Strategy
By Dan Harris, Co-author China Law Blog
If you are doing business in or with China you should give serious thought to registering your trademarks in China. In particular, you should consider a China trademark registration for your trade-name, your logo and your service marks. Brand identity is critical for success in China (as it is just about everywhere) and if you are going to protect your trademarks in China, you must register them. This is especially true in China where if you do not register your trademarks, someone is almost certain to try to appropriate them. If you have not taken the necessary steps to protect your brand, this theft will succeed.
Why trademark in China
This post explains why trademarks are so important for creating your brand in China. Your trademark is what conveys who you are.
No matter what the drink, if it has Coca Cola’s name on it, you know that the odds are overwhelming that it will have been well made and be safe. Westin on a building tells you before you go in that it is a nice hotel. Think how damaging it would be to Coca Cola or to Westin if everybody could use those two names on their products, be they drinks or hotels. None of this is any different in China.
Unlike the United States, however, China employs a “first to file” system for trademark registration. This means that China does not recognize unregistered trade mark rights. So you must register your trademark to have any trademark protection. Without trademark protection, someone else can register “your” trademark and then prevent you from using it. This is true even if you are not conducting any sales in China. Even if all you are doing is manufacturing product in China, someone else can (and probably will) register “your” trademark and then stop you from exporting anything from China with that trademark on it unless you pay a licensing fee. This happens all the time and it mostly happens to companies from common law “first to use” trademark registration systems. It happens less often to European companies because they usually know better because they come from a first to file system.
All of this means that you should register your trademark or service mark before someone else beats you to it. In other words, you should register your trademark or your logo before you first start using it in China. If you know you will be using your trademark or logo in China, there is no benefit (other than cost delay) in waiting.
The first to file an application in China for a particular trademark gets priority to that trademark, but it can take years for the Chinese trademark office to actually issue your trademark. In the meantime, nobody can stop you from using the trademark for which you applied, but you cannot stop anyone else from using it either. So if you are planning to sell a trademarked product or service in China at some point in the future, there are real benefits to going ahead and registering for the trademark right away. That way you will either have it when you start selling or very soon thereafter.
Even if you are just manufacturing a product in China and are not selling it there, you must register your trademarks on that product before anyone else. This is because if someone beats you to “your” trademark, they will be able to stop you from using it in China at all and block your product (with the offending trademark) from leaving China’s ports.
But what exactly should you trademark and how?
You should trademark anything that identifies your company or your brand or your product or your service that you can. If your company is Premier and your product is Alpha and your logo is a giant A and you sell a special sort of cloth headband, you should at least consider registering the following trademarks:
- The word “Premier” in Roman script
- The word “First” in Chinese characters
- The Mandarin word that sounds closest to “Premier”
- The logo
If you do not choose a name in Chinese and register it, the Chinese consumer will almost certainly choose a Chinese name for you and you may find you do not like that Chinese name one bit or that the trademark on it has already been taken.
There are essentially three methods for picking your Chinese name. You can translate your English or other foreign name directly into Chinese. Registering the word “first” in Chinese characters is an example of that. The disadvantage of a literal translation is that you will essentially have two different names for your same product or company and this can cause confusion in the market. The second option is to use a Chinese character name that sounds like your foreign name. If you go with a phonetic version of your foreign name, you must make sure that you know what the Chinese characters you are using actually mean in Mandarin and Cantonese. Otherwise, you might find yourself with a Chinese name that means something you really do not want to be saying. Oftentimes, the best solution is to choose a phonetic version of your name that also conveys something you wish to convey. Coca Cola is the classic example of this. Its name sounds like “Ke Kou Ke Le,” which means “delicious” and “happy.”
You will also need to consider in what category(s) to register whatever trademarks you deem necessary from the above. Returning to the example of the headband, there are at least two categories that make sense: hair accessories and clothing. If you register your trademarks in just one, you leave a massive opening for a competitor to step in and register the same trademarks on the same product in the category you did not choose. If that happens, both of you will be able to sell the headband using the same trademarks. Not choosing all of the right categories for your trademarks can be as bad as not registering your trademarks at all.
About Dan Harris
Dan received his B.A. from Grinnell College and his J.D. (magna cum laude) from Indiana University.
Dan focuses his legal practice on representing companies doing business in emerging market countries. His work has been as varied as securing the release of two helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, seizing fish product in China to collect a long overdue debt by a Russian company, and assisting in the criminal defense of an anti-whaling activist in Japan.
Dan is a frequent writer and public speaker on doing business in China. Forbes Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, Inside Counsel, and the Christian Science Monitor, have all quoted him on various aspects of his international law practice.
Sep 18, 2013