the analysis and comparison of the physical and social attributes of the goods or services themselves.
However, the Official Classification of Similar Goods and Services is the basic standard to apply.
The determination of similar goods or services is essentially a legal issue to define the scope of protection of trademark right. To do so, one must consider the distinctiveness of the trademark claimed to be protected, whether it has been used and has a certain market popularity, and whether the applicant of disputed trademark has the intention of unfair competition.
There are certain circumstances where the general rule does not apply. A famous trademark can obtain cross-class protection on non-identical and dissimilar goods, while a registered regular trademark can only obtain protection on its registered goods/service.
This goes as well for goods that are considered similar, though they belong to different classes or subclasses, and are not considered similar goods per the general rule, the trademarks involved are usually highly similar, and the disputed trademark is a close imitation or even a copy of the cited trademark, and the goods themselves are also closely relevant.
The relevance of goods is usually defined in each case under special scenario, viewing the relevance or overlapping in terms of uses, functions, and sales channels, among other.
Being copied is a real problem in China. It is extremely frustrating to see a copy of your product in the market. The Chinese paradox could be described as follow: The fast development of intellectual property law offers legal protections, but a high level of counterfeiting and piracy activities is still prevalent.
For this reason, many businesses are reluctant to face the potential infringement of IP rights and dilution of their brands by expanding into China. In a country where counterfeit, fake brands and fake products are proliferating, startups and foreign businesses will have to invest in risk management measures and trademark protection to operate in the best conditions possible.
For brand protection, a company will have to fill in a trademark application both in Chinese and in English, carefully choosing the product categories and sub-categories if needed.
It is important to investigate the China trademark database (available online) for similar or the same trademark examples filed by competitors and infringers (even in categories outside a company’s core products).
Another possibility is to consider changing the brand, so that it does not create any problems with similar trademarks. This rebranding can be China-specific. For example, if your main brand identifier on products is the brand name, in China you can consider using your Chinese name. Coke does this.
Giving your Chinese name prominence in your branding will also help shape your brand’s identity in China. If you don’t choose a Chinese name, or if you choose one but don’t make it a part of your identity, consumers will fill that gap.
This in turn could complicate brand protection efforts. For instance, a squatter or bad-faith competitor could register the Chinese name most popular with the public before you have a chance to do so.
To learn more about our services in China, contact our Head of Business Advisory - Ms. Kristina Koehler-Coluccia at kristina@woodburnglobal.com.
DISCLAIMER: All information in this article is verified to the best of our ability and is assumed to be correct at time of release; however, Woodburn Accountants & Advisors does not accept responsibility for any losses arising from reliance on the information provided within. The information provided is for general guidance and does not replace specialized advice.