China presents some unique difficulties for foreign
trade mark owners. The subtle differences between the IP systems
applicable in many western countries and Chinese law have caused
much consternation and frustration.
China practises a "first-to-file" trade mark system.
This means that the person who first
applies for registration of a trade mark in China will prevail over
a person who is first to use the same trade mark in China
regardless of the fame or reputation of that mark outside of
This "first-to-file" system has created, and continues
to create, distress for those who are unaware of the Chinese
system. This is especially the case for companies located in a
country which practises a "first-to-use" trade mark
system, where, as the name suggests, the first person who actually
uses a trade mark would be the owner of the trade mark. For
example, when a company has invested significant time and energy to
arrange for the sale of a certain branded product in China, they
may then discover that someone has already registered that brand as
a trade mark in China. The "first-to-file" system means
that instead of being the owner of that brand in China, the company
may face a potential infringement issue.
The trade mark system in China does have a provision to prevent
"famous" trade marks from being "grabbed" by
unrelated parties, such as trade mark squatters. However, recent
cases show that it is very difficult to establish sufficient
"fame" to an examiner. It is a subjective assessment and
the bar seems to be very high.
Three recent decisions involving Facebook, iPhone and Weixin
illustrate these points and the challenges faced by trade mark
owners in China:
iPhone: A third party filed for "iphone" in relation
to "leather goods". This would cover accessories such as
tablet covers. In this case, the court considered that iPhone was
not well known in China before the filing date, thus the
registration stands. In other words, Apple cannot use
"iPhone" to sell leather goods in China.
Weixin ("Wechat"): Weixin is an instant messaging
service developed by Tencent (a major Chinese company) and enjoys
active users of 650 million per month. A third party filed for
"Weixin" in relation to "communication
services" and Tencent opposed registration. At first court
instance, the Court decided that public interest trumps the
interest of the Applicant. On appeal, the High Court chose a
different reason, ruled that "Weixin" was descriptive in
that "Wei" means "small" or "little",
and "Xin" means "letter", "message"
or "communication". Thus, the third party's
application was rejected. While not spelt out, it can be construed
that Tencent now owns the mark through sufficiently wide use.
Facebook: A third party filed for "face book" in
relation to "fruit juice beverages". While the use of
Facebook is banned in China, the court considered that Facebook had
sufficient prior reputation in China to be considered
"famous", thus the first filed "face book" in
relation to "fruit juice beverages" by the third party
It is not easy for us to reconcile these decisions. There does
not appear to be a consistent application of legal principles that
would lead to a predictable outcome. As said above, we must
remember that China is not a common law country and thus earlier
court decisions, while being able to assist one in understanding
laws and regulations in China, would not set precedence that is
always required to be followed by subsequent courts.
It is our strong recommendation to always file as soon as
possible and to seek strategic legal advice for trade mark planning
in China. Under a "first-to-file" system, it is necessary
to get in early. If someone has already registered your mark, it is
most important to discuss your options with a legal advisor to
assess risk and consider available strategies.
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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