A Business Owner’s Introduction to Registering Trademarks in China

You spent countless hour thinking up the identifying marks of your business: its name, its logo, and its slogan. But when you bring your business to China you run the very real risk of losing all three since IP laws in your country may not be recognized in China.

In some cases, it’s just a matter of someone liking your idea and wanting to use it as their own. They may want to create a copycat business. It’s also not unheard of for trademark hijackers to take your ideas, only to try and sell them back to you.

For these reasons, there can be no understating the importance of registering your trademarks. By doing so you protect yourself in two ways: you prevent others from stealing your trademarks and you prevent others from stating you are infringing on their trademark rights, as was done in the infamous Apple case. Being caught in a trademark infringement case can be a costly affair, so it always pays to register your trademark in advance.

Where to go to register

In order to register your trademark in China you must register it with the Chinese Trademark Office. E-filing is available for Chinese businesses but is not yet accessible for foreign owned businesses.

Once you submit your application to the CTMO will allow other parties to oppose your registration for three months. If there is no objection, the CTMO will then move forward with the registration process and you can expect to have your registration certificate for months after that initial three-month wait.

At its most expedient, an unopposed registration can take nine months to complete, or up to a year and a half. The cost of this process is typically $500 to $1000. But if your registration is opposed then those costs may double.

There are also issues with applications which are deficient, or if there are similar trademarks already registered. For this reason, having counsel from the beginning can be both cost and time efficient. If your application is incomplete or flawed, a company may then file for a review with the Trademark Review and Adjudication Board.

What can be registered as trademarks?

In China, any visual symbol or sign that is used to distinguish a good or service of one person, entity, or some other organization from others may be trademarked. This includes designs, letters of an alphabet, numbers, 3-D symbols, words, even combination of colors, can all be registered as trademarks.

However, some trademarks are simply off limits, but reasonably so. For example, you can’t trademark a country name, the names of international organizations like the World Health Organization, can’t be registered as trademarks.

The Trademark Office also has a database of all registered trademark. You can save yourself time by checking this database for slogans, logos, or business names that may be similar to yours that have already been trademarked.

What class is your trademark?

In order to register your trademark, you will need to classify it.

China, like many countries, follows the World Intellectual Property Organization’s Nice classification which provides for 45 different classes of goods and service. But, beyond that, China also offers sub-classes to those 45 different categories. It is possible to have a similar or even identical trademarks, so long as they are in different classes or sub-classes.

In order to avoid trademark hijacking or consumer confusion, it can be wise to register your trademark in all classes that you believe are relevant and will cover every product you sell or intend to sell for up the next three years. If you fail to use the trademark in a chosen class for a three-year period, your protection of that trademark in that class will lapse.

Who receives the trademark?

Say you and a rival try to register identical, or even just similar, trademarks for the same type of product. Who will receive the trademark? The decision is guided by the “first to file” concept, which states that the Chinese Trademark Office will grant the trademark to the person who submitted the first application.

As you can imagine, while this policy makes things simple and expedient, it also makes it easy for trademark hijackers to get rights to your trademark if you don’t move quickly enough.

How long is your trademark valid for?

The day your trademark is approved and registered the clock starts. A trademark in China has a validity period of ten years.

Once your ten years are up you should apply for a renewal of the registration. The Chinese Trademark Office grants you six months to submit this application. This six-month period counts as a grace period. But if no application for renewal is made in that time period your registered trademark is cancelled.

Authorizing others to use your trademark

If you’d like to authorize another person or entity to use your trademark, you will need to create a license contract which will bind you and the person or entity you will grant use of your trademarks to. This relationship will be overseen by a licensor who will ensure the quality of the goods for both parties.

This license, like all applications, will be submitted to the Chinese Trademark Office.

Someone’s infringed on your trademark! Now what?

Trademark infringement occurs in many circumstances: if a symbol or slogan that is identical to your trademark is used, if someone sells counterfeit goods with your trademark, and if your trademark is replaced without your consent and then goods are marketed bearing a different trademark.

So what happens once your trademark has been infringed upon? At this point, it’s a good idea to seek an attorney who can guide you through the process. There are two roads which are generally taken: negotiations and litigation. In a negotiation your attorney will attempt to gain you a handsome settlement, sparing both you and the trademark infringer the costs of litigation. Sometimes, however, this may not work and the matter will go to the court. In court, the matter may take years to resolve. But as a foreign citizen you may still expect to receive a fair trial, though favoritism isn’t unheard of in smaller cities.

Another option is to go to the Administration of Industry and Commerce (AIC). This government agency exercises authority on a national, provincial, county, and municipal level and is the foremost agency when it comes to assisting in resolving trademark infringements and disputes, corporate registration, market supervision, and similar. It is also known as being very responsive to issues involving trademark infringement.

When an infringement dispute is brought before the AIC and the AIC determines that the accused is indeed infringing upon your trademark, the AIC then demands that the infringing act immediately stops, that all infringing goods be confiscated and destroyed, as well as any tools used for the creation of those goods. A fine is then imposed.

Should you find yourself unhappy with the conclusion reached by the AIC you may still bring your issue before the People’s Court.

Foreign investors rejoice, Apple wins intellectual property case in Beijing

As of April 2017, the Beijing Intellectual Property Court has dismissed the ban on Apple iPhone 6’s after a Chinese company accused Apple of infringing upon its design. This latest move by Chinese courts speaks to a positive evolution in recognizing international IP law in China after a long history of “copycat” theft by Chinese businesses.

One of the largest deterrences of foreign firms investing in China is the fear that they will not be able to protect their intellectual property. There have been multiple high-profile cases where massive international corporations like Apple and Disney have had to fight tooth and nail to protect their trademarks in China.

For Apple, the issue began in May 2016 after the international tech giant was ordered to stop selling iPhones in China after Shenzhen Baili Marketing Services lodged a complaint, stating that its patent on its mobile phone design was being infringed upon by iPhone sales.

More recently, Disney, the iconic and multinational mass media and entertainment conglomerate best known for its movies and theme parks, has run into issues with its establishment of its Shanghai park. Before it could even open its gates Chinese corporation Dalian Wanda Group opened up a theme park of its own using classic Disney characters such as Snow White and the iconic stormtroopers of the Star Wars franchise to greet its guests.

Copyright infringement exists at all levels and has remained a thorn in the sides of foreign businesses, with many technological firms choosing to keep China at arm’s length for fear that their blueprints may be stolen and copyrighted by Chinese partners.

Unfortunately, even while companies are increasingly pressured by the Chinese government to lower their prices and turn over proprietary technology, the laws involving intellectual property and copyrights still varies from province to province, making this an issue that remains difficult to untangle.

However, there has been change in a positive direction. China has begun making changes to its IP laws and has begun the process of creating a new national court system to handle IP cases, in a step that will help the country transition away from “local provincialism”.

The United States, which has expressed a strong interest in ensuring goods are “protected, respected, and if infringed on or stolen, there are consequences to disincentivize it”, has provided experts on the topic who are currently reviewing the new laws, training Chinese judges, and raising any IP issues they learn of in bilateral discussions with China.

These steps, while still not enough to stymie the theft of intellectual property nor give firms full confidence that they protect their ideas and trademarks, is still a clear indicator China desires to honor international IP protocol, with this win by Apple a sign of progress.

Featured Image Credit: Sean Pavone / Shutterstock.com