Zhou Bohua, retired Minister of the State Administration for Industry and Commerce (SAIC) in 2010 said it is thanks to the Chinese government’s positive approach to the trademark system, all-encompassing implementation of trademark strategies, increased public awareness of trademark issues, more efficient trademark examination, and stronger confidence in the system on the part of trademark applicants, that China has seen a sharp increase in the number of applications for trademark registration (Wipo Magazine, 2010).
The rights of use of a trademark are valid only in the territory of the State in which the registration was made. Given the value and importance that a trademark can have in determining the success of a product, it is in the company's interest to register the trademark in all exporting countries or in which it intends to license its trademark.
Before talking about this topic, it is necessary to give an overview about intellectual property rights. The World Trade Organization website (2021) provides a definition of intellectual property rights (IPR). IPR are the rights given to someone over their creations; they usually give the creator an exclusive right over the use of his/her creation for a certain period of time. Intellectual property rights are typically divided into two main areas:
1. Copyright and Rights Related to Copyright: the rights of authors of literary and artistic works (such as books and other writings, musical compositions, paintings, sculpture, computer programs and films). Also protected through copyright and related (sometimes referred to as “neighbouring”) rights are the rights of performers (e.g. actors, singers and musicians), producers of phonograms (sound recordings) and broadcasting organizations.
2. Industrial property can usefully be divided into two main areas. One area can be characterized as the protection of distinctive signs, in particular trademarks (which distinguish the goods or services of one undertaking from those of other undertakings) and geographical indications (which identify a good as originating in a place where a given characteristic of the good is essentially attributable to its geographical origin). Other types of industrial property are protected primarily to stimulate innovation, design and the creation of technology. In this category fall inventions (protected by patents), industrial designs and trade secrets.
A translation from the China IPR SME HELPDESK guidelines (2018) helps understand what a trademark is. It is a sign that has the specific and primary purpose of identifying products or services of a manufacturer, thus allowing consumers to distinguish the products or services of one manufacturer from those of another one. The sign can be made up of words, devices, letters, numbers, 3D signs (shapes), colors combinations, sounds or any combination of these elements.
China's Intellectual Property Journey
In 30 years, since China joined the World Intellectual Property Organization (WIPO), the country’s progress in the field of intellectual property (IP) has been remarkable. Today, China has one of the top five patent offices in the world and hosts the world’s largest trademark office. It has made historic advances in the development of its copyright system and is home to a vibrant creative sector (Wipo Magazine, 2010).
Commissioner Tian Lipu of the State Intellectual Property Office of China (SIPO) talks about the evolution of the Chinese patent landscape offering his perspective on China’s IP journey (WIPO Magazine, 2010). Prior to 1980, the year in which China joined WIPO, the concept of IP was almost unknown in China, and the value of intellectual assets had yet to be recognized. However, thanks to the determination and unremitting efforts of the Chinese people, a sound IP system – compatible with China’s development needs and consistent with international rules - has been established at an unprecedented pace. Talking about rules, the Trademark Law of the People's Republic of China, or Zhōnghuá rénmín gònghéguó shāngbiāo fǎ (中华人民共和国商标法), was adopted on August 23,1982; and has been amended four times: February 22, 1993; October 27, 2001; August 30, 2013; April 23, 2019. It states that trademark registration must comply with the following requirements (Lawinfochina, 2014):
Art. 9: The trademark for registration shall be distinctive for easy identification, and may not be in conflict with any prior legal rights acquired by others. A trademark registrant shall have the right to use the words “registered trademark” or a sign standing for registration (®).
Art. 10: The following signs may not be used as trademarks:
A sign identical with or similar to the name, national flag, national anthem, military emblem of the People's Republic of China or identical with the name or symbol of a central state organ, the name of a specific place where it is located, or the name or design of its landmark building.
A sign identical with or similar to the name of an international intergovernmental organization, except as permitted by the organization or except that it will usually not mislead the public.
A sign identical with or similar to an official sign or an inspection mark which indicates control or provides guarantee, except as authorized.
A sign identical with or similar to the name or sign of the Red Cross or the Red Crescent.
A sign bearing ethnic discrimination or detrimental to socialist morality or having any other adverse effect.
A sign which is deceptive and easily misleads the public regarding the quality or origin of goods.
National vs International Registration
The Italian Trade Agency accurately explains how to register a trademark in China (ITA website, 2021). It is possible to choose between two systems: International Registration, through the World Intellectual Property Organization (WIPO); and National Registration through the Chinese Trademark Office (CTMO).
Applicants may apply for national trademark registration through a legally formed trademark agency in China which will send the application to the CTMO which, in turn, will carry out a preliminary check on the compliance of the trademark with the legal requirements and the non-identicality of the trademark with others already registered. This preliminary check must be completed no later than 9 months after the filing of the application. If the preliminary examination is successful, the CTMO will proceed with the publication of the trademark in order to allow third parties to file any objections to the registration. If no opposition is received by third parties within 3 months from the publication of the trademark, the CTMO will approve the application and issue a certificate certifying the registration of the trademark.
Applicants aiming for international registration must contact the national trademark office of their country of origin, which will forward the file to WIPO. The application for international registration must be in English, French, or Spanish. WIPO will conduct a formal compliance review and notify the application to all Madrid Protocol countries’ members (China is part of the Madrid Protocol) specified in it. If within eighteen months from the date of notification made by WIPO to China, no objection is raised by the Chinese Patent and Trademark Office, the trademark will also be officially registered in China. But if objections arise, then a local Chinese trademark consultant should be contacted in order to deal with the situation.
The main differences between the two systems thus include (1) coverage, (2) application language, and (3) certificates. Regarding coverage, the minimum tax for the international system covering more than one country at the same time and up to three classes of products or services. Under the Chinese national system it is possible to submit both a separate application for each class and an application for multiple classes. As for the application language, English, Spanish, or French must be used when opting for the international system. However, if the national system is followed, the application can only be submitted in Chinese. Foreign companies must therefore contact a local trademark agent. Lastly, regarding certificates, it may be more convenient to apply through the Chinese national system. In this way, it is possible to obtain a trademark certificate written in Chinese which can be useful for undertaking any protection action in China, and will speed up procedures with local authorities. If the international system is used, however, it will be necessary to request a certificate in Chinese from the CTMO, which could take up to three months to issue (China IPR SME HELPDESK guidelines, 2018).
What Should Companies Consider before Regisstering a Trademark in China?
The first step is considering the cost: according to the Chinese national registration system, the cost of registration is 800 RMB plus the fees of the lawyers, up to 10 articles, plus 60 RMB for each additional article.
According to Chinese Trademark Law, it's also important to keep in mind the duration of the validity: the Chinese national trademark registration and the international trademark registration are valid for 10 years and can be extended for another 10 years. However, the renewal application must be submitted within 6 months before the deadline.
Furthermore, there are many classes and subclasses of registration depending on which goods it will be used on. A trademark registration applicant shall, according to the prescribed classification of goods, enter the class(es) and designation of goods on which the trademark is to be used, and file an application for registration. Both the Chinese and European registration systems use the International Classification of Goods and Services established by the Nice Convention. However, Chinese classes also include subclasses that are not used in Europe.
The exclusive right to use a trademark is limited in its extension to identical and similar products or services. For convenience, products and services have been classified into 45 classes. China is the only country that has divided these classes into subclasses. When registering a trademark, it is important that the registration covers goods and services of all subclasses relevant to our business. It is good practice to register products and services in each subclass that makes up a class, even if the goods and services in a subclass are only marginally related to its own activity. This will prevent competitors or counterfeiters from registering an identical or similar trademark in a given subclass and using it to weaken the trademark (China IPR SME HELPDESK guidelines, 2018).
The following is an example about what it means to register a trademark for each subclass. In the EU and China products class 29 includes eggs, milk, dairy products, edible oils, and fats. In the EU, a trademark can cover all products of this class. In China however, it depends on the subclass which the trademark belongs to. For example, butter belongs to subclass 2907.2, while peanut butter belongs to subclass 2904.1. Therefore it is necessary to specify the sub-class of products for which the trademark is being registered. Otherwise there is the risk that it will be protected only for peanut butter and not for butter.
Another important aspect of trademark registration in China is the "first to file" system, which means that if a trademark similar to yours has already been registered in China, you can lose the legal protection of your trademark. Therefore, it is essential to register your brands in China before entering the market in order to reduce the risk that the trademarks are registered in advance by third parties.
Lastly, the registration of a trademark in Latin characters does not automatically protect the trademark from the use or registration of the same brand or similar brand in Chinese characters. Therefore, it is strongly recommended to register a Chinese version of a foreign trademark. China requires Chinese names on products, not registering the Chinese character name of a product makes that product vulnerable to bad faith trademark registrations (China IPR SME HELPDESK guidelines, 2018).
To conclude, the foreign company has to:
Pay the costs of registration;
Acknowledge that the validity of a trademark is valid for 10 years and can be extended for 10 more;
Remember that Chinese and European registration systems use the International Classification of Goods and Services but that the Chinese classes also include subclasses;
Take into account the "First to File" rule to avoid copied products; and
Register the trademark in the Chinese Language.
These are the most effective ways for foreign companies entering the Chinese market to protect their trademarks. To avoid any pitfalls, companies should think about this even before entering the Chinese market. It is the cheapest and most effective way to avoid trademark squatting. If their trademark rights are infringed, they would urge the relevant Chinese authorities to bring offenders to justice (Jewell, 2016). The protection of such distinctive signs aims to stimulate and ensure fair competition and to protect consumers, by enabling them to make informed choices between various goods and services.
Alice Cottone-, born in Modica (Sicily), is a twenty-five-year-old passionate student about Chinese language and culture. She graduated in 2020 at University of Rome La Sapienza and got a double-degree in Chinese language and Culture in 2018 in Beijing. Now she is attending a specialized course in “Foreign trade and internationalization of company” at Tor Vergata University of Rome. You can find her on Facebook, on Instagram as @alicecottone, on LinkedIn, and on Wechat as alicecott1.
The opinions expressed here are those of the writers and do not represent the views of European Guanxi.
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