Thanks to a combination of low costs and enormous production
capacity, China has become the source-of-choice for brand owners
the world over. It can, however, be fatal to assume that simply
because your intellectual property is protected in South Africa,
the same applies as far as your production partner is
Before saddling up the Tiger, it is imperative that you interrogate
the critical IP-related issues involved in sourcing branded goods
Q: I source my goods from China. Is it necessary to protect
my trade marks in China? A: There are numerous instances of non-Chinese and Chinese
companies paying substantial amounts of money for registered brand
names/trade marks in China. For example, Apple is reported to have
paid in excess of US$3 Million for the iPhone trade mark in China.
If you plan to source goods bearing your trade marks from China it
is vital that you first protect your trade marks, before proceeding
Q: What are the practical benefits of registering my trade
marks in China? A: Registration can prevent someone from
"hijacking" your trade marks in China. Registration of
trade marks in China is the first step in the process of preventing
potential counterfeiters from manufacturing products bearing your
trade marks in China. Potentially, you could stop the
counterfeiting at the source rather than fighting counterfeit
problems in several different countries across the globe.
Q: What are the possible difficulties that I may face if I
do not protect my trade marks in China from an early stage? A: Someone may file trade mark applications and obtain
rights in your trade marks. This normally includes competitors,
factories, distributors, business partners and unrelated third
persons. Once a third person obtains registration of your trade
mark in China, you are potentially infringing another person's
trade mark rights. This means that the goods that you manufacture
in China may be seen as infringing goods or even counterfeit goods.
As a result, you may be prohibited from manufacturing/sourcing in
China – resulting in disruptions to your entire supply
Q: From a trade mark perspective, have South African
companies that source goods from China faced difficulties in that
country? A: Across all sectors, a number of South African companies
have faced difficulties in securing trade mark rights in China.
Certain companies have received a nasty surprise after sourcing
goods from their suppliers for several years, only to discover that
their trade mark is now proudly owned by someone else. In some
instances the trade mark is owned by someone who has a connection
with the former supplier but the relationship is difficult to
prove. Q: How long does it take to obtain a trade mark
registration in China? A: The average time from filing a trade mark application
to obtaining the trade mark registration certificate in China is
approximately two years.
Q: If my supplier obtains registration of my trade marks in
bad faith is there a remedy? A: You may be in a position to institute litigation on bad
faith provisions under the Chinese Trade Mark Law. However, bear in
mind that the cost of such litigation in China can be prohibitive
and the onus of proof is often difficult to satisfy. Q: Will one trade mark application cover China, Hong
Kong and Taiwan? A: No, separate trade mark applications must be filed in
each territory. As Taiwan (and to a lesser extent Hong Kong) is a
manufacturing giant in its own right, it would be advisable to
protect your trade marks in these territories as well.
These points cover the most important questions that should be
answered in order to ensure that your greatest asset is properly
protected, that risks are limited - and that your ride aboard the
Tiger is safe and profitable. Spoor & Fisher is well positioned
to assist you in protecting your trade marks in China, as well as
all other aspects of the venture involving intellectual
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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