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
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.
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