1 TRADE MARKS - WHY REGISTER? 1.1 The surest means for securing exclusive rights to a trade mark in the PRC is by registering it with the Trademark Office. Rights derived from prior use of an unregistered mark are not recognized under the PRC Trademark Law. (Protection may be available under other laws, such as the Anti-Unfair Competition Law, but such protection is much less certain.) 1.2 Registration is granted on a first to file basis, so it is important to file an application early lest someone else does it first. 1.3 For companies which have yet to use their trade marks in the PRC, it is still worth obtaining a registration, as they can be maintained (every three years) by satisfying nominal use requirements. 1.4 Certain goods in the PRC are also required by law to bear a registered trade mark before they can be marketed, eg. pharmaceuticals for human use and tobacco products. 2 WHAT MARKS CAN BE REGISTERED? 2.1 Marks may be protected by registration in respect of specified goods and services (using the international classification system): 2.1.1 as marks used in business/commerce to denote the goods of a particular trader 2.1.2 as collective marks (ie. to distinguish members of a trade association or other grouping) 2.1.3 as certification marks (ie. to show that a certain quality has been reached for the goods or services in question) 2.2 Marks may also be registered or certified/acknowledged by the PRC Trade Marks Registry as marks which are "well-known" in China. Such acknowledgement gives enhanced protection under the Unfair Competition Law to prevent use of similar marks even on dissimilar goods or services to those for which the mark has been registered. 2.3 To be registrable, a mark must be: 2.3.1 a visually perceivable sign. (It is not possible to register sounds or smells or the three-dimensional shape of a product.) 2.3.2 distinctive. In other words, it must not be (i) descriptive of the goods or services in question (ii) generic to the trade. 2.4 A mark will not qualify for registration if: 2.4.1 it contains a geographical name of an administrative region in the PRC (at county level or above) or a well- known foreign place name; 2.4.2 it is a mark which exaggerates the quality or other characteristics of the goods or services so as to deceive consumers 2.4.3 it is a mark which is "detrimental to socialist morals or customs or having other unhealthy influences". 2.5 The Trademark Office may allow otherwise objectionable words to be put on the register with a disclaimer, but usually only if the disclaimer is requested from the outset. 2.6 A mark will be rejected if is the same or similar to a mark for which an application or registration is pending in respect of the same goods or services. It is possible (and recommended practice) to search for conflicting prior applications and registrations before filing. 3 THE IMPORTANCE OF SELECTING A CHINESE TRADE MARK 3.1 It is advisable for anyone marketing their goods or services in the PRC to have their own Chinese trade mark. As English is not widely spoken in the PRC, the majority of consumers will identify with Chinese character trade marks in making their purchasing decisions. 3.2 A Chinese character mark can be selected by: 3.2.1 "transliteration" of the foreign word mark, using Chinese characters which sound the same as the foreign word; or 3.2.2 "translation" of the mark, by choosing Chinese characters which represent the meaning of the foreign word. Further details are set out in the section on "Choosing a Chinese Trade Mark". 4 SECURING A TRADE MARK REGISTRATION 4.1 The Trademark Office examines applications for inherent registrability and conflict with prior marks. The application is then published for opposition; the opposition period lasts 3 months. If no objections are raised, a mark usually proceeds to registration within 18 months to 2 years from the date of application. 4.2 If the Trademark Office rejects the mark, an appeal to the Trademark Review Appeal Board ("TRAB") is possible. This can take 1 to 2 years to be decided. 4.3 If an opposition is filed, the Trademark Office will invite each party to make submissions. A decision is usually rendered 1 year later. An appeal from that decision to the TRAB may then be made. 5 SCOPE AND DURATION OF REGISTRATION 5.1 Each registration is valid for 10 years from the date of registration with renewals available for further 10 year periods. 5.2 Registration confers exclusive rights in relation to the trade mark including the right to prevent others 5.2.1 using an identical or substantially similar trade mark in connection with the same or similar goods for which the mark is registered; or 5.2.2 taking unfair advantage of the mark in some other way. 6 INTERNATIONAL REGISTRATIONS VIA THE MADRID AGREEMENT/PROTOCOL 6.1 China is a signatory to the Madrid Agreement and accepts International Registrations filed under the Agreement via WIPO. 6.2 China is also a signatory to the Madrid Protocol and accepts filings which claim priority under this international convention. 7 USE AND MARKING REQUIREMENTS 7.1 If a trade mark is not used as registered at least once every 3 years, the registration may be cancelled. However, simply advertising the mark in approved publications or exhibitions should satisfy this use requirement. 7.2 Trade mark owners are also required to use the "R" symbol or the words "registered trade mark" in conjunction with the registered trade mark applied to goods, as well as marking the place of origin and the name of any licensee on to goods bearing the registered trade mark. 8 CANCELLATION 8.1 Foreign companies entering the PRC market who find that their trade marks have already been registered or applied for will, because of the first to file principle, often find themselves disbarred from using their own mark in China. 8.2 Where a prior application for the same or similar mark has yet to be advertised, it can be resisted by opposition proceedings once advertised, within the 3 month opposition period. If the mark is already registered or the opposition period has elapsed, it can be attacked by a cancellation action. 8.3 Cancellation actions may be brought without limit of time against persons who have obtained registration of a mark by improper means, which includes registering the mark by copying, imitating or translating a well-known trade mark of another. 8.4 Cancellation actions, like opposition proceedings, can last several years (including appeals). It is always more cost- effective to file early and avoid disappointment. 9 BUSINESS NAMES 9.1 The Trademark Office is maintained by a division of the State Administration for Industry and Commerce (SAIC). A separate division of the AIC maintains a register for enterprise names of both foreign and domestic enterprises, at local and national level. 9.2 Registration at the national level lasts for 5 years from the date of registration and gives exclusive rights of usage throughout China within the scope of the enterprise's business purposes. However, such registrations - for which the applicant need not have a business presence in China - are currently in suspension (since December 1994). This is due to perceived incompatibility with the PRC Company Law which provides for registration of company names and with the Trademark Law provisions for registration of service marks. 9.3 Registration of an enterprise name at a local level may be possible if some form of local presence is envisaged (eg. by setting up a representative office or joint venture operation). It is usually possible to reserve the name for up to 6 months prior to the setting up of the business operation. Such registrations give exclusive rights only for the geographical area covered by the local AIC with which the registration is filed (which could be at city, municipal or provincial level). 10 UNFAIR COMPETITION/PASSING OFF 10.1 Even if a trade mark or enterprise name has not been registered in the PRC, it may be protectable under the Anti- Unfair Competition Law. 10.2 This law provides for protection against 10.2.1 unauthorized use of unregistered trade marks, packaging or trade dress, enterprise names or the personal name of another party when these are well- known in China; 10.2.2 "passing off" the registered trade mark of another party (that is, using an identical or confusingly similar mark, trade name or trade dress on identical or similar goods or services); and 10.2.3 the making of false trade descriptions, including misleading advertising. 10.3 Further protection is afforded to unregistered trade marks under the pricks Product Quality Law. Whilst the aim of the law is to make producers and sellers liable for defects in the quality of their products, the law specifically prohibits the counterfeiting or passing off of quality marks such as certification marks, marks of fame and marks of excellence. Traders are also prohibited from falsifying the place of origin of their products, or from passing off the name and address of their competitor. 1 May 1996 LINKLATERS & PAINES, HONG KONG OFFICE - Contact Partner Tom Hope Internet address - thope@landp.com Tel - 852 28424888 Fax - 852 28108133
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