Now that China is the second biggest economy in the world, very few companies can resist its lure. This has resulted in foreign businesses clambering over each other to get a foothold in what is a rapidly expanding market. However, the Chinese landscape is difficult to navigate and poses a number of problems: none more so than 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.
- 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 in China. 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.
- 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 think about the Chinese translation of your trademark carefully, and enlist the help of native speakers and marketing and legal experts.
- 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.
- Build a good 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, exhibition 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).
- All types of enforcement actions can be combined to achieve optimal results: administrative raid; customs seizure, 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, it is important that foreign companies take adequate steps to maximise intellectual property 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.