Trademarks and trademark protection in China – the importance of a comprehensive strategy

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Despite the current tensions between Australia and China as trading partners and the slowing Chinese economy, many Australian companies continue to trade with China and seek protection of their intellectual property rights before doing so.

The volume of trademark filings in China remains high – in 2020, nearly 9.4 million trademark applications were filed, compared to 80,736 trademark applications filed in Australia. Navigating trademark protection in such a crowded field is not easy. To get the right protection, registering trademarks may not be enough – a trademark owner should consider a range of options, and these are discussed below.

Options for complete protection

  • Drop off and drop off early – For those intending to manufacture or sell products or services in China, it is essential to register major trademarks, including words, Chinese character marks for words and logos. Chinese law does not protect a trademark unless it is registered. It is prudent to consider a wider scope of protection than is commonly used in other countries, to cover not only the goods and services involved, but also closely related goods and services. Be aware that if a trademark is applied for or registered by another trader in China, there is little chance of having it revoked unless it is a well-known trademark of another trader, or registered by bad faith, or liable to be canceled for non-use.
  • Dossier for a trademark in Chinese characters – Chinese consumers often refer to foreign brands by a Chinese version of the name. If there is no official Chinese language version of a brand created, used and promoted by the foreign owner, it is likely that Chinese customers will create a Chinese version. For this reason, it is important for companies to consistently develop and use a Chinese character version of their marks, or risk a third party registering and using a Chinese character version.
  • Copyright registration provides strong rights – It is possible to obtain copyright registration for stylized presentation marks, logos and devices – i.e. artistic works – by submitting an application, together with proof of ownership of copyright, with the National Office for the Administration of Copyright. Copyright registration is faster and usually less expensive than trademark registration, as the registration is completed in one to two months if the proof of copyright ownership document is clear. Registered copyright has the added value that it is not limited to particular goods or services, as is the case with registered trademarks. Copyright registration can be particularly useful for proving ownership of a logo or device in opposition or removal proceedings against another trademark.
  • Register the mark with the Chinese customs office – This is a useful tool to stop the abusive export of counterfeit goods from China. The process with Chinese customs is both inexpensive and quick, namely three to five months. It allows the Chinese customs office to search for possible counterfeit products for export, either on its own initiative or at the request of the registered trademark owner.

Filings in bad faith

Bad faith deserves special mention as a relatively new tool, proving effective in supporting the rejection of applications or the cancellation of registrations filed in bad faith. The following elements have been identified by Chinese courts as relevant in assessing alleged bad faith statements:

  • Cited trademark was not filed for “purpose of use” – e.g. applicant filed so many applications/registrations, which amounts to “storage” of trademarks rather than demonstrating intent of use.
  • Industry, operating conditions, etc. of the owner of the quoted mark do not demonstrate any intention of use.
  • The owner of the cited trademark is the subject of previous court decisions that have determined bad faith or infringement trademark activities.
  • The cited brand is identical or similar to a well-known brand.
  • The trademark cited is identical or similar to the name of a famous person or company or other commercial indicia.

Key points to remember

  • Speak to your trusted trademark attorney as soon as possible about your proposed business interests in China – trademark searches can provide an early indication of the likelihood of registration. Register trademark and trademark rights long before plans to manufacture or sell products in China.
  • A set of rights is probably the most effective enforcement tool. Consider using the various administrative procedures described above to protect trademarks and registered trademarks in China. Chinese administrative procedures are relatively simple and less costly than initiating or defending a dispute which requires investigations, evidence, legal documents and court proceedings.
  • Chinese administrative and judicial procedures are strict on formalities, documentation requirements and deadlines. The burdens of proof are high. Having good records is important, as is the ability to act quickly.
  • Be patient – obtaining trademark protection in China can be a complex, step-by-step process involving cancellation actions against prior similar trademarks, revocation proceedings for bad faith filings, and negotiations to obtain the assignment of earlier marks.
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