China business: understanding trademarks in China — be proactive and avoid common pitfalls in IP protection

Protecting trademarks is a crucial first step for any foreign company looking to do business in China.

Often, foreign companies fail to protect their trademarks holding to the misconception that there’s a lack of intellectual property enforcement in China. However, the People’s Republic of China has been a member of the World Intellectual Property Organization (WIPO) since 1980. What’s more, there are three national laws of which form the national legal framework for IP protection in China: the Trademark Law, Copyright Law and Patent Law.

Commonly, companies facing IP infringement trouble in China have not taken the necessary steps to protect their IP prior to entering the Chinese market.

In China, trademark registration follows the rule of first to file. Under the Trademark Law of the People’s Republic of China (revised 2014), the following instances apply to the first to file rule:

  • Where two or more applicants for trademark registration applying for registration of an identical or similar trademark for the same type of commodities or similar commodities, the earlier trademark registration shall be preliminarily validated and gazetted.

  • Where trademark registration applications are submitted on the same day, the trademark which has been used earlier shall be preliminarily validated and gazetted, and the other applications shall be thrown out and shall not be gazetted.

In other words, whoever files the registration of the trademark first is granted the trademark. Therefore, it is advisable for foreign companies to register their trademark prior to entering the Chinese market, otherwise, after attending an exhibition or business meeting in China, they may discover their trademark already in the process of registration under the same or similar type of goods or services.   

Another trademark issue is that of international trademark registration. Although China has been a member of the Madrid Agreement Concerning the International Registration of Marks since 1989, which allows trademark registration to be extended internationally via one registration, the Chinese courts often only recognise such trademark registration as it extends to the border of the People’s Republic of China. As a result, the trademark is not registered in the territory of the People’s Republic of China and cannot be protected in China.

The Trademark Law allows individuals or entities to file an application to register a trademark, although applications shall be filed in the Chinese language and any supporting documents such as certificates or certification of documents are required to be translated into Chinese.

For foreigners or foreign companies without an established office or address in China, a trademark agent is required to be entrusted to conduct trademark registration or any matters relating to trademarks.

The Trademark Bureau is required to complete an examination of a trademark registration within nine months upon the date of receipt. If there are no requests for explanation or corrections, the trademark shall be preliminarily approved via a public announcement; and should there be no objection filed within a three-month period, the Trademark Bureau will issue the applicant a registration certificate and publish a notice in the Official Trademark Gazette, stating that the trademark has been registered. Trademarks registration are valid for a period of 10 years.

Trademarks can be registered in only Latin characters since there is no requirement to register the Chinese version of the mark. However, it is generally advised that companies working in the territory of China register both the Chinese and Latin characters, as well as the Pinyin of the Chinese characters.

Customarily, the mark is localized for the Chinese market and safeguarded from other competitors registering a Chinese version of the Latin name in the future once the mark has gained recognition in the market. For foreign companies only exporting from China, there is generally no need to register the Chinese version of the mark since it usually cannot be understood outside of China.

Protection of trademarks may be perceived as a minefield in China. Many famous brands face trademark infringement in China and often companies discover their trademarks used across various commodities unrelated to their own, without even stepping foot into China.

In our work at Horizons, we find many foreign companies with previous or current trademark infringement troubles to lack prior trademark protection before entering into the Chinese market. Therefore, as stated at the outset of this post, the first step for any company planning to do business in China is to file an application for trademark registration in China.

If you would like more information about trademark protection in China or other related corporate matters, send us an email at talktous@horizons-advisory.com, and we’ll have a Horizons professional contact you.

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