4 benefits for foreign companies when registering their trademarks in China

Foreign companies can get a lot out of registering their trademarks in China. As China has become important in global markets in general, many businesses will at one time do business in China through manufacturing, distribution, and sales.

In this article, we will explain why the design of China’s IP litigation and the first-to-file system are important reasons why you should register your trademark and protect your intellectual property in China as soon as possible to avoid fake registrations and protect yourself from counterfeiting. As your business grows, you need to make a plan for your international trademark. Even if you don’t plan to do business in China, you should consider registering your trademark with the Chinese Trademark Office (CTO).


Because you want to be able to run a business in China

In today’s global economy, it is quite likely that many businesses, no matter how big or small, might do business in China one day. China has more than 1.4 billion people, so you may already have customers there.

When you think about manufacturing, distribution, and possible licensing deals, the chance that your brand will end up in China in the future goes up even more.

If you already have a trademark registered in your country, you know how vital its legal protections are. It’s important to remember that these protections only apply to problems that happen in your own country. To get international legal protection for your brand, you must register it in the countries you want to protect, such as China.

If entering the Chinese market is not in your business plan for a while, you may still want to start the process as soon as possible. So, when you are ready to grow, your trademark in China will also be prepared.

Brand owners also should remember that when registering a trademark in China, the China trademark system has its own product and service classes. To have effective trademark protection in China, you must protect the classes and product types that are most suitable for you. While you might already have obtained a trademark registration internationally, take a look twice to ensure that you are protected in the correct classes and that you have sufficient protection.


Because you want to protect yourself against registrations made in bad faith

China is a first-to-file country, unlike many other first-to-use countries. This means that trademark rights usually go to the first person to file a mark, even if they don’t use it yet or don’t plan to use it soon. This may help some new businesses that can’t show right away that they are using the mark in business, but it also makes it easier for people to register trademarks in bad faith.

When someone with bad intentions registers a trademark already being used by someone else, either in China or elsewhere, which is called trademark squatting. Their main goal is to make money from the registration by holding the trademark hostage and making the rightful owner pay a much higher price to get it back.

Unfortunately, there aren’t many ways for people whose trademarks have been registered in bad faith to keep them, because of the Chinese first-to-file system. Either file a challenge with the China Trademark Office, which can take a long time, or pay the current owner the ransom. Thus, the best way for a foreign brand to avoid trademark squatting in China is to be the first to register a trademark.


Because you want to stop others from making fakes

Selling fake goods is worth a trillion dollars, and most of these fakes are made in China. Having fake goods sold under your trademark is terrible because it costs a lot. From a weaker brand to lost sales, counterfeiting in China and around the world could have significant financial effects on your business. To keep control of the brand you have worked hard to build, you must register your trademark in China.

A Chinese trademark registration will protect you legally if a business or person uses your trademark to sell goods online in China. If you don’t have a Chinese trademark, getting these products taken down will be hard. After registering your trademark with the China Trademark Office, you can also register with Chinese Customs.

If the Chinese Customs find fake goods at the border, they will take them away and tell you what to do next. This is an excellent way to stop fakes from being made in China and other places where the goods may be sent.

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Avoid disputes and your branded goods made in China being taken away because you violate someone else’s trademark

China is a first-to-file jurisdiction for trademarks, meaning that if you don’t register your trademark, someone else could do so. Trademark squatters with bad intent will register the trademarks of foreign companies manufacturing goods in China and then hold those companies for ransom by threatening to seize their goods for trademark infringement. 

Export-only manufacturing in China usually involves trademark infringement. Even if you’re making a product in China to sell elsewhere, if you don’t register the trademark in China, you’re at a high risk of losing your brand name or logo to someone else in China and not being able to keep making your product there. Why put yourself in that much danger?


Trademark Registration in China

Whether you already have a business in China or want to start doing business there in the future, you need to begin the trademark registration process as soon as possible. Since it is a first-to-file country, the only way to protect against bad faith registrations and the expensive ransoms paid is to be the first to register your mark with the China Trademark Office.

Once you have a trademark, you should register it with Chinese Customs so they can keep an eye out for possible infringement and counterfeiting. This will help you control your brand and your company’s reputation.
Contact us right away to get started on the process of getting your trademarks registered in Chin

Contact us if you need help with drafting of contracts that follows Chinese laws and are enforceable in China, background investigation of Chinese companies, protecting patents, trademarks, verification of contracts to the law in China, or help with other legal challenges that you have in China.

If you require our assistance or have further questions about our services, please do not hesitate to contact our Customer Relationship Managers Jan Erik Christensen, at janerik@ncbhub.com . We look forward to hearing from you and helping your business succeed in China.

This article is provided for informational purposes only and is not intended to replace professional legal counsel. The information contained herein does not constitute legal advice and should not be relied upon as such. Reading this article does not establish an attorney-client relationship between the reader and the author or the author’s organization. Our website aim to provide general information for educational and communication purposes.