Some brand owners don’t register their trademark and other intellectual property in China because they assume that a trademark registration in Europe or the US will provide some protection. But, as a recent article in Utah Business 1 argues, a registration outside China does not provide any rights to use a mark within China, although recent changes to the legislation might offer greater protection.
While companies of all sizes are increasingly doing business in China, many neglect to protect their brands there, leaving them exposed to trademark ‘squatting’ – a situation in which a person or organisation other than the original brand owner knowingly registers a trademark with the intent of profiting from the real brand owner’s goodwill.
According to the article, China is a first- to-file jurisdiction, meaning that the first person to file a trademark will be awarded exclusive rights in that mark. This policy provides squatters with an opportunity to rush to register foreign trademarks before the original brand owners have an opportunity to do so. The squatter can then leverage the bad faith registration to seek a payment from the true brand owner.
Until recently, China’s trademark laws did not include an explicit requirement for use in commerce. As a result, applicants filed thousands of applications with the intent of brokering the registrations and not to actually use the marks in commerce. China recently revised its trademark laws to combat these bad faith trademark registrations. The amendments provide the Chinese Trademark Office with the ability to reject applications that are not made for the purpose of using the trademark in earnest.
While new revisions to China’s trademark laws might place brand owners in a better position to fight bad faith registrations, it remains difficult to oppose an application or invalidate a registration based on bad faith. With the new laws, the Chinese Trademark Office may be more willing to consider other factors, but it remains unclear whether the amendments will significantly reduce the heavy burden of proving bad faith.
Of course, the best way to protect your trademark in China is to register your mark there as early as possible, and if you file for registration in China within six months of your US trademark application (for instance), you can claim your US priority date as the priority date in China.
Another piece of advice from the article considers China’s amended trademark laws that specifically allow defensive trademark filings to preserve space for future business and advises you to file as broad an application as possible. Include not only the goods and services that you currently offer, but also any that you might offer in the future in classes that surround your core business.
1 - www.utahbusiness.com/brand-protection-in-china-beware-of-trademark-squatting/.