Despite the active development of China's intellectual property protection laws, unfair competition problems such as bad faith registrations of foreign brands and counterfeit products are still widespread in China. In this article, we will provide you with legal grounds on how to avoid these problems when entering the Chinese market.
Today, the biggest problem for foreign companies trying to do business in China is the activity of trademark squatters - people who register other companies' trademarks in their own name with the intention of selling them. As a result, counterfeit products purporting to be made under your brand flood the Chinese market and undermine your business.
The fact that a foreign company may be widely known does not mean that its trademark is legally protected in China. There are thousands of examples of this, the most prominent of which is probably the Adidas case. The name, logo and imitation of Adidas products in the Chinese market have been changed in many ways.
In many ways, the above problem is closely related to the issue of Chinese trademark registration in China. Unregistered trade mark rights mean that a trademark, copyright or patent cannot be fully protected.
Therefore, if you are planning to enter the Chinese market with your trademark, you should first and foremost deal with the issue of registering your trademark rights in China as soon as possible to provide trademark protection. Otherwise, you may encounter the following threats related to the peculiarities of the Chinese market.
The "territoriality" principle
First, trademarks in China are subject to the principle of "territoriality": if your trademark is registered in another jurisdiction, there is nothing to stop your competitor from registering an identical trademark in China.
Another case is the registration of identical trademarks in a slightly different format. Trade squatters can use the features of Chinese translation of your brand's trade name and logo. In particular, the Chinese character name can be written in Latin characters: in this case, the competitors can use your name and reputation for their own promotion on the market.
Another issue related to trademark registration in China is the "first-to-file" system: the first to file a trademark application in China gets priority to register the trademark.
Before you submit an application for trademark registration, put emphasis on the first step in the trademark registration process: you need to conduct a trademark search for similar registrations and trademark applications in a special registry. You can conduct trademark search, for example, on the website of the National Intellectual Property Administration (CNIPA). You can do this on your own or hire professional trademark agents to expedite the process.
If you find after trademark search that the trademark in China is already registered, it is possible to bargain and negotiate to acquire it or to apply for registration of another trademark. If it is already registered, but has not been used for three or more years since the trademark registration date, you can file for cancellation of the registration and register it in your own name.
Submission of trademark application
If no one in China has registered your trademark rights, you can start the registration process yourself, which can be done in two ways: 1) filing through the China Trade Mark Office (CTMO) or 2) filing through the World Intellectual Property Organization (WIPO), of which China is a member.
Submission through China trademark office
In the first case, an applicant should contact one of the agents officially accredited by the China Trademark Office as an intermediary to help foreigners register trademarks in China.
Filing an application through CTMO is preferable if the registration of the right to your trademark includes an application for one class of goods. A trademark application for different classes of goods may not be later divided into separate applications for different subclasses, which would expose you to risks in case of opposition by the Chinese Office to the general application.
The application requires the payment of a 300 yuan fee if the application is for one class of the International Classification of Goods and Services (Nice Classification), with an additional 30 yuan fee for each additional item.
Then, the application and required documents are passed through substantive examination and, based on the results, a third party may object to the registration of the trademark within three months. In general, the examination of conformity with Chinese trademark laws and other registration matters take an average of about 12 months. After the publication of trademark certificate it is valid for 10 years with the possibility of renewal.
Submission through WIPO
Filing through WIPO may be a more convenient option if an applicant plans to register international trademarks in several countries at once, as well as in several trademark classes.
The procedure in this case is to contact the local intellectual property licensing authority. Before doing so, you must either have a registered trademark or apply for one in your jurisdiction.
Once you have filed with your local intellectual property office and paid the fee, your application with necessary documents will be sent directly to the World Intellectual Property Organization.
After successfully passing the formal examination, the application will be transferred to China to be examined for compliance with local trademark law. If successful, you will receive the corresponding registration certificate from the Chinese office.
Returning to the specifics of registering and protecting your brand in China, you should pay special attention to the following points.
Features of registration
First, due to the country's "first-to-file" registration system, if you decide to develop your trademark in China in the future, you should file your trademark application as soon as possible.
Also, remember the importance of jurisdiction: just because your trademark is registered in Hong Kong or Macau does not mean it is valid in mainland China.
In addition, it is necessary to pay special attention to the name and logo of the trademark. Registering in both English and Chinese characters can help avoid setting a precedent for Chinese competitors to borrow trademarks.
Brand reputation and digital promotion
Adapting and promoting your brand in China is also an important part of developing and protecting your brand in China. Status and reputation in Chinese society are key categories that carry over to business relationships. Creating your own blog on Weibo, working with the audience and promoting on WeChat and Douyin, as well as expanding activities and building a customer base on major marketplaces such as Tmall and Taobao, will all help you gain status and fame among Chinese consumers, which will reduce the scope and effectiveness of unfair competition against your brand.
Interaction with partners and employees
Speaking of the manufacturing aspect of doing business in China, it is very important to deal competently with your employees and partners who could be a potential problem for your development in the Chinese market.
First of all, when dealing with partners, develop and negotiate special licensing agreements with them and make sure that they do not disclose the technological features and manufacturing processes that are relevant to your product.
The same goes for your employees: require them to sign a license agreement and keep confidential details about your company and product. Try to limit the number of employees who have a complete understanding of the production chain, and also try to limit the turnover of employees who may have a broad knowledge of your product creation process.
Thus, the best approach to protecting your brand in China is to provide trademark protection by creating environment in which protection of your brand in administrative or criminal proceedings is not necessary in the first place. To do this, you must prioritize the timely China trademark registration and the licensing of your activities, and you must continually enhance your brand status and visibility among Chinese consumers by adapting it to their current needs.
The team of China Digital Marketing Agency offers all-round marketing and online brand promotion in China.Meet us Chinese version Site map