Navigating the complexities of the global economy, Original Equipment Manufacturing (OEM) providers must often grapple with potential trademark infringement, particularly in diverse markets like China. However, with proactive strategies, OEM manufacturers can significantly decrease the risk of being sued for trademark infringement locally. By planning ahead, they can also increase their likelihood of success in any disputes with local trademark holders before the People’s Republic of China (PRC) court. Here we share seven tips for OEM manufacturers to avoid trademark infringement in China.
1. Perform Complete Clearance Searches in China Before Starting Operations
Before commencing OEM operations, it’s crucial to perform thorough clearance searches in China. This process ensures that the brand is legally clear for use, even if it’s only intended for manufacturing purposes, thus avoiding potential legal challenges down the line.
2. Register Your Trademark in China as Soon as Possible
Given China’s first-to-file system, where those who protect a trademark or a patent first in China own it in China, early trademark registration for your brand is a crucial step. Securing your trademark registration early can provide a strong defense against possible infringement claims.
3. Avoid Direct Communication With Chinese Manufacturers or Marketing Activities Until Trademark Registration is Complete
Holding off on any direct communication with potential Chinese manufacturers, sharing information with them, marketing or promotional activities in China, or places where there are Chinese companies, like international fairs, is advisable in order to minimize the risk of infringement disputes until trademark registration is secured. Furthermore, no alterations or variations to the trademark used in Chinese manufacturing should be made during the time before the trademark registration is complete.
4. Actively Protect Your Brand Against Piracy
Constant vigilance is the price of brand protection. Regular monitoring of the trademark register and the timely submission of defensive trademark applications can help you stay one step ahead of potential infringers. After you have protected your trademarks, monitoring the Chinese market to see if other companies infringe on your intellectual property is essential. You should also register your trademarks and patents within the customs in China to prevent companies from sending products that infringe on your intellectual property out of China.
5. Maintain Extensive Records of the OEM Business
Keeping detailed records of all OEM operations can significantly aid in any future legal disputes. Being able to provide concrete evidence in support of legal arguments can often tip the scales in your favor.
6. Register Your Trademark in Multiple Classes and Sub-Classes Directly in China
To ensure broad protection, register your trademarks under multiple classes and sub-classes. China uses the Nice Classification system, classifying goods and services into 45 classes. But China has its sub-class system, with products and services unique to the Chinese system. It is vital to apply for the protection of trademarks directly in China to get a faster application and more comprehensive protection. Because trademark applications directly in China give more comprehensive protection in China, you will also get better protection against unexpected infringements.
7. Implement Clear Contracts with Local Partners
Contracts with Chinese distributors, suppliers, or partners should clearly state that they must respect your intellectual property rights. A well-crafted contract can provide an additional level of security. The contract should use China as jurisdiction, be adapted to Chinese laws, and use Chinese to ensure enforceability in China.
Do not use standard contracts that are not adapted to the laws in China, as this seldom gives any protection in China and might, on the contrary, break laws in China.
In the vast and complex Chinese market, OEM manufacturers can face myriad challenges. However, armed with proactive strategies, thorough planning, and an understanding of the Chinese legal landscape, these manufacturers can effectively navigate the risk of trademark infringement, ensuring their operations run smoothly and successfully.
Contact us if you need legal help in China, like drafting contracts that follow Chinese law, background investigation of Chinese companies, protecting patents, trademarks, and verification of contracts to the law in China, etc.
If you require our assistance or have further questions about our services, please do not hesitate to contact our Customer Relationship Manager, Jan Erik Christensen, at firstname.lastname@example.org. We look forward to hearing from you and helping your business succeed in China.