Hong Kong: Intellectual Property - What IPRs are Protected in China? - Trade Marks, Busines

Last Updated: 1 May 1996
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

FURTHER INFORMATION on the above may be obtained via Linklaters & Paines Hong Kong office or via any of the other nine Linklaters & Paines offices world-wide, located in Singapore, Tokyo, London, Brussels, Paris, Frankfurt, New York, Washington D.C. and Moscow. Contact details for the various L&P offices worldwide are available via the Linklaters & Paines corporate listing c/o Business Monitor Online - http://www.businessmonitor.co.uk

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