Ensuring that you register your trademarks in China is one of the first things we advise all companies interested in entering the market to do. Many companies are caught out as they assume that the trademark system in China will be similar to their own country, but this definitely isn’t true. In this post we look at six things you need to know about trademarks in China before going there.
1 First to file (some exceptions, but you are not one)
Unlike in many other countries that have a ‘first to use’ trademark system where the first person or company to use the mark in a commercial setting can establish rights to it, China has a ‘first to file’ system where the first person or company to file the mark is recognised as the owner. This is the case regardless of who is the first to use the mark commercially.
There are some exceptions to this rule in the case of ‘well-known’ marks. However, the provisions of who this applies to are not clear and even global household names struggle to apply for this status. Rest assured that this status does not apply to you, so best practice is to register as soon as possible.
2 Bad faith filings are a problem
In no small part due to the ‘first to file’ system, China is notorious for bath faith filings. In fact, these are a bigger problem to brands entering the market than trademark infringement. In most cases fighting the bad faith actor in court would be futile as they’ve done nothing wrong in the eyes of the law.
In such cases, brands are usually faced with the choice of re-branding for China or negotiating with the bad faith actor in order to buy the mark from them. Neither is ideal and both will cost you more than registering the trademark in the first place would have. Prevention is better than cure!
3 Some subclasses are specific to China
While China recognises the 45 classes for goods and services laid out in the Nice Classification system, it has a unique interpretation of this system. In China, the Nice classes are further divided into additional subclasses, with each of those subclasses treated distinctly. The number of subclasses in each class can range between two and twenty-four.
The extra subclasses do not just create extra complexity, but also mean that the same mark may need to be registered to multiple subclasses if you sell a range of products in different subclasses, or to stop a rival bringing out a brand of the same name in a slightly different subclass.
4 Both English and Chinese marks should be registered
When registering a mark in most countries, the English name, or more accurately the Latin letters, are the only things to worry about (logos aside). However, although Latin letters are often used in China, the more commonly used script is Chinese characters. Therefore, to ensure full protection, a brand’s name should be registered using Latin letters and a Chinese equivalent.
A Chinese name would usually either be a direct translation, or a transliteration using characters that not only sounds vaguely like the original name, but also convey the type of meaning or emotions you wish your brand to be associated with.
5 China has the world’s busiest Trademark office
In 2019, there were over 7 million trademark registration applications filed in China. The total number of registered trademarks in China surpassed 24 million. Compare this to the US, which is ranked second globally, with over 640,000 applications in 2018. The China Trademark Office (CTMO) deals with over 50% of global trademark applications!
With such a heavy workload, it’s hardly surprising that a mark can take up to 18 months to be approved and the rejection rate is over 40%. The backlog of cases means that the CTMO’s bureaucracy will reject an application for the slightest reason.
6 There are a range of enforcement options available
Some people think that fighting a trademark violation in China is a futile task as the system is rigged against foreign companies. However, this is not true. Foreign companies frequently win cases against local infringers. There are a range of enforcement options available, including working through customs, AQSIQ, e-commerce platform’s own anti-counterfeit departments as well as the courts.
The best way to ensure your trademarks are not infringed in China is to engage with the Chinese system on its own terms and register your IP as soon as you can. This is by far the best way of reducing the chance of needing to engage with any of the enforcement mechanisms.
ADN is a registered trademark agent in China, meaning that we can register trademarks directly without the need for middlemen. Even if you’re only considering selling to China at some point in the distant future, registering your brand name is an inexpensive way to prevent much bigger issues further down the line. Get in touch if you’d like to know more.