Trade mark and brand protection in China - the importance of a comprehensive strategy

The volume of trade mark filings in China remains high – in 2020 close to 9.4 million trade mark applications were filed compared with 80,736 trade mark applications filed in Australia. Navigating trade mark protection in such a crowded field is not straightforward. To obtain the right protection, registering trade marks may not be enough – a brand owner needs to consider a range of options, and these are discussed below.

Options for comprehensive protection

• File and file early – For those intending to manufacture or sell products or services in China it is essential to register key trade marks, including the words, Chinese character marks for the words, and logos. Chinese law does not protect a mark unless it is registered. It is prudent to consider a wider scope of protection than commonly used in other countries, to cover not only the goods and service of interest but closely related goods and services.
  
  Be aware, if a trade mark is applied for or registered by another trader in China, there is little opportunity to have it cancelled unless it is a well-known mark of another trader, or filed in bad faith, or is vulnerable to cancellation for non-use.
  
• File for a Chinese character trade mark - Chinese consumers often refer to foreign brands by a Chinese version of the name. If there is no official Chinese language version of a mark 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 businesses to develop and consistently 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 marks in stylised get-up, logos and devices - that is, artistic works - by submitting an application, together with proof of ownership of copyright, with the National Copyright Administration Office. Copyright registration is quicker and generally less expensive than trade mark registration, as registration is achieved 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 any particular goods or services, as is the case with registered marks. Copyright registration can be particularly useful to prove ownership of a logo or device in opposition or removal proceedings against another trade mark.
• Register the mark with the Chinese customs office - This is a useful tool to stop the improper export of infringing products from China. The process with Chinese customs is both inexpensive and quick, namely three to five months. It permits the Chinese customs office to search outgoing exports for possible infringing products, either on its own initiative or on the request of the registered trade mark owner.

Bad faith filings

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

• The cited mark was not filed for the “purpose of use” – for example, the applicant has filed so many applications/registrations, amounting to ‘warehousing’ of marks rather than demonstrating intention to use.
• The industry, operating conditions etc. of the owner of the cited mark do not demonstrate any intention to use.
• The owner of the cited mark is the subject of previous legal decisions that have determined bad faith or infringing trade mark activities.
• The cited mark is identical with or similar to a famous mark.
• The cited mark is identical with or similar to the name of a famous person or company or other commercial indicia.

Key takeaways

• Speak to your trusted trade mark attorney as early as possible about your proposed trading interests in China – trade mark searches can provide an early indication of likelihood of obtaining registration. Register rights in brands and marks well in advance of plans to manufacture or sell products in China.
• A bundle of rights is likely to be the most effective enforcement tool. Consider using the various administrative processes discussed above to protect brands and trade marks in China. Chinese administrative processes are relatively straightforward and less expensive than initiating or defending litigation which requires investigations, evidence, legal documents and court proceedings.
• Chinese administrative and court proceedings are strict on formalities, documentation requirements and timeframes. There are high burdens of evidentiary proof. Having good records is important, as is the ability to act quickly.
• Be patient – obtaining trade mark protection in China can be a complex, step-by-step process, involving cancellation actions against prior similar marks, revocation proceedings in the case of bad faith filings and negotiations to take assignment of prior marks.