China is one of the world’s largest economies, second only to the US in terms of GDP. The opportunities presented by its burgeoning consumer market and demand for British-designed products are not lost on UK brands, many of whom are including China in their expansion plans. When entering any market, effective brand protection is vital. A registered trade mark is one of the most powerful forms of intellectual property (IP). Trade marks are territorial rights, meaning their protection applies only in the country of registration. If you plan on doing business in China, registering your brand as a trade mark there should be high on your priority list.
Many brands are wary of the intellectual property issues posed by China due to its reputation as the world’s leading source of counterfeit products. Although the country has made some positive changes over the last 20 years, it still presents unique challenges for brand owners.
In this guide, our trade mark solicitors explore trade mark registration in China. They explain the different routes through which UK brands can obtain trade mark protection in China, and examine the pros and cons of each approach.
Contents:
- What are the benefits of registering a trade mark in China?
- Can foreign individuals or companies apply for a trade mark in China?
- What are the costs associated with trade mark registration in China?
- How long does it take to register a trade mark in China?
- How to conduct a trade mark search in China?
- What happens if my trade mark is similar to an existing trade mark in China?
- How to register a trade mark in China?
- Is the national or international route better?
- What is the opposition period for trade mark applications in China?
- What are the grounds for opposition to a trade mark application in China?
- Post registration considerations
- Summary
What are the benefits of registering a trade mark in China?
Registering a trade mark in China offers many notable benefits, including the following:
- Trade marks are potent rights, affording you a monopoly over the mark in connection with specific goods and services. They only apply in the country of registration. Your UK trade marks will not protect you in the Chinese market. You must register a trade mark there to obtain protection in China.
- China has an unfortunate reputation for IP infringement through activities such as counterfeiting and piracy. Registered trade marks enable you to take legal action against infringers.
- Chinese consumers are notoriously brand-conscious and display a strong preference for well-known brands. Registered trade marks distinguish your goods from others, enabling you to build a unique brand that inspires loyalty.
- Trade marks can be commercialised through sale or licensing. A comprehensive trade mark portfolio can facilitate your expansion plans and attract Chinese business partners and investors.
- China is a ‘first to file’ trade mark jurisdiction, so the entity that registers the trade mark first gains a monopoly over it. Securing your trade mark early is crucial.
- China has several hugely successful e-commerce sites, including Tmall and Taobao. These sites can be a hotbed of counterfeit products. Having Chinese registered trade marks can be a prerequisite to securing the removal of infringing items and protecting your brand online.
Can foreign individuals or companies apply for a trade mark in China?
Yes, foreign businesses can apply for a trade mark in China. To do so, they must satisfy specific requirements.
There are two routes through which a UK business can file a trade mark application in China: the national route, which involves filing directly with the China Trade Mark Office (CTMO), or the international route, which involves filing with the World Intellectual Property Organisation (WIPO).
We discuss these two routes in more detail later in this guide, but for the purposes of establishing who can apply for a Chinese trade mark, the requirements are as follows:
National route
As a UK business, you can file a trade mark application directly with the CTMO if you have a habitual residence or place of business in China. You can still file an application if you have neither, but you must use a Chinese trade mark agent.
Our trade mark solicitors work with a network of trusted trade mark agents around the world, including in China. They will source the most appropriate agent for your brand and work with them to prepare the application.
International route
To use the international route through WIPO, you must have a UK trade mark registration for the mark you wish to register in China and be either a UK business or a UK national.
What are the costs associated with trade mark registration in China?
The Chinese trade marks system divides marks into classes covering different goods and services. When applying for a trade mark, you must identify the classes in which you require protection, and pay the requisite fee. At the time of writing, the fee is 300 Chinese yuan, around £35, for up to 10 items in a single class. Additional fees are payable for extra items.
In addition to the filing charges, you will need to pay your legal fees, both for your advisors here and in China. While this increases your initial outlay, the complexities of China’s trade mark system are such that most brand owners view the fees as a small price to pay for peace of mind that their applications have the best chance of success and will provide the broadest possible brand protection.
How long does it take to register a trade mark in China?
How long it takes to register a trade mark in China depends on several factors, including whether or not your application is opposed. Straightforward national applications can be processed within 12-18 months, whereas problematic ones will take longer. Keep in mind that China’s trade mark office is among the busiest in the world, so it’s not unusual for trade mark applications to experience delays.
How to conduct a trade mark search in China?
Before you apply for a Chinese trade mark, it’s important to conduct searches to confirm the mark is available and not too similar to an existing one. These preliminary steps prevent you from spending time and money on a trade mark application that is doomed to fail.
To ensure your searches reveal the relevant information, you must use appropriate search terms and search within the correct classes. China uses the same trade mark classification system as the UK, known as the NICE classification. However, it interprets the NICE classification in a unique way, most notably through its use of a subclass system within each overall class. Your trade mark searches must incorporate all relevant subclasses to ensure reliable results.
Our trade mark solicitors have vast experience in undertaking searches of the relevant databases in China to identify any potential issues with a proposed mark. They will review the results, assess their potential impact on your proposed application, and advise on the best way forward.
What happens if my trade mark is similar to an existing trade mark in China?
The UKIPO, which is the body responsible for registering trade marks in the UK, will not reject a trade mark application on the grounds that it is too similar to an existing mark; it is up to the trade mark owner to do so. However, the process in China is different. China operates a fairly restrictive trade marks registration system, placing great significance on the first-to-file principle, namely that the entity who files first obtains the exclusive rights to use the mark. The CTMO will refuse applications for trade marks that conflict with earlier rights, even if the earlier rights holder raises no objection.
If the CTMO rejects your trade mark application for conflicting with an existing mark, you have several potential options, including the following:
Appeal
If you disagree with CTMO’s decision that the marks are too similar, you can appeal to the Trade Mark Review and Adjudication Board (TRAB) and then through the Courts.
Coexistence
Where appropriate, you could seek a trade mark coexistence agreement with the rights holder and present their consent to CTMO. The rights holder may require payment in return for their consent, which the CTMO is not obliged to accept, particularly if the CTMO still considers that consumer confusion is likely despite such an agreement between the parties. An alternative route to coexistence is to request that the prior rights holder limits its registration away from the goods/services you have applied for (for example if its registration is broader than the goods/services it actually uses its registration for) in order to convince the CTMO that there is no conflict. Again, the rights holder is likely to require payment for this and the CTMO may still consider there to be a conflict.
Cancel the earlier mark
China has widespread issues with ‘bad-faith’ trade mark registrations. Bad faith applications are made by unscrupulous individuals seeking to exploit brand owners by extracting payment for transferring the mark or piggybacking on their goodwill by using the mark to sell counterfeit goods.
If the earlier mark has not been used for three years, you can apply to cancel it for non-use. The owner must then prove their use of the mark. If they can’t, CTMO will cancel the mark. This strategy can be useful in fighting trade mark squatters, but only once the three-year period has expired.
The strategy is of little use when the trade mark owner is using their mark, for example, in connection with counterfeit goods. In these cases, you would need to apply to invalidate the mark on bad faith grounds. Proving bad faith in China is notoriously difficult, and the process is expensive and lengthy.
The best way to address the issue of bad faith trade marks in China is to avoid it altogether by getting in first and securing your trade mark rights at the earliest opportunity.
How to register a trade mark in China?
There are two routes by which UK businesses can register a Chinese trade mark: the national route and the international route.
National route
The national route involves filing an application with CTMO. You must submit various documentation, including details of the trade mark, a list of the relevant goods and services, and the applicant’s details with a Chinese translation. If you need to use Chinese trade mark agents, you must submit a Power of Attorney. You must use agents to apply on your behalf if you do not live in China or have a place of business there. Our trade mark solicitors work closely with a network of Chinese trade mark agents. They will select an appropriate agent and work alongside them to prepare a watertight application that provides the broadest protection.
In the UK, you can file a single trade mark application to cover multiple classes of goods or services. These are known as ‘multi-class applications’. Multi-class applications enable brands to streamline their trade mark processes and simplify their portfolios. When one trademark covers multiple classes, you only have one registration number and date to deal with and need only renew one registration.
Multi-class applications are permitted in China, but their benefits are limited. Firstly, China bases its filing fees on the number of classes as opposed to the number of applications. As a result, the fees for multi-class applications are the same as those for a series of separate, single-class applications. Chinese trade mark law does not allow trade mark owners to split a multi-class application. If one class encounters problems, the entire application is put on hold until the issues are resolved. Once your multi-class application is registered, you cannot subsequently deal with just one class; anything you do must encompass all classes. For example, you must renew or assign the entire registration. Despite the administrative ease of multi-class applications, a series of single-class applications may be preferable for your Chinese trade marks.
A crucial point when applying for Chinese trade marks is that registering the English version of a mark does not prevent third parties from registering the same or a similar mark using Chinese characters, or from using the Chinese version of the mark. You should register both the English and Chinese versions of your branding.
Once CTMO has received your application, they will conduct formality checks on matters such as the applicant’s details and the Power of Attorney, then check the description of goods or services. With all being well, the application will proceed to the substantive examination stage, during which CTMO will confirm that it complies with China’s trade mark laws, including not conflicting with earlier rights. If everything is in order, CTMO will publish the application in the Gazette to allow any third parties to raise an opposition. If no oppositions are raised, CTMO will register your trade mark.
National trade marks in China take around 12 – 18 months to achieve registration, provided they encounter no issues.
International route
The international route involves using the Madrid Protocol to extend the protection provided by your existing UK trade marks, to China. The Madrid Protocol is a system of international trade mark registration to which both the UK and China are signatories.
Under the Madrid Protocol, applicants use a trade mark registered in their home country as the basis for trade mark protection in other member countries, including China. Provided you have a UK trade mark that corresponds with the one you wish to acquire in China and live in the UK or have a place of business here, you can use the Madrid Protocol to secure trade mark protection in China.
International applications from UK brands are filed at the UKIPO, which checks your UK trade mark’s details before forwarding your application to WIPO. WIPO checks for formality irregularities and then sends the application to the intellectual property offices in the countries specified. For China, that is CTMO. CTMO will examine the proposed trade mark to check that it conforms with local trade mark laws. If they have any objections to the application, they must raise them within 18 months. If no objections are raised, your international trade mark rights will be extended to China.
Is the national or international route better?
Both the national and international routes have advantages and disadvantages. When deciding which is the most appropriate for your brand, it can be helpful to consider the following points:
- The international route is extremely cost-effective, allowing you to obtain trade mark protection across a number of countries in one application and for one fee. However, if you are only interested in securing protection in China, the national route may be cheaper.
- Securing protection in China through the international route can take longer than applying directly to CTMO. The examination process for international applications may take up to 18 months, whereas the examination of national applications must be completed within nine. If you require trade mark protection in China urgently, the national route may be your best bet.
- International trade marks are reliant for the first five years on the validity of the base mark. If your UK mark is cancelled or invalidated within that time, you will also lose your protection in China. Whilst you may be able to convert the international mark into a national one, doing so would involve more work and increase costs.
- The CTMO automatically issues a Certificate of Registration when a national trade mark is registered. It does not do so when China is designated under an international registration. The importance of this distinction comes into play when you need to enforce your trade mark rights. You cannot do so in China without a registration certificate, so if you have an international mark, you will need to obtain a certificate from CTMO before taking enforcement action, which can take a few months.
- China is unique in its interpretation of the NICE classification, breaking down each trade mark class into a series of subclasses. For example, under the NICE classification, class 25 covers ‘clothing, footwear and headgear’. However, in China, clothing is in class 2501, shoes are in class 2507, and hats are in 2508. It then goes further and separates each item within those subclasses into further subclasses. For example, class 250042 covers shirts, whereas class 250044 covers short sleeve shirts. Understanding this classification system is crucial since protection in one subclass does not provide protection in another and does not prevent third parties from registering the same mark in a different subclass.
The subclass system can cause issues when a trade mark owner seeks to extend its national trade marks to China. For example, a UK registration in class 25 may not cover all the relevant goods under China’s subclass system. The CTMO generally only accepts standard wording for specifications for goods and services. The national route allows you to tailor your specifications to China by, for example, listing one item from every subclass within your required NICE class to obtain protection within the entire class.
Our trade mark solicitors will work closely with their Chinese counterparts to prepare a specification that provides the broadest possible protection for your brand whilst complying with CTMO’s rules.
Deciding whether the national or international filing route is best for your brand requires a thorough understanding of the nuances of each route and an appreciation of Chinese trade mark law. Our trade mark solicitors routinely assist UK brands planning to expand into China. They will devise a strategy that facilitates your plans, aligns with your budget, and maximises brand protection.
What is the opposition period for trade mark applications in China?
The opposition period for both national and international trade mark applications is three months from publication.
What are the grounds for opposition to a trade mark application in China?
Anyone can oppose a trade mark application on absolute grounds, such as the mark is deceptive or detrimental to morality. Only previous rights owners can oppose on relative grounds, namely that it conflicts with their earlier mark.
Post registration considerations
Once registered, your Chinese trade mark will last for an initial period of ten years. Your rights can last indefinitely provided you renew your mark at ten year intervals.
Monitoring and enforcing your rights are as important as registering them in the first place. If you do not monitor the Chinese market and act against any infringements, you risk it becoming flooded with counterfeits that significantly compromise your reputation. If you do not use your mark within three years of registration, it may be cancelled. This period is shorter than the five years permitted in the UK and many other countries.
Summary
China offers significant opportunities for UK brands. However, the country also poses unique risks that you must take steps to mitigate. Protecting your brand in China is essential to protecting its integrity not only there, but also worldwide. Chinese trademarks are powerful tools, offering exclusive use of your brand in China and safeguarding it against misuse. By securing your trade mark rights early, you can avoid significant problems down the line.
China’s trade mark system is complex, and successfully navigating it requires the support of experienced trade mark solicitors like ours. Our trade mark solicitors are well-versed in the intricacies of China’s trade mark laws and procedures and work closely with a network of trusted Chinese agents. Together, they will devise an effective trade mark strategy that allows you to take advantage of all China has to offer without fear of losing control of your most valuable asset: your brand.
