China: File Your Trademark In China Before Others Do

While the United States grants trademark rights generally upon the first party to use a trademark in commerce, China adopts the First-to-File doctrine, which means it grants trademark rights to the party that first applies to register the trademark. Who would register your trademark? They could be your competitors, employees, distributors or contractors!

While the United States grants trademark rights generally upon the first party to use a trademark in commerce, China adopts the First-to-File doctrine, which means it grants trademark rights to the party that first applies to register the trademark. As there is no requirement to produce any evidence of prior use in order to file the trademark in China, quite a few famous foreign marks have been filed by third parties in China. Except the ¹Individual Industrial and Commercial Households, the China Trademark Office (CTMO) has ceased allowing Chinese individuals to register trademarks, the problem has not gone away; companies and foreign individuals may still file trademarks in the same manner, and these companies and foreigners could be your competitors, employees, distributors or contractors!

Recently my firm got a call from a US company ("Company") which claimed that both its English trademark and the Chinese translation had been "stolen". After some investigation, we found that it was their own distributor in China ("Distributor") that had filed the trademark -- and just a few weeks they signed their distribution agreement, no less. A few years later when the Company tried to terminate the distribution agreement and engage a new distributor due to the original Distributor's poor sales performance, in order to force the Company to continue the distribution agreement, the Distributor informed Company that it was Distributor that in fact possessed Company's trademark in China, and that Distributor would try to stop others from using this trademark in China. Although the Company well understood that this case could definitely be resolved successfully for them through ²trademark disputation, ³non-use cancellation or infringement litigation, after considering the cost-time litigation calculus, they chose to settle by purchasing the mark. To the Company, not only did they get the mark back finally, but they obtained greater time for expediting their expansion into the Chinese market.

How to Stop a Third Party from "Stealing" Your Mark in China?

The answer to the above is quite simple: register it before they do!

Questions to consider:

• Is China a (potential) market for your company?
• Will you manufacture your products in China?
• Will you be outsourcing in China?
• Will you bring your products to the Chinese trade shows?

If your answer to any of the above questions is "Yes", please keep reading the rest of this article.

Now the question is how to register a trademark in China?

Step 1: Engage a Chinese Trademark Attorney

⁴As with patent registration, foreign parties must use the services of approved Chinese agents when submitting the trademark application, however, foreign attorneys may help to prepare the application documents.

Step 2: Develop and Design Your Trademarks

Besides the foreign language marks (English marks) and the logos, foreign companies should develop a Chinese language version of the trademark. If you do not create a Chinese mark, the market will create a Chinese name for your product anyway, and it will take more of your time and money to change it later if you do not like the image this Chinese mark stands for.

Step 3: Choose the Goods/Services and the Classes

China uses the International Classification of Goods and Services for the Purposes of the Registration of Marks (Nice　Classification), which categorizes goods and services into 45 classes - 34 for goods and 11 for services.

There 2 major differences between Chinese trademark system and the US system:

• There are sub-classes in the Chinese trademark classification system. A trademark owner cannot stop third parties from filing a certain mark in sub-classes under the same class in which the trademark owner has not filed. (Under certain circumstances exceptions do exist.)
• Usually the goods/services names are chosen from the "Classification Table of Similar Goods and Services". If the applicant submits a descriptive statement instead, CTMO may require the applicant to correct the unclear contents and return the application to them within 30 days. If correction is not carried out within the time limit, the application will be deemed abandoned. However, a descriptive statement is allowed under the US trademark law.

Step 4: Application for Priority Registration

If, within 6 months of the date on which an applicant for trademark registration first applies for registration of the trademark in the USA, the applicant applies for registration of the same trademark for the same goods in China, this person shall be entitled to a right of priority. The applicant shall submit a written declaration when submitting his application for trademark registration and, within 3 months, submit copies of trademark application documents certified by USPTO.

Presently, the time required for registration (from initial filing till approval) is approximately 1.5 years in China provided that there is no rejection or opposition – this is quite an improvement over the minimum 3.5 years it took before.

Finally, you should also consider registering the equivalent Internet domains and your trademarks throughout the other jurisdictions of "Greater China," including Hong Kong, Taiwan, Macao both for purposes of potential expansion and to block others from registering marks to use on products consumers may confuse with yours.

Footnotes

1. Article 2 of Administrative Measures for the Registration of Individual Industrial and Commercial Households provides that citizens with operation capacity may legally conduct business operations after being registered at the administrative departments of industry and commerce and obtaining the business licenses for individual industrial and commercial households.

2. Article 41 of PRC Trademark Law (2nd Revision) provides that Registered trademarks that violate the provisions of Article 10, 11 or 12 hereof or for which registration was obtained by deceptive or other improper means shall be cancelled by the Trademark Office. Other work units or individuals may request the Trademark Review and Adjudication Board to rule to cancel such trademarks.

If a registered trademark violates Article 13, 15, 16 or 31 hereof, the owner of the trademark or a materially interested party may, within five years of the date of registration of the trademark, request that the Trademark Review and Adjudication Board cancel the registered trademark. However, the owner of a well-known trademark shall not be subject to such five year time limit if the trademark was registered in bad faith.

3. Article 44 of PRC Trademark Law (2nd Revision) provides that the Trademark Office shall order rectification within a specified period or cancel the registered trademark in case of any of the following acts in respect of the use of a registered trademark: (4) suspension of use for a continuous period of three years.

4. Article 10 of PRC Trademark Law (2nd Revision) provides that any foreigner or foreign enterprise intending to apply for the registration of a trademark or for any other matters concerning a trademark in China shall entrust any of such organizations as designated by the State to act as his or its agent.

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.