China is the second largest economy in the world, with a vast consumer base, making it an attractive destination for businesses seeking to expand globally. With the rise of cross-border e-commerce and globalization, trademark registration in China has become increasingly important.
Companies may face devastating consequences, including loss of revenue, reputational damage, and legal disputes, if they do not register their trademarks. Understanding and implementing effective solutions against challenges such as trademark squatting is crucial for businesses operating in or entering the Chinese market.
A company’s identity is one of its most valuable assets. Customers recognize and trust a brand’s reputation, which can significantly impact the success of the business. Protecting the integrity and exclusivity of a brand must be a constant priority for a company, especially in this current highly competitive market.
To obtain protection in China, a company must register its brand with the China Trademark Office (CTMO) either by directly filing a domestic application or by filing an international extension through the Madrid System.
Trademark search
Before registering a brand in China, a company must check that it is available and has not been previously registered by another entity (known as a ‘bad-faith’ registration), or is too similar to any other registered trademark. This step saves resources on an application which will be rejected and could delay business operations in China.
Trademark agents can conduct a search on a company’s behalf, but individuals can also do it themselves on the CTMO online database which records all trademarks applied for and registered in China. The database is available in English and is free to use.
If your trademark is in the database, it means that it was probably registered in ‘bad-faith’ and is now effectively owned in China by someone else.
At this point, if it is still during the three-month period between the bad-faith registration of your trademark being published in the Trademark Gazette and the trademark being granted, you can file an opposition with CTMO.
If the trademark has already been registered, you may be able to have the registration invalidated by filing a case with the Trademark Review and Adjudication Board (TRAB). The chance of success will depend on the specifics of the case.
Steps to register a trademark in China
Filing the application
The company must either directly file an application with the China Trademark Office (CTMO) or file the application through the World Intellectual Property Organization (WIPO). If choosing the latter, the trademark application must be based in the country where the mark is currently registered.
Choosing the product and service subclasses
While China accepts the International Classification of Goods and Services under the 1957 Nice Agreement, it further divides these classes into subclasses. For example, general footwear and boots belong to different subclasses in China, so the same trademark can be registered by different companies in each subclass if these subclasses are not deemed as similar.
It is crucial that the applicant’s trademark covers all the relevant products and services – in each of the subclasses – pertaining to the business’ scope when filing for registration.
Registering the trademark in Chinese characters
Companies operating in China should know that their trademark in Roman characters will not completely protect them against infringement. The same or similar trademark can be registered in Chinese characters by another business. This is also key to a business’ profitability and image in China.
If others use your trademark in the local language, there are chances of losing customers and diminishing brand value due to the meaning, the pronunciation, or even the appearance of the Chinese characters.
The Chinese word for Coca Cola is ‘delicious happiness’ – not a direct transliteration, but effective in establishing the right brand reputation.
Application to register a trademark
Trademark applications can be submitted with the CTMO through a register agent. This system is preferable because it gives businesses greater control over the registration process, particularly in the determination of which class and subclass to file under and what types of products and services will be covered by the trademark.
In the case of filing for a trademark through the WIPO, it is the examiner who decides the subclasses that are covered by the mark.
Foreign applicants must register the Chinese version or a direct translation of their trademark to avoid any miscommunication or infringement.
To register a trademark in China can take up to 15 months, from the date of filing to preliminary approval and publication. However, this period does not include the time involved in gathering the right documents and preparing for the application. Additional delays can also be expected if there is opposition to the trademark.
Well-known trademarks enjoy protection under Chinese law. This protection is the closest China comes to protecting unregistered trademarks. However, the circumstances under which such protection is afforded are limited, given that the standard for a trademark being considered well-known is exceedingly high.
Trademark rights are national and do not cross borders. A brand’s trademark rights in one country do not afford it protection in any other country. This is a reality that brands must be mindful of when crafting brand and intellectual property protection strategies.
In an increasingly globalized world, knowledge of a brand in one country can certainly be influenced by use of that brand in another country.
The list of factors China uses in determining whether a trademark is well-known or not now also includes “value of the trademark”. In most cases, value goes hand in hand with the other factors, such as reputation.
No matter how many registration certificates a trademark has, the company who owns it has the main responsibility to protect it. Monitoring counterfeiting activity regularly in both online and offline markets is essential.
Chinese authorities simply do not have the resources to deal with every case of counterfeited merchandise, nor are they familiar with the particulars of every brand.
Foreign companies should have a plan in place to monitor the online and offline markets where their products are sold. Some of the most important online platforms to watch in China are Taobao, JD.com, Pinduoduo, and social commerce apps.
It is recommended to regularly do online searches of the brand in both English and Chinese to identify illegal sales.
Another step is to visit in person trade fairs, wholesale markets, factories, and locations where counterfeits could originate.
Gathering evidence, such as photos and purchase records, can be helpful when starting legal action. Combating counterfeiting is an ongoing process, so persistence is key.
Registering and protecting trademarks in China is a complex process. It requires extensive effort and diligence, but thoughtful IP protection enables brands to maximize their integrity and reap the full value of their intellectual property in China.
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.
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