Registering Your Trademark in China: Benefits and Tips
Are you doing business in China or have plans to do business there in the future? Its large population, developed infrastructure, and robust e-commerce make it an attractive destination for foreign companies.
China Requires Local Trademark Registration
In the Chinese business environment, it's not enough to have a distinctive trademark that your customers can associate with your brand. The government should legally recognize that mark as belonging to your business.
Chinese law doesn't recognize trademarks registered outside China's jurisdiction. So if you've only secured a trademark for your brand in your own country or somewhere outside China, it won't enjoy any legal protection within China. That is, unless the local Trademark Office considers it a "well-known trademark."
For a company, its product, or service to be recognized as "well-known" by Chinese authorities, it should have records to show that:
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Consumers in China have been using it in the past five years, if unregistered.
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Its sales, net profit, tax payment, and geographic scope of its market have been widely known and publicized in China for the past three years.
China Follows the First-to-File System
Nations worldwide fall under two categories when it comes to trademark systems. In countries like the U.S. or Canada, the "first-to-use" system prevails. Under this category, trademark protection goes to the person or business that first used the mark on goods and services. Entrepreneurs can use the trademark before registering it.
In contrast, nations like China, Japan, and EU countries uphold the "first-to-file" principle. This policy means that those who register a trademark first will have exclusive rights to distribute, sell, or promote the product or service carrying that trademark. Registrants can claim ownership of trademark rights even if they haven't started using those marks for manufacturing or marketing their brand. First-to-file registrants can also assert their trademark rights even if others have used those marks before they filed their trademark application.
Benefits of Trademark Registration in China
If you're entering China to do business for the first time, you need to register your trademark in China with the China Trademark Office (CTMO) as early as possible to enjoy local protection within its territory. Some of the advantages of having a registered trademark in China include the following:
• You prevent someone else from registering your trademark as their own and using it.
Chinese intellectual property (IP) experts say that trademark registration is a sure defense against trademark squatters. Trademark squatting, also referred to as trademark warehousing or trademark hoarding, became rampant following Beijing's launch of the National IP Strategy in 2008. With the application process fast-tracked and costs slashed, patent and trademark applications soared from 640,000 that year to 9.1 million in 2020.
Among the applicants were local Chinese manufacturers who used the product name of the goods they produced for a foreign entity. While some Chinese partners did this to facilitate exports, others deceitfully filed similar or identical applications to their foreign brand owners (or a famous and currently used mark). By doing so, the applicants can later resell the trademarks to the genuine owners for profit.
Some businesses fought hard against counterfeiters through lengthy lousy faith claims. Meanwhile, others opted to pay the price sought by trademark squatters. Legitimate brands only gained considerable ground in 2019 when the government amended the Trademark Law's Article 4 to penalize malicious applicants. In March 2021, the National Intellectual Property Administration launched a Special Action Plan that cracked down on malicious registrations. Some internationally known brands that have recently won in name rights disputes include Michael Jordan, Burberry, and Peppa Pig.
Having a Chinese trademark also allows you to work with Chinese distributors without fear that they'll register your trademark.
• You can apply for legal remedies against infringement.
One common legal action is to file a civil lawsuit and apply for the impoundment of infringing goods bound for export.
• You can demand the removal of online ads carrying a counterfeit of your brand.
You can invoke your trademark rights when you spot your brand name or mark used by another in Taobao, Tmall, JD, and other e-commerce stores.
What Can Be Covered by Trademark Protection
The following can be registered as a trademark:
Meanwhile, the following aren't acceptable for use as trademarks
Businesses are prohibited from using the country's name, national flag, national emblem, military anthem, the logo of central government agencies, or their location and names or visual representations of Chinese government buildings.
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Words or symbols associated with international inter-governmental organizations, such as the Red Cross, except when there's consent
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Geographical names of regions in China or foreign countries, except when the place name is an important part of a brand name
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Racially discriminatory symbols
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Symbols that oppose socialist beliefs
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Symbols that only provide the generic name, device, or model number of a product
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Symbols that only indicate the main raw materials, quantity, quality, weight, or function of a product
Choosing Your Chinese Trademark Name
When applying for a trademark for your brand, you should register the names in Chinese. Only the Chinese language name carries legal status in China. The ideal length of the Chinese version is two to four characters. The best names are easily pronounced, memorable, and positive when it comes to connotation.
In the Chinese language, every character isn't only connected to a certain sound, it also has a meaning. Moreover, there are characters that share the same phonetic sound but have distinct meanings. Hence, foreign companies are advised to work with native Chinese speakers when creating and choosing a local name. Before getting linguistic services, however, you should know your available options:
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Phonetic translation or transliteration
You're allowed to use a combination of characters that sounds closest to the original or Roman character trademark. For instance, Nike's Chinese trademark name is 耐克 (pronounced "nai-ke"), Siemens is 西门子 (pronounced "xi-men-zi"), and KFC is 肯德基 (pronounced "ken-de-ji.")
A foreign company may opt for the direct Chinese translation of its brand name if there's a dictionary equivalent for it as a whole or its parts. For instance, Apple's Chinese trademark name is 苹果, which stands for the fruit. Meanwhile, Microsoft is 微软, which combines the Chinese characters for micro 微 and soft 软. Vitasoy is 維他奶, which means life or vitality and soy or soybean.
When it's too difficult to apply a strictly phonetic or literal translation, businesses may consider replacing certain parts of the brand name with another word with a more pleasant sound or meaning in Chinese. Coca-Cola is 可口可乐 in China (pronounced as "ke-kou-ke-le"), which means delicious and happiness.
Business owners should also perform a trademark search to verify if the Chinese name they have in mind hasn't been registered yet.
Determining the Trademark Classification of Your Product or Service
Businesses need to know under which class and sub-class to register their goods or service. China's classification and sub-classification systems are based on the 11th edition of the EU's Nice Classification. The classification system has 45 classes—numbers 1 to 34 pertain to goods, while numbers 35 to 45 pertain to services. Every class has a sub-class with corresponding codes. The goods or product sub-classes are based on function or raw material. Meanwhile, the service sub-classes are divided according to content and target market.
Applicants need to specify the sub-classification of all their products and services and make trademark filings for all applicable sub-classes. By naming the sub-classes where your product or service belongs, you can prevent trademark squatters from applying in sub-classes relevant to your brand. The trademark classification list and tutorial on the CTMO website is helpful reference.
Documents Needed for Trademark Registration
Applicants should prepare the following when filing for trademark registration:
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Trademark registration application form (not necessary for online applications).
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Certificate of incorporation, certificate of corporate good standing, or passport for individual applicants (scanned copy).
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Power of attorney (scanned copy).
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Print and digital versions of proposed trademark design (six printed copies of the design: between 5 cm by 5cm and 10 cm by 10 cm).
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Sheet music or musical notations with a written description of proposed sound trademark along with a sound sample saved as a .mp3 or .wav file on a read-only disc.
Applicants should also be ready to provide the following information in both English and Chinese:
Trademark Registration
The CTMO advises foreign business owners to hire an IP attorney to review their application and register the trademark on their behalf at the CTMO or online.
Here are the steps involved in registering your trademark in China, some of which we have already discussed in detail.
1. Pick a Chinese name.
2. Conduct a trademark search.
Checking your preferred Chinese brand or trademark name against the CTMO's database will ensure that no other entity has already registered with the same name.
3. Select your sub-classification.
4. File the application.
5. Wait for authorities to finish examining documents.
The documents you submit will undergo a preliminary review by the CTMO that will last for one to two months. The office may send you an Amendment Notice if you need to correct or provide more details, which should be submitted within 30 days.
Once the CTMO finds the application documents satisfactory, it will start its formal examination, about nine months.
6. Your trademark registration will be open to public review.
For three months, the CTMO office will invite anyone to file their objections to the trademark you registered—in particular, to contest your ownership of it.
7.Wait for authorities to issue your trademark registration certificate.
If no one opposes your registration, the CTMO will finally issue your trademark certificate within one to two months.
Appealing a Denied Registration Application
If the CTMO receives an objection against your trademark registration, you get a notification that you need to respond to in 15 days. You should write the Trademark Review and Adjudication Board (TRAB) to conduct an administrative review of the other party's objection within that period. The TRAB has nine months to make a ruling on your appeal.
If the review turns out to favor the other party, you can file an administrative appeal with the Beijing Intellectual Property Court (BJIPC) 30 days from receiving the result of TRAB's review. The appeal can later be elevated to Beijing Higher People's Court and to the Supreme People's Court as a final recourse.
Validity of the Trademark Certificate
The trademark certificate issued by the CTMO is valid for 10 years. To extend its effectivity, you need to file for renewal 12 to six months before your trademark expires (or on the ninth year). Your trademark will become valid for another 10 years upon renewal.
Your trademark is recognized within mainland China only and not in its special administrative zones (Macau and Hong Kong).
Meanwhile, anyone can petition for the revocation of your trademark if it's left unused for three consecutive years.
What to Do When Your Trademark Is Infringed
When you discover that another entity in China is using your registered trademark, it's best to consult a lawyer or private investigator to help you with your case. A legal professional can help you with collecting evidence and work toward the best legal remedy.
The three types of evidence to collect include:
Suspected product samples or printed promotional materials and online ads bearing your trademark are acceptable as evidence.
You may also seek assistance from administrative enforcement authorities in China. For trademark violations, you may contact the China National Intellectual Property Administration, Market Supervision Bureau, State Administration for Market Regulation, and the Quality Technical and Supervision Bureau.
SOURCES:
https://www.iponz.govt.nz/news/protecting-your-intellectual-property-in-china/
https://www.hg.org/legal-articles/steps-to-register-a-trademark-in-china-58647