Significant amendments recently made to trade mark laws in China have streamlined the filing process and improved the position of brand owners.
If your organisation has not yet sought formal protection of its trade marks in China, here are some key reasons to build this into your intellectual property, brand protection and overall business strategies.
- First to use doesn’t guarantee ownership of your mark!
China is a “First to File” country. Unlike Australia, where it is possible to claim ownership to a trade mark by relying on first use of the mark (prior to the filing date), in general, the owner of a trade mark in China will be the first person to file an application. As a consequence, in China it is possible for an unauthorised person to obtain rights over your trade mark even where you may have sold or manufactured goods in China for a number of years.
- Use of your own mark might carry an infringement risk!
If an unauthorised person does register your trade mark (or a similar trade mark) this may form the basis for them to bring a claim against you for infringement – even though you may have used your mark for many years!
Statutory penalties for trade mark infringement have also been increased significantly (from RMB 0.5 million to 3 million). This is good news if you have registered your trade mark in China, but not so good if you are facing an infringement action initiated by another party.
- Customs seizure
Any person who registers a trade mark can use this as the basis for a Customs Seizure Notice. This allows Customs Officials to seize goods bearing the registered trade mark which are either being imported into or exported out of China.
Goods that are manufactured in China for export to other countries can also be seized as they are transported across the border. If you are the trade mark owner this provides a potentially useful tool to protect against misuse of your mark, but if an unauthorised person has secured your mark it may cause serious difficulties in the export of your legitimate products for sale outside the country.
- Easier challenges based on the new requirement for ‘Good Faith’
The recent amendments to the Chinese trade mark laws include a new requirement that applications for registration of a trade mark be made in good faith. It is now possible to challenge applications filed by third parties on this basis if you can establish that the applicant was most likely aware of your trade mark prior to filing their application. This should assist brand owners to take on unauthorised applicants. Regardless, being the first to file in China will still provide a significant advantage for brand owners.
- Faster processing times
The amendments to Chinese trade mark law include the introduction of statutory time limits for certain actions of the Chinese Trade Mark Office (CTMO) and the Trademark Review and Adjudication Board (TRAB). Examination should now occur within 9 months of filing and a trade mark opposition should be determined within 12 months.
Removing the right of an opponent to appeal an unfavourable decision issued by the CTMO also now means that unsuccessful opponents can no longer delay the registration of a trade mark for many years by filing an appeal with the TRAB (at first instance) and then the Courts.
- Multi-class applications now available
It was previously only possible to file single class applications in China and, if you wished to protect your trade mark for a wide range of goods and/or services, it was necessary to file multiple applications.
It is now possible to file multi-class applications in China making it easier and more cost effective to develop and maintain a trade mark portfolio in China.
What are the filing requirements for China?
There are a number of requirements to file an application for a trade mark in China:
- The applicant must provide a power of attorney and, where a company, a copy of its certification of incorporation (or certificate of good standing)
- The applicant’s name in Chinese characters must also be provided at the time of filing. If this is not known, a Chinese translation must be prepared
- If your trade mark consists of or contains an English word, it is prudent also to consider filing a separate application for the Chinese version (i.e. in Chinese characters) and/or a Chinese transliteration
Registering copyright in your logo trade marks can also assist with preventing unauthorised use of your brand and should be considered at the time of filing.
Evidence of trading activity or use in China is not required to gain registration. However, once a trade mark has been registered for 3 years, it may be vulnerable to cancellation for non-use.
Key points
- Formal protection in China is becoming increasingly important for participants in both the Chinese domestic market and for manufacturers and exporters
- Remember it is ‘first to file’ in China so first movers will hold the upper hand
- More grounds now exist to challenge unauthorised applications for protection
- Changes to the law and procedure are making filing in China faster and more efficient
Please contact us if you would like more advice to assist in development of a trade mark or other intellectual property protection strategy in China.