Basic advice for trademark protection in China

Now that China is the world’s second biggest economy, very few companies can resist its lure – or risk ignoring it. This has resulted in foreign businesses clambering to get a foothold in what is a rapidly expanding market. However, the Chinese landscape is difficult to navigate and poses various challenges, none more so than in the field of intellectual property.

Foreign companies must pay special attention to the trademark protection and enforcement regime in China. Failure to do so can be extremely damaging to your business. In particular,

• Register promptly: Take steps to register any key trademarks and logos as soon as possible in China, and seek legal advice to ensure adequate protection in related classes.
• Register broadly: Consider the immediate class for the goods/services, as well as related items in other classes. Be aware of China’s sub-class system within one class, and ask your local counsel to review your goods/services before you file.
• Register in multiple scripts: Because the registration of a trademark in Roman characters does not automatically protect the trademark against the use or registration of the same or similar trademark written in Chinese, consider registering key trademarks in Chinese to: (a) pre-empt unwanted Chinese registrations and (b) to prepare the way for sales in China at a future date. Be sure to consider the Chinese translation of your trademark carefully, and enlist the help of native speakers and marketing and legal experts.
• Watch out for trademark squatting: In the case of ‘trademark pirate’, consider (a) due diligence on the applicant/registrant and the goods covered; (b) filing non-use cancellation if possible; (c) spending time to dig evidence on prior use/reputation and any potential link between the squatter and the brand owner; and (d) potentially buying back the trademark under cover.
• Establish evidence: Create a robust track record of trademark use in China. Ensure that you have dedicated plans or personnel to collect, store and categorise product packages, photos, product orders, sales contracts, relevant invoices, shipping documents, advertisements, product catalogues, magazines, newspapers, exhibitions and expos, as well as any license agreements. A good library of trademark activity in China can serve you well both defensively (such as non-use cancellations) and offensively (such as opposition or invalidations).
• Create an enforcement strategy: All types of enforcement actions can be combined to achieve optimal results, including administrative raids, customs seizures, civil litigation, trade fair complaints, online take-downs or even criminal prosecution.

In conclusion, with a burgeoning middle class with money to spend, China provides exciting opportunities for foreign companies looking to invest or distribute in the Far East. Nonetheless, since China operates a “first to file” system for trademarks, foreign companies must take adequate steps to maximise IP protection in China. Most importantly, foreign companies should apply to register their trademarks before entering the Chinese market and, if the need arises, be prepared to enforce these rights.