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The New York Times has reported that Apple Computers has settled
its trade mark dispute with Shenzhen Proview Technology over the
IPAD trade mark for a staggering 60 million dollars. Although the
IPAD trade mark will be assigned to Apple, the computer giant's
experience illuminates the importance of seeking trade mark
registration in China.
In Australia, entitlement to use and registration of a trade
mark is generally determined by the earlier of the first to use the
trade mark, or the first to file an application to register the
trade mark. In distinct contrast, China (excluding Hong Kong) is a
'first-to-file' jurisdiction. The entitlement to use of a
trade mark in China is based upon the first person to register the
trade mark in China, not the first to use it.
This means that a party unrelated to an Australian trade mark
holder, could and would be well within its rights to, register a
trade mark in China that is identical or similar to an Australian
trade mark. Once a third party has attained registration in China,
the owner of an identical or similar Australian trade mark would
have no right to use or register the mark in China. If the
Australian trade mark owner were to apply the trade mark to the
goods in China for which the Chinese trade mark is registered, the
use of the trade mark would amount to trade mark infringement.
As demonstrated by Apple's recent experience, the
consequences of failing to attain Chinese trade mark protection can
be significant and costly. Not only could one be prevented from
using the relevant trade mark in China, but the owner of the
registered Chinese trade mark could potentially request that
Chinese customs authorities seize and detain branded goods that
infringe their trade mark, preventing their import or export. Even
if the Australian trade mark owner only manufactures its products
in China and applies the trade mark to the goods in China as part
of the manufacturing process, the entire manufacture and supply
chain could be disrupted.
Given that it can take several years before a trade mark is
formally registered in China, it is essential that Australian
businesses that manufacture or sell goods in China apply to
register their trade marks in China at the earliest opportunity
– ideally, prior to commencing trade, or at the latest,
immediately upon doing so.
One of the more frequent mistakes made by Australian trade mark
owners is to assume that their Australian trade mark registration
provides a monopoly to use that trade mark around the world.
Registration of a trade mark in Australia only grants the owner of
a trade mark a monopoly to use that trade mark in relation to the
goods and services listed in the trade mark specification
in Australia.
If goods are manufactured or sold, or services provided, under a
trade mark in jurisdictions other than Australia, Australian
companies should consider seeking trade mark protection in those
specific jurisdictions.
Although it is possible to seek cancellation of a Chinese trade
mark registration on the basis that the relevant registration
violates Chinese Trade Mark Law, in our experience it makes more
sense to take pre-emptive and positive action rather than waiting
to respond to potentially costly issues as they arise.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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