Tackling Trademark Protection in China: Strategies Amidst High Application Volumes and Trademark Squatting Challenges

The landscape of trademark protection in China is marked by a consistently high volume of applications, with the year 2022 recording over 7.5 million filings. This significant figure underscores the importance of robust trademark strategies in a competitive market, especially in light of prevalent issues like trademark squatting. Understanding and implementing effective solutions against these challenges is crucial for businesses operating in or entering the Chinese market.

The High Volume of Trademark Applications in China

The number of trademark applications in China, exceeding 7.5 million, reflects the country’s status as a major global business hub. This high volume of applications presents a dual challenge for businesses: standing out in a crowded market and effectively protecting their intellectual property.

The Issue of Trademark Squatting

Trademark squatting, where entities register trademarks of well-known brands with malicious intent, poses a significant risk in China. This practice is particularly problematic due to the country’s first-to-file system, which prioritizes the rights of the first applicant over the original brand owner.

Strategies to Combat Trademark Squatting

Several effective approaches can be adopted to address trademark squatting in China:

1. Early and Comprehensive Registration

It’s crucial for businesses to file their trademark applications in China at the earliest opportunity. This includes registering not just the brand name but also logos, slogans, and other brand elements across multiple classes and categories for broader protection.

2. Market Monitoring and Enforcement

Regularly monitoring the market for potential infringements or squatting attempts is vital. This involves keeping an eye on new trademark registrations for similarities to your own and taking swift legal action against squatters when necessary.

3. Legal Recourse and Litigation

In cases where squatters have registered a trademark, pursuing legal action is a viable option. Chinese trademark law allows for litigation against bad-faith registration and infringement of prior rights, which can result in the cancellation of the squatter’s trademark and possible compensation for damages.

4. Collaboration with China Customs

Registering your trademark with China Customs can significantly aid in protecting your brand. This registration enables customs officials to seize counterfeit goods at the border, providing a strong defense against infringement.

5. Public Awareness and Strong Branding

Establishing a strong brand presence in China can help deter squatters. Public awareness campaigns and consistent branding efforts can solidify a trademark’s reputation, making it more challenging for squatters to successfully claim rights to it.

Understanding the Role of China Customs in Trademark Protection

Securing Your Trademark: The First Step

Securing a trademark in China is the initial and a crucial step towards brand protection. It establishes legal recognition of your brand, serving as the foundation for all subsequent protective measures.

The Pivotal Role of China Customs

Once your trademark is registered, engaging with China Customs becomes a key strategy. China Customs plays an instrumental role in preventing the entry and exit of counterfeit goods. By registering your trademark with them, you empower the authorities to inspect and seize counterfeit products at the border, effectively stopping illegal exports and imports that could harm your brand’s integrity and market presence.

Proactive Trademark Management

This proactive involvement with China Customs is part of a larger, ongoing trademark management process. It involves continuous vigilance, understanding the legal nuances in China, and actively working with government bodies to enforce your rights. Such measures ensure not just the longevity and authenticity of your brand in the dynamic Chinese market, but also safeguard your ability to export genuine branded goods from China.

While obtaining a trademark is a critical first step, the journey of brand protection in China is multifaceted. Engaging with China Customs is a central aspect of this journey, playing a significant role in combating counterfeiting and maintaining the integrity of your brand in the competitive Chinese marketplace.

Leveraging the Non-Use Cancellation Law for Trademark Protection in China

Foreign companies operating in China have a significant opportunity to protect their trademarks through the non-use cancellation law. This provision in Chinese trademark law is particularly beneficial in the context of the prevalent issue of trademark squatting. The law states that if a registered trademark has not been used for three consecutive years in China, it becomes vulnerable to cancellation.

This creates a strategic advantage for foreign businesses. They can monitor the market for any instances of their trademark being registered but not used by others, particularly by those engaging in bad-faith registrations. Once a period of three years of non-use has passed, foreign companies have the right to petition for the cancellation of these squatted trademarks.

This approach not only helps in reclaiming rights over their trademarks but also acts as a deterrent against potential squatters. Knowing that non-use can lead to cancellation, entities are less likely to register trademarks they don’t intend to use, thereby reducing the instances of squatting.

Additionally, the non-use cancellation law aids foreign companies in navigating the first-to-file system prevalent in China. Despite not being the first to register the trademark, companies can still secure their rights through this legal mechanism, provided the current registrant is not actively using the trademark.

In essence, the non-use cancellation law is a vital tool for foreign businesses in China. It offers a practical and legal pathway to challenge and potentially overturn trademark registrations made in bad faith, thereby reinforcing their brand protection in a challenging market.

Conclusion

In the face of a high number of trademark applications and the ongoing issue of trademark squatting in China, adopting a strategic and proactive approach is essential for brand protection. Early registration, vigilant monitoring, legal action, effective collaboration with authorities, and strong branding are key to navigating these challenges. By implementing these strategies, businesses can safeguard their trademarks and maintain a strong brand presence in China’s dynamic market.

 

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.

 

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.