How China Trademark Licensing & Customs Recording Protects Your IP

We've written before about the risks of your Intellectual Property such as trademarks being used with your permission in China and that hasn't changed.

No matter whether you're manufacturing your products in China, or importing products to China to sell here, registering your trademarks in China is a must. This is because foreign trademark filings aren't always accepted in China and China is 'first-to-file' meaning that someone else could have registered your trademark and be using it legally here in China without your knowledge.

Now, let's assume that you have registered your trademarks here already. That's good practice. But there's more you can do to protect your interests, such as trademark license filing and customs recording. Let's explore them...

China Trademark License Filing

Trademark license filing is where you, the trademark registrant, legally permit others to use your trademark.

They will sign a trademark license contract which will be filed in the China trademark office.

An example of this would be a foreign soft drink brand that works with a Chinese partner who licenses their trademark in order to produce and sell the soft drinks in China for the Chinese market. Of course, the Chinese partner pays to use the trademark under license and there may be other financial arrangements made such as a percentage of any profits being granted to you.

If your trademark is going to be used by someone else, this is a great way to legalize the relationship rather than it being used without your permission which is damaging to your brand and bottom line.

Benefits for you

• Instead of a Chinese company using your trademark without permission, the arrangement is legal and recognized by all parties and the government.
• The trademark holder is paid for the use of their trademark under license.
• The permission to use the trademark either expires or may be revoked, so the trademark holder retains control over their IP.

Requirements to set up trademark license filing

You'll need the following in order to set up license filing:

1. Trademark registration certificate with a scanned copy
2. Scanned copy of your business license 
3. Trademark license contract with a scanned copy
4. Registration form of the trademark license contract
5. Passport of your company's legal representative with a scanned copy
6. Power of attorney 

How long does it take and what does it cost?

Hongda can handle the entire trademark license filing process for you as it's all in Chinese. It takes 6-8 months and costs 5,800RMB (approx. US$900).

How to license your trademark with a partner?

Now that you have prepared your trademark to be licensed, this is the process you'll go through with a new partner:

1. Sign a trademark license contract with your partner
2. Complete an Application form for a trademark license
3. Submit trademark information to be recorded by the Trademark Office
4. They will examine the trademarks
5. They will issue the trademark license record certificate
6. Your partner can now use your trademark under license

Trademark Customs Recording

Trademark Customs recording is a very useful mechanism for controlling the usage of your trademarks and alerting you to when they may be being used with your authorization. It is where enterprises or business operators put their record their trademarks with the China customs General Administration.

Following this, every time goods with your trademark clear customs when being exported from China you will receive a written notice from the local customs to confirm whether the goods are being sold by the trademark holder (or license holder).

If it is confirmed that the trademark or license holder has not sold this batch of goods, someone is making unauthorized use of the trademark and the customs will seize the goods on the spot.

Even if you are unlucky enough that someone 'fakes' your product and trademark, going through this process will provide additional protection by customs that will weed out any copycats. This is helpful for manufacturers of 'hot' new products in China.

Benefits for you

• Copycats are deterred from stealing your IP.
• Customs all over China can be included in the scope of supervision.
• Your brand is protected.
• Fake products are less likely to reach your market and be sold in competition to your own.

Requirements to record your trademarks with the China customs

You'll need to gather the following to record your trademarks with customs:

1. Scanned copy of your business license
2. Passport of the legal representative with a scanned copy
3. Trademark registration certificate
4. Certificate of trademark transfer and renewal (if possible)
5. Power of attorney
6. Trademark logo
7. Product photos with trademark pattern
8. Product description
9. Basic information of contact person: name, contact number, email, etc.

How long does it take and what does it cost?

Hongda can also handle this process for you as it is all in Chinese. The process takes 2-3 months and costs 5,800RMB (approx. US$900).

How to record your trademarks when ready?

1. Submit the above materials to the General Administration of customs for their acceptance
2. The General Administration of Customs will examine the materials
3. If they are satisfied that the correct information has been provided they will record them and confirm it to you

Conclusion

If you have trademarks and manufacture products in or import them to China, register your trademarks ASAP.

Once the trademarks have been registered license filing provides you with a legal and secure way for partners to use your trademark under paid license which protects your business from trademark theft.

Furthermore, recording your trademark with customs will mean that they check the authenticity of any goods bearing your trademark passing through customs out of China and will impound anything that is using it without your permission.

The cost of these two actions is far outweighed by the benefit to your brand if you're serious about protecting your IP in China!