Tips for Trade Mark Protection in China

20 March 2019
Posted by Tony Grujovski

According to a report issued by the World Intellectual Property Organization (WIPO), over 3.7 million trade mark applications were filed in China alone during 2017 (that’s a lot of trade marks!). Well behind China, USA had the second largest number of trade mark application filings in 2017 with over 500,000 filings.

Given the significant number of yearly filings, China has become one of the most valuable countries for securing trade mark rights for any business that has China on their horizons.

Here are our top tips for protecting your trade mark in China.

Tip 1 – Get in very, very early!

If you are even thinking about expanding your business to China, the first thing you should do is seek protection for your trade mark in China.

China operates on a “first to file” system, which means first in, best dressed when it comes to registering trade marks. If another party files for your trade mark in China before you, that party generally has the greater legal right to registering the trade mark, and can obstruct your ability to use and register your trade mark in China. This could mean a costly rebrand for your goods and services sold specifically in China.

Trade mark squatting is rampant in China, where a person or company will apply for a trade mark being used by an overseas business in China, but which that overseas business has not sought to protect themselves yet. These squatters typically demand large sums of money to be paid by the overseas business (once they realise their trade mark is being squatted) in exchange for transferring their trade mark rights.

Challenging trade mark rights in China, particularly once they have become registered, is a very expensive and uncertain process. The best approach is to avoid the squatters and legal issues is by registering your trade mark before you promote or sell your goods and services to Chinese consumers.

Tip 2 – Think about Chinese language trade marks

Typically, Chinese consumers will translate or transliterate an English trade mark into its Chinese language equivalent, and begin referring to your trade mark using the translation or transliteration. As such, many overseas business trading in China will protect their English trade mark as well as the translation and/or transliteration in Chinese language.

Implementing Tip 1, overseas businesses will need to pre-empt the likely translation and transliteration of their English trade mark. We typically work with our trusted Chinese associates to determine the Chinese language trade marks which should be filed to obtain comprehensive branding protection in China.

Tip 3 – Choose the right approach to filing

There are two main ways in which an overseas business can file a trade mark application in China – either by instructing a local trade mark agent to file on their behalf, or filing a “Madrid Protocol” application which selects China.

The “Madrid Protocol” is a treaty (ratified by most countries in the world) that facilitates the filing of trade mark applications in a number of countries in one application, and is administered by WIPO. Once the Madrid Protocol application is filed, each selected country will examine the trade mark application in accordance with their local legislation and laws.

Generally speaking, if you are looking to protect your trade mark in two or more international countries at the same time, the Madrid Protocol process is usually the most cost-effective way for protecting your trade mark internationally, including in China. In saying that, there are various benefits that come with direct filing in China to consider, even if it is more expensive.

Tip 4 – Consider the goods and services being covered

Most countries, including Australia, divides goods and services (which need to be listed when filing the trade mark, to specify the scope of coverage of the trade mark) into 45 different “classes” under the NICE Classification system. In China, these classes are further divided into sub-classes. Items in different subclasses are generally not considered similar to one another. As such, if you do not have coverage for your trade mark in all of the subclasses under a class of interest, another person could register a trade mark in the subclasses not covered. You may be providing goods and services in those in those missed subclasses, causing infringement issues with the continued use of your trade mark in those subclasses.

It is important that the list of goods and services included in a Madrid Protocol application is specifically tailored to cover as many relevant Chinese sub-classes. Alternatively, direct filing in China provides the ability to select the appropriate sub-classes to be covered.

So, where should I start?

Registering a trade mark in China is a very complex process and not designed in a way which allows overseas business to easily DIY.

There are many peculiarities and nuances to the Chinese trade marks system which a trade mark professional can consider at the time of developing your Chinese trade mark protection strategy to ensure that your brand is comprehensively protected in China.

At Studio Legal, we are specialists in implementing international trade mark protection strategies, including for China. If you would like assistance with trade mark protection in China or any other countries of interest, please contact us on 03 9521 2128, or email us at hello@studiolegal.com.au.

DISCLAIMER

The information in this article is of a general nature. It does not constitute formal legal advice, and should not be relied on as such. Please see the full disclaimer in our website terms. Please contact Studio Legal if you are seeking advice about a specific legal matter.