4 best practices for protecting trademarks when entering the Chinese market
Working with a team of experienced trademark counsel in the U.S. and China is a critical to launching a successful expansion of a brand into China. This article provides a set of checklists to guide companies, including the preliminary steps to take to protect a company’s brand assets when entering the Chinese market to proactive enforcement options to combat unauthorized third party use of trademarks in China.
1. Apply for a Trademark Registration in China
First, it is essential to register trademarks in China before entering the Chinese market. China is a “first to file” country, so the first company/entity/individual to file a trademark application has priority over another entity that may have been using the trademark in China earlier without a trademark registration. This is a key difference from trademark law in U.S., where prior use of a trademark can create “common law” rights, without any registration. It is also important to consider actual use of the trademark in China and whether the use will be in English or Chinese characters. Trademark counsel can help with the following steps to start the registration process:
- Consult with Chinese counsel to confirm that the trademarks are available for registration in China
- Consult with Chinese counsel to prepare a description of goods and services that fit the company’s business scope and future expansion
- File trademark applications and, if possible, claim priority based on prior foreign trademarks if the foreign trademark application was filed within six months of the Chinese application
- Consider registering an equivalent Chinese trademark of the foreign trademark, since Chinese is more acceptable by Chinese consumers. When choosing a Chinese equivalent, consider the following:
- Take into account not only the meaning, but also the sound, tone and look of the Chinese characters chosen for the trademark; and
- Compare the chosen Chinese equivalent with the existing similar trademarks in China in order to promote registrability and avoid infringing other’s trademark right.
2. Addressing Prior Third Party Applications
During the application process, it is not uncommon to identify third parties who have already filed a trademark application in China for an identical or similar trademark. For example, an initial search may identify that your trademark has already been registered in China by a third party or that a third party has filed a trademark application seeking registration of the trademark. If this is an issue, your team of trademark advisors in the U.S. and China can work with you to analyze options to recapture the trademark in China, which may include:
- Oppose the pending third party application (if it has not yet matured to a registration), based on:
- The third party trademark application is a reproduction, imitation, or translation of your company’s trademark;
- The third party trademark application was submitted in bad-faith;
- The third party trademark application includes a geographical indication of goods, but the goods are not from that geographic region;
- The third party trademark application was identical with or similar to another's trademark that had been registered or preliminarily approved for use on the same or similar goods and services; and/ or
- The third party trademark application prejudiced the pre-existing right of others, or was filed to block the registration of a trademark that was already being used by another party and had produced a certain influence.
- File a petition to cancel the third party trademark registration based on non-use of trademark for three successive years, if the trademark was registered for more than three years, or based on reasons discussed above in connection with a potential opposition.
- Send a warning letter to the third party requesting withdrawal of the trademark application or an assignment of rights in the trademark.
- Negotiate with the third party to purchase the trademark.
3. Addressing Trademark Infringement in China
- If you identify any unauthorized third party trademark use in China, there are different options that you and your trademark counsel can consider, including:
- Conduct an investigation into the infringing use, including gathering content from the infringer’s website or conducting an on-site investigation to collect evidence. The evidence should comply with required formalities, such as attestation by a Chinese Notary Public Office. (In Chinese practice, notarized evidence has a high evidentiary value.)
- Send a demand letter to the infringer.
- Negotiate with the infringer to cease and desist from use of the mark (or offer to purchase the infringer’s rights in the trademark in China).
- Lodge a complaint with the Administration for Industry and Commerce on the grounds of trademark infringement.
- Ask the Quality and Technical Supervision Bureau to initiate an investigation regarding the quality of the goods and services offered in connection with the mark.
- Apply to Customs in China to record your trademark registrations and protect your rights related to the use of the trademark on exported goods.
- File a civil trademark infringement lawsuit with the People’s Court.
- Report a crime with the People’s Procuratorate or Public Security Bureau.
4. Trademark Licenses in China
The requirements in China related to trademark licenses are changing and include fewer formalities. According to the new trademark laws and regulations, the recordation of trademark licenses with the Chinese Trademark Office (“CTMO”) is no longer a requirement. However, it is highly recommended to record all trademark license agreements with the CTMO for compliance purposes. In addition, a trademark registration in China is required to have the exclusive right to use and license the marks in the local market.