Planning Your Trademark Strategy for China

March 26, 2012 Posted by China Briefing Reading Time: 4 minutes

Mitigating against infringement is now relatively easy and inexpensive

Op-Ed Commentary: Chris Devonshire-Ellis

Mar. 26 – One of the most common topics that I get asked about when lecturing on China business issues relates to the subject of trademarks in the country. Questions typically range from mitigating risk, to procedural issues, and questions as to whether an existing registration (such as in the United States) is sufficient for China.

The risk aspect for trademark infringement in China has actually decreased over the years (with the high profile exception of the Apple vs. Proview iPad case) and the desire and ability for Chinese companies to effectively steal a well-known brand is relatively small, although it does exist.

China has become more sophisticated in its approach, and now the real risks lie in patent infringements rather than brands. The reason for this is in the valuable technology that is associated with patents, rather than the fairly basic attempt at piggy-backing on a brand name.

Nonetheless, trademark protection remains something that should be seriously considered when looking to sell products or services in China. Here are some basic ground rules and advice:

“China” is a multi-faceted animal when it comes to intellectual property. Jurisdictions are separated due to historical differences between Mainland China, Hong Kong, Macau and Taiwan. It may not be necessary to register a mark in each jurisdiction, but this depends on other matters and can vary business by business. Manufacturing in China with the intent to sell to Hong Kong and Taiwan, for example, would probably dictate a need to register in all three jurisdictions.
Having your trademark registered in the United States, European Union or elsewhere does not provide any protection in China. Many overseas businesses do not appreciate this fact. Accordingly, if selling to or manufacturing in another country, registration should be pursued by filing your mark again in that jurisdiction.
International agreements that China is a signatory to dictate that if a mark is registered in multiple jurisdictions it may automatically obtain international recognition in other countries. How this is applied, however, is dependent upon a number of factors, including whether the mark is registered with countries employing the same protocols, or even whether the applicant’s country has diplomatic relations or not. A case in point here is that China is a signatory to the standard accepted “Nice” agreements, while India, for example, is not. Accordingly, it pays to check your status with an IP lawyer.
Even if your mark can claim international coverage under the pertinent agreements, we typically recommend that local registration is carried out in any event for the purposes of protecting a mark in China. This is because the filing procedures in China and the accompanying documentation, including the mark’s validation of approval, are issued in Chinese language. In the event that a dispute occurs and litigation is brought, it helps to have proof of ownership lying in original documentation in Chinese. It simply makes it easier for the judge and the court to understand the legitimacy of claims.
Trademark registration in China is not expensive, but can be time consuming to reach a positive conclusion. For this reason, we recommend that trademark registration in China is carried out as soon as possible once a business begins to make plans for a China entry. With up to a two or even three-year wait for the mark to be formally recognized as your property, it makes sense to initiate a registration well before China market entry takes place.
Trademarks are organized into different categories identified in 45 different classes. A complete list can be found here. In many cases, your business activities may fall into more than one category. If so, it makes sense to register in all categories that are applicable to your business.
Domain names should also be secured, including all .com, .biz, .org and other derivatives as applicable. Country prefixes such as .com.cn and .cn should also, wherever possible, be obtained and secured.

Trademark registration as concerns China is not especially expensive, however in order to mitigate against potential problems, we do recommend following the above steps. The more you can pin down your mark, the more secure it becomes, and the less likely it is someone will be able to successfully infringe upon it. Multiple registrations are recommended in all areas where you feel your business could be exposed, with the extra registrations in your possession being some comfort to concerns regarding brand theft.

Chris Devonshire-Ellis is the founding partner of Dezan Shira & Associates. The firm can advise and assist on trademark registrations in China. Please contact legal@dezshira.com for assistance with trademark registration and related matters.

Related Reading

Intellectual Property Rights in China (Second Edition)
From covering protocol for dealing with trade fairs, to the application processes for trademarks, patents, copyright and licensing, as well as dealing with infringements and enforcement, this book is a practical reference for those concerned with their IPR in China.

Conducting Due Diligence in China
In which we take the overseas executive through varying stages of legal, financial and operational due diligence and highlights common areas of concern. Importantly, the report discusses areas of manipulation that can exist in the examination of Chinese companies, including legal documentation, techniques of assessing financial statements, asset checks such as land use rights, fraud within human resources claims and how to evaluate government involvement and liabilities.