How does the trademark system in China work

What distinguishes the Chinese trademark registration system from others? In addition to patent protection and copyright protection in China, how do you get the necessary intellectual property to protect your trademark in the suitable product classes? What are the different subclasses and categories of products and services that cover your company the best?

We will describe what makes China’s trademark system unique in this article and elaborate on the most critical aspects of the trademark registration process in China.

Due to its business growth, economic development, and improved Chinese law regarding the protection of intellectual property (IP), China has become an attractive market for foreign companies in recent years.

The Chinese government recognizes the importance of intellectual property as a part of the country’s development. They have taken numerous steps to improve the legal protection of IP in general.

Furthermore, foreign businesses recognize the significance of the world’s second-largest economy, which is also known for its copying and counterfeiting problems. In recent years, we have seen that foreign applicants have started to invest more in trademark protection in China.

By securing trademark rights in Mainland China on time, you can avoid legal issues in Chinese courts and have exclusive rights to your brand in China. The China Trademark Office can trademark your brand name, logo, or graphic device, as well as your brand in Chinese characters.

Filing principle in China: the first-to-file, first-to-register system

Companies selling their products or providing services in China must register their trademarks and protect their intellectual property rights to prevent others from obtaining trademark rights before them.

The China National Intellectual Property Administration (CNIPA) looks into whether earlier intellectual property rights are identical to those that will be protected as a trademark. Similar earlier rights can prevent a trademark from being registered later.

Keep in mind that China operates on a first-come, first-served basis. This means that if a similar mark has already been registered in China, you may not use your name in the country. Filing a trademark application in China as soon as possible is strongly advised to avoid a competitor or others obtaining trademark protection for your brand first.

Unfortunately, Chinese opportunists frequently attend trade shows and search the internet for international brands they believe will enter the Chinese market in the future to sell their branded products or services. These Chinese companies buy trademark rights because they know China’s first-to-file system in detail. In the Chinese first-to-file, first-to-register system, the later you file, the more likely your trademark will be rejected.

Many foreign companies are sued and forced to pay large sums to Chinese trademark owners to reclaim their trademarks. To avoid issues like these, we strongly advise you to register your trademark before considering entering the Chinese market or to do so immediately if you’ve already begun investigating it.

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If you are manufacturing but not selling in China, trademark protection is required

While most businesses agree to obtain trademark protection in China if they sell their goods there, many foreign companies fail to realize that trademark protection is also required if their goods are manufactured there. Trademarks in China also cover branded goods that are not sold but are manufactured in China.
Given China’s first-to-file system, obtaining trademark protection is highly recommended, even if branded products are not sold in the country. The trademark may be registered first by the product’s manufacturer. Furthermore, if the trademark is not protected in China, the exported goods may be seized by customs as counterfeit.

As a result, if foreign companies want to make products in China that will be exported to other countries, they will need trademark protection in China to avoid the problems mentioned above. You see the protection of your intellectual property as an addition to other tools you should employ, such as due diligence on Chinese companies, using China-specific contracts, identifying legal entities, and so on.

What is the best option for registering a trademark in China? Should you use international filings?

You can file a trademark in China in one of two ways: 1. international registrations: a WIPO filing in any third country plus a China-specific designation; or 2. national filing in China: a national trademark application in China with the China National Intellectual Property Administration (CNIPA).

While China has adopted the Madrid Protocol and the International Nice Classification, which divide goods and services into 34 and 11 categories, respectively, the Chinese trademark system has its own subclasses, each with its own product and service classification.

When doing international registrations, foreign companies’ lack of subclass selection often results in a trademark that does not adequately protect the goods or services. Due to procedural and subclass mismatching issues, WIPO filings addressed to China are frequently rejected. In many cases, no protection is granted even though a Chinese national application for the same mark would have received protection.

While China’s trade mark registration systems use the Nice Agreement’s International Classification of Goods and Services, the Chinese classes aren’t used anywhere else. This means that you will be restricted when filing an international trademark application. There might be product and service classes that you will not include in your application that you should protect according to the scope of your business activities and how these activities will develop in the future.

What is the trademark processing time in China? To complete the formal examination, approval through WIPO can take more than eighteen months. The trademark review process for China’s national filings, on the other hand, usually takes about six months. As a result, we strongly encourage businesses to file trademark applications in China.

Filing an international trademark application in China is more likely to be rejected due to non-standard goods descriptions. The accuracy of Chinese examiners’ translations of goods and services and the applicant’s lack of knowledge about new product types and service classes in the Chinese trademark system makes international applications the least optimal choice.

In conclusion, a national application gives you access to a wider range of products and services, as well as faster registration and the ability to change trademarks to lower the risk of rejection.

Other essential aspects of China's trademark system that you should be aware of

Other essential factors to consider when protecting your brand in China. A Chinese trademark does not protect Hong Kong, Macao, and Taiwan. Because the legal systems in these areas differ, obtaining trademark protection necessitates filing a separate trademark application.

If a trademark has not been used for at least three years without good reason in the three years following its registration, it may be subject to cancellation proceedings under Chinese trademark law.

Is it necessary to have a trademark in Chinese characters?

Because most Chinese people do not speak English and most sales activities in China are conducted in Chinese, trademark protection for a Chinese version of a western trademark is critical for companies selling products in China. This can be accomplished through translation, transliteration (a Chinese rendering of the original brand’s sounds), or creating a new name for the Chinese market.

Remember that a trademark in Roman characters does not automatically prevent others from using or registering a trademark in Chinese characters that are similar. Thus, for many companies, it makes sense to protect a trademark in both Roman and Chinese characters.

What to stay away from

You don’t want to manufacture a product in China and then sell it in other markets without protecting your trademark in China because you don’t sell your products there and falsely believe protection isn’t necessary. You risk infringing on others’ trademarks, being sued in China, having your goods seized by the Administration for Industry and Commerce (AIC), and being detained by Chinese customs if you do this.

You also don’t want to find yourself in a situation where you intend to sell your products in China and receive orders from a Chinese company while not protecting your brand. Your Chinese partner may be able to secure your trademark in China in this case, forcing you to spend a significant amount of money and time reclaiming it. You should avoid selling your products in China without confirming that another Chinese company is not using your brand name. The trademark owner may file a lawsuit as a result of this.

Do you need any legal help in China?

If you need help protecting your trademarks, copyright and patents and other legal help in China, please contact us here or send an email to janerik@ncbhub.com. We also offer background checks of Chinese companies, verifications of NDAs and contracts in China etc.

Contact us if you need help with drafting of contracts that follows Chinese laws and are enforceable in China, background investigation of Chinese companiesprotecting 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  or Milla Chen, at huimin.chen@ncbhub.com. We look forward to hearing from you and helping your business succeed in China.