INTELLECTUAL PROPERTY PROTECTION & TRADEMARKING IN CHINA
One of the first steps for brands that want to enter the Chinese market, is to ensure that all intellectual property (IP) is protected and trademarked. As IP rights are jurisdictional, a brand with their IP registered and protected in their home country will not automatically be protected in China.
Regulated by the China National Intellectual Property Administration (CNIPA), China follows a ‘first-to-file’ system when it comes to trademark registration. This essentially means, that the first entity to register a trademark will have all exclusive rights to it. This makes it possible for third parties to register the trademark of foreign brands first, preventing these brands from using it within China. A practice known as ‘trademark squatting’.
When a situation like this occurs, brands have several options:
- Paying the third party a licensing fee to use the trademark
- Buying the trademark back from the third party
- Changing the branding and trademark for China
- Trying to prove that the third party registered the trademark in bad faith
- Proving the trademark has not been used by the third party recently
None of these options are appealing and the last two could lead to lengthy and costly legal battles. Thus, to avoid any of these issues, brands should formally register their trademark with the appropriate authorities in China as early as possible, protecting themselves against trademark squatting and future cases of IP infringement. Brands that do not register will have very little protection when dealing with encroachment.
In the past couple of years, China has improved its protection of IP by applying more significant penalties to counterfeiters, whilst also increasing actions and fines against malicious trademark squatting practices and other irregular trademark applications from unlicensed agencies. These measures have assisted in brands gaining back control of their trademarks from squatters, even in cases where they were not the ‘first to file’.
How to Register Trademarks
It is important to note that Mainland China, Hong Kong, Macau, and Taiwan all have separate trademark registration systems.
Oftentimes, brands will localize their brand name or logo for China. If a brand does not do so, then Chinese consumers may develop their own Chinese nicknames for the brand or products that are outside of the brand’s control. Best practice is to register both English and Chinese trademarks for the use in China.
Trademarks in China are divided into a series of classes and subclasses. When registering, brands are only given exclusive rights to the trademark within the class of goods or services registered for.
Prior to registration, brands need to check the trademark database to ensure that their registrations do not infringe on the millions of already registered trademarks. A free online search tool in both English and Chinese is provided by the Chinese trademark office: http://wcjs.sbj.cnipa.gov.cn/.
Although not finding a conflicting mark on the database is a good sign for brands, it is not a guarantee. Non-professional searches often lead to relevant trademarks being missed. Moreover, trademarks usually take 3-6 months after filing to appear on this database.
There are generally two options when it comes to trademark registration in China. The first is by directly applying to the Chinese trademarks office (the ‘national’ system), and the second is by extending an international trademark registration through the Madrid System (the ‘international’ system). A breakdown of differences between the two systems is provided below:
For more information, visit: https://www.wipo.int/finance/en/madrid.html
Once registered, trademarks are protected and valid for 10 years, after which they can be repeatedly renewed every 10 years, within 6 months of expiration. However, if a trademark is left unused for a period of three years, third parties can apply to cancel it due to non-use.
Brands are highly advised to work with an experienced and licensed agency or attorney when registering trademarks in China, as they can ensure that the trademarks are registered correctly and will provide the expected IP protection.
Monitoring IP Infringement & Enforcing IP
Once a brand has registered their IP in China, they are responsible for monitoring infringement and enforcing their IP. Brands can either work with a specialist that is able to provide these services or monitor both online and offline markets for infringement themselves, which can be time consuming.
To prevent products that infringe IP from being exported from China, brands can register their IP with the General Administration of Customs. Afterwards, brands will need to ensure a quick response to notices about suspected infringing products.
If an infringement is found on an online platform, the brand can provide the platform with evidence of their IP registration and request that any infringing products or sellers will be removed. Most E-commerce platforms will have their own systems for reporting IP infringement, that brands can utilize, if they have the registered IP rights. To pursue further legal actions against IP encroachment, both online and offline, brands are recommended to seek local advice and assistance. A local advisor can help the brand with gathering evidence of infringement, then explain the different options available. These can include going through local authorities, for both administrative and criminal enforcement.
How Melchers can support foreign businesses in China
With 155 years’ experience and expertise in doing business in and with China across various industries, we recognize, that each business requires a customized solution for its approach to the Chinese market. An important role in doing business with China are legal matters, such as the corporate structure and IP rights. Through our experience, we can build the right corporate structure to reflect the business needs of our partners.
We have in-house lawyers to assist with legal issues and can draw on our broad network for specific legal topics. Melchers can help to file a trademark application with the trademark office of each country in which you are seeking protection or can use WIPO’s Madrid System to apply for protection in up to 126 countries.
Our partners can also rely on us and benefits of having Melchers’ support include:
- Providing you crucial legal advice about your trademark.
- Conducting your trademark clearance search before you file an application.
- Preparing your application accurately.
- Enforcing and maintaining your trademark rights.
- Shielding you from fraudulent solicitations.
Disclaimer: This article merely describes the IP and trademark registration process in China at the time of writing. It does not intend to be a legal assessment or to be used for legal purposes.