China is one of dominant emerging markets in the world today. As South African trade with China grows, so does the risk that South African brands sold in that country could be appropriated by unauthorised Chinese companies or third parties.
It can take up to three years to secure a trade mark registration in China assuming no obstacles are encountered. A prior search of the trade mark register is recommended and if the mark is available, a trade mark application should follow.
This is not to say that the application process always goes smoothly. As in most other countries, a mark will be refused if it is too similar to an existing trade mark on the register. Visual similarities are of particular importance to the Chinese Trade Mark Office. Therefore if two marks are visually similar, representations to overcome the refusal will almost always be necessary.
Applicants will need to seek trade mark protection in the goods and service classes of relevance. China has also adopted the World Intellectual Property Organisation (WIPO) international classification system which makes provision for 45 different classes. Protection should be obtained in all relevant classes so as to avoid loopholes in trade mark protection.
Like a number of other countries, the Chinese adopt a first-to-file policy, which means that the party first-to-file becomes the holder of the trade mark regardless of whether or not they are authorised by the brand owner to do so.
Because of the popularity of branded goods being manufactured in China, counterfeiting is widespread and it is not uncommon for foreign brands to be opportunistically appropriated. More often than not, the encroaching party is a Chinese company which the rightful owner has appointed as its local agent.
The risk of a trade mark being usurped also tends to be higher in industries where competition is intense. An example relevant to South Africa is wine production. China is now purportedly the world's third largest wine producer and it is therefore not uncommon for unauthorised parties to register South African wine marks in China.
In these instances, the rightful proprietor would have to consider instituting dispute cancellation proceedings against the unauthorised party in order to have the unauthorised trade mark removed from the Chinese trade mark register.
But succeeding in dispute cancellation proceedings in China is an onerous task and it can take at least three years for a decision. The bottom line is that without adequate trademark protection in China, attempts to reclaim a brand can be laborious, expensive and sometimes unsuccessful.
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.