SOMEONE REGISTERED MY TRADEMARK IN CHINA!

By Richard Hoffmann,  ECOVIS Beijing

Before you even sell your products on the Chinese market, the first thing you should do is register your trademark. China operates a first to file policy, meaning if someone registers your trademark in China before you, it belongs to the earliest applicant and you have lost the rights to your brand.

Registering a trademark is not a costly but time-consuming process. The first step is a formality check which lasts 30 to 45 days. Next its extensive examination takes 9 to 12 months. Once approved, the trademark application is qualified for a 3 month public announcement. The trademark application will be finally approved if there is not any objection during announcement. The whole process can take more than a year but it is still more pleasant than proving malicious registration.

Malicious Registration- registration of a trademark in bad faith by a third party- is subjectively defined by Chinese law. The Trademark Adjudication Guidelines issued by the China Trademark Office and Trademark Review and Adjudication Board conclude some factors of malicious registration:

• The Applicant and the prior user of the trademark have had business contacts or cooperation;
• The Applicant and the prior user are in the same area or  have similar  distribution channels or territorial scopes;
• The Applicant and the prior user  have  had prior trademark disputes;
• The Applicant and the prior user have had internal personnel exchanges
• The applicant uses the registered trademark to tarnish the reputation of the prior, forces the prior user to do business with the applicant, or demands high licensingrate, or infringement compensationfrom the prioruser or others
• the other’s trademark has high originality
• The registered mark is a reproduction, imitation or translation of a client’s well known trademark that has not been registered in China in respect of identical or similar goods, which is likely to lead to confusion of customers.
• An agent or representative seeks to register their company’s trademark in their name without authorization of their company. It can be difficult to prove that an agent or representative registered your brand without authorization. In practice, the agent would rather let a related person, such as uncle, cousin, friend or whoever in another city register the trademark to ensure that you can’t or only hardly can prove the linkage.

Types of malicious registration

Trademark infringer can appear in different cases what we will explain herein further.

A trademark is considered “as well known” if it is already known in China. Starbucks or Apple might be well known, but most trademarks do not qualify. “Well-known” status has to be approved by an administrative and judicial authority.

What to do?

If this unlucky case happened and somebody registered your trademark in china the more important question would be: How can I fight this.You can protest a malicious trademark by:

1. Introducing your brand to prove “well-known” status of your brand in China. Awards, commercials, advertising media or social organizations recognizing that your brand can distinguish your brand from other marketers of the same line.
2. Providing authorities with copies of registration certificates of the trademark in foreign countries.
3. Evidence of use of malicious trademark usage in China before the application date of the mark in question. This includes product catalogues, ads, pamphlets, or invoices.
4. Evidence showing the malicious registration by the opposed party, such as cooperation records or business contacts between the opposed party and the opponent (if applicable).
5. If your trademark is specially designed by some person or has a specific meaning, please provide the design specification and the use proof for the first time.

You must protest in the three month time period after a trademark announcement. The trademark office will not accept protests afterwards. If you fail to submit a clear reason, fact or legal basis for an objection, your opposition will not be approved by the trademark authority

In the following case study we will explore a trademark infringement:

Case Study 1 – intentionally malicious trademark registration

Automob was not established in China, but sold their products through a wholesaler, W. Automob decided to fully enter the Chinese market and register their trademark. While registering they discovered W had registered their trademark but W had not yet obtained the trademark certificate. A applied for a trademark opposition in order to prove their brand. With the corporation certificate of Automob, signed power of attorney and certificate documents in other countries ECOVIS Beijing could successfully fight the malicious registration of W.

If the application for a malicious trademark fails, a firm can apply for the trade name if there is no other company registered. Trade name registration depends on the authorities, but Ecovis can help you to find out if the proposed trade name is available. There is a small chance though that the Chinese company will try to sue your company as you are using their trademark as your tradename, but in practice this is hard to prove and mostly unsuccessful. Overseas clients are usually present in other countries where proofing of the ownership is easier.

The trade name is a part of the company name. The company name contains the trade name, the location of the company either before the name or after mentioned in brackets, the industry, such as trading, consulting, manufacturing and the nature of the company. The trade name has to have Chinese characteristics.

If a company using a malicious trademark sues the originator of a trademark, the following case study explains how Ecovis Beijing can help:

Case Study 2 – unintentionally malicious trademark registration

ECOVIS Beijing helps Auto Motive to register their trademark; the application is rejected because someone else already uses a logo and design which is quiet similar. Auto Motive insists on using their design because they are already present in several other countries with the same logo. The malicious trademark was not infringing, it was just the same design, as the other company is producing a total different product. Auto Motive couldn’t apply for trademark opposition but other opportunities would be to buy the trademark from the Chinese company or register the trade name.

Ecovis would carefully advice you to register any trademark in China as soon as possible and even before thinking about entering the market. Adequate protection should be endured broadly in china and with a long term thinking regarding the immediate class for the product.

For any further questions please do not hesitate to contact us directly.

with contribution of Brigitte Both (ECOVIS Beijing)

	Richard Hoffmann is a Partner at ECOVIS Beijing China. Richard obtained an honor’s degree in law and worked in Germany, America and China for various prestigious law firms prior to joining ECOVIS. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV. Contact: richard.hoffmann@ecovis.com
Ecovis Beijing is the trusted tax and legal advisor of several embassies and official institutions in China. It specializes in mid-sized international companies and focused on tax & legal advisory, accounting and auditing. If you’re interested in finding out more about tax and legal, don’t hesitate to sign up to our Newsletter or give us a call  +86 10-65616609 (ext 811/806)   or contact us directly via Beijing@ecovis.com