<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=780236292101201&amp;ev=PageView&amp;noscript=1">
Blog Why Is China Trademark Registration Crucial For Foreign Companies?

Subscribe to the Blog

By checking the box below you consent to receive marketing communications from Hongda. Your data will be stored securely and not shared with third-parties. If you would like to manage your subscriptions please do so in the email that will follow.

Why Is China Trademark Registration Crucial For Foreign Companies?

by Bobby Lee | 05 April 2016

Why Is China Trademark Registration Crucial For Foreign Companies? 

China trademark registration is a different beast to that which you're accustomed to abroad.

As a foreign company who either has a functioning Chinese branch, or is considering starting a business in China soon, you must register your trademarks here too.

But if we already own the rights to our intellectual property and trademarks around the world, why must we go through the rigmarole and cost of registering trademarks separately in China?

A lot of this has to do with China's trademark laws, so let's dive into this and find out the truth about trademarks in China here...

Why China Trademark Registration Is Necessary

China operates a 'first-to-file' trademark registration system. Basically this means that unregistered trademarks are not recognised by the Chinese authorities, and can usually be registered by any individual or organisation if currently 'vacant.'

This offers foreign companies two big problems:

  1. If you are seeking to trade within China you may be forbidden from using your own trademarks
  2. If you're manufacturing in China only for export, your goods could be seized by customs for breach of trademark law

If this happens you can offer to settle with the local trademark holder to regain your own trademark, pay them a regular licensing fee in order to use 'their' trademark, or fight it out in court (which could take years).

Is it a fair system? Arguably not. However in China, we must often just accept the system for what it is, and try our best to operate efficiently within it.

 

Download our FREE eBook "An Introduction To China Trademark Registration" and learn why and how to protect yourself when doing business in China.

 

Can We 'Get By' Without Registering Our Trademarks In China?

the risk of not registering China trademarks

Absolutely not.

When starting a business in China, registering trademarks here is a crucial part of the process.

Given that a company's IP is the backbone of who it is, we should not take the above news lightly.

Consider 'Nike' sports shoes. As consumers we know that this brand offers us high quality, modern design, great performance, and fashionable styles. Do we pay a premium for them? Yes. But we're prepared to do that knowing that we're getting the best on the market.

But what happens if, in China, other companies start producing inferior sports shoes using the Nike brand name? This would damage the brand, its reputation, and its ability to price its products at a level befitting their quality.

Of course, Nike has registered its trademarks in China (although its subsidiary 'Jordan' has fought, and lost, a very long and expensive court case over a perceived breach of trademark usage by Chinese company 'Qiaodan'), but if it hadn't, this shocking situation could actually have come to light.

Here are the companies' logos:

air jordan vs chinas qiaodan

Qiaodan also happens to be the Chinese translation of the name 'Jordan,' but since it had been operating unopposed for several years before the true Jordan brand raised its claim the Chinese authorities allowed it to continue trading.

Thus today we see both Qiaodan and Jordan sports shoes for sale in the same sports stores here in China, and no, the Qiodan shoes don't even look very different (as you can see below) yet there is nothing Jordan can do:

qiaodan sports shoes

 

>> Tweet this blog post to your followers <<

 

So What To Do?

undertake china trademark registration

You first need to ascertain what you're going to need to register as trademarks.

The point of China trademark registration is to firstly head off any problems arising from others 'squatting' your trademarks (registering them ahead of you), and secondly to be able to manufacture or trade in China with complete peace of mind. >> Tweet This <<

Typically you should consider registering:

  1. Your trademark in Latin characters (such as your English trademark)
  2. The direct Mandarin Chinese translation of this name
  3. Your logo
  4. Any very similar Chinese words or names that you may use, or would like to prevent being used by others

The Mandarin Chinese version of your main trademark, such as brand name, is the key trademark to register as it is the one most likely to be recognised, used, and spoken about in China itself. It may be that you would require local assistance to translate this, and it's also necessary to do a search in order to see if the option/s you plump for have already been registered.

Once you're good to go you can either:

  • Register your own trademarks if you're already a functioning Chinese company (although this means handling all of the documents and procedure alone which is completely in Chinese, complex, and extremely bureaucratic)

    Or
  • Outsource your registration to a licensed agency within China, such as Hongda Business Services, who will handle it for you (this is necessary if you have yet to set up a Chinese company, but are trying to pave the way for your venture by registering trademarks in advance, which of course is highly recommended)

 

Recap: The Truth About Trademarks In China

Don't operate in China without registering your trademarks here if you have intellectual property which, if squatted by others, could lead to damage for your business.

The truth about trademarks in China is that not only SMEs face this problem, as even larger and wealthier companies have been caught out in the past, as the Jordan example illustrates.

The best thing to do is, as soon as you know you will be coming to China to trade or manufacture, is to begin the China trademark registration process immediately from wherever you are abroad. You can wait until you're in China, but since the entire process takes Hongda's experts around 18 months and could take up to 2 years for others, it may be too late by then.

Do you have any questions or comments about registering trademarks in China?

Have you already done so, or are currently under threat because of trademark issues?

Please let us know by leaving your thoughts below!


 

An Introduction To China Trademark Registration eBook

Topics: Chinese Trademarks

Bobby Lee

Bobby Lee

Helping make China companies easy since 2007 as a Senior Consultant

Comment: