Trademark in China – do I need it?
There are several benefits for foreign-based companies to register its trademark in China. Covering businesses within manufacturing, distribution, and sales. No matter if you are doing business in China today or not, probably at some point you will be doing business with China. Being proactive and avoid bad faith registrations and protect against counterfeiting will save you both a lot of time and money in the long-term.
One major thing to have in mind when it comes to trademark registration in China is that, unlike many other countries, where “first-to-use” principle applies for trademarks. In China “first-to-file” principle applies. Meaning that anyone can file to register a trademark of any company in China, and if there is no objection during the application process the registration is most likely to be approved and completed for the categories filled in the application.
This means in practice that copycats and competitors can file and register other brands trademark in China without informing the “real” owner of the brand. This applies for both English name, Chinese name, and company logo.
To file for a registration of trademark in China its possible for companies to go through the World Intellectual Property Organization (WIPO. The other option is to file an application directly with the China Trademark Office (CTMO) in China.
Most important to have in mind, is that if you do not register the trademark in China already today, you jeopardize your opportunity to do business in China in the future. This could have the implications that it will not be possible to sell and distribute in China, since the trademark is already registered in China. In this scenario the owner of the trademark even might seize the products that is supposed to be sold in China.
A typical scenario
A typical scenario for none-Chinese brands is that you start selling on wholesale to a customer in China. The customer in China then files and register the trademark in China of the none-Chinese brand. What follows is that Chinese sales channels, such as marketplaces flagship store on Tmall, JD, Kaola, Pingdoudou and WeChat stores are all being registered and established by using the trademark registration the Chinese customer have obtained in China. Notice, this have all happen without the “real” brand knowing about it. So once the none-Chinese brand decide to enter the Chinese market either by establish a subsidiary for domestic sales or via cross-border sales they end up realizing that they are not allowed to sell their own products in China due to the fact that they don’t own the trademark of its own company in China!
That being said, we strongly recommend no matter where you are in terms of business with China today. File and register your trademark in the right categories in China as soon as possible. Otherwise it might be too late.