As Australia’s largest trading partner and with a population of 1.4 billion people, China offers immense opportunities for Australian businesses.
While China offers many benefits for business and manufacturing, there is also the unfortunate reality that infringement of trademark and intellectual property can happen.
Before you expand your business into China, it is a good idea to know what trademark rights your business can have.
To protect your trademark rights in China, Quick Off the Mark® suggests that you keep the following points in mind.
1 Register your trademarks in China
Before you exhibit products or enter business meetings in China, it is wise to register your trademarks in China.
Not taking this step could leave your business vulnerable with someone else registering your trademark and potentially stopping you from exporting your products under your brand
Taking the time to research your business strategy in China can save you time and money down the track. Austrade has helpful information about doing business in China here.
It would also be useful to look at the China-Australia Free Trade Agreement that came into effect on 20 December 2015.
2 China has a first-to-file trademark system
Unlike Australia, China operates under a “first-to-file” trademark system, not a “first to use” trademark system. This means that unrelated third parties could register trademarks that are imitations or copies of other people’s brands.
It also means that even if your business is the first to use the mark in China, but it is not registered it will not protected and your first use may not act as a defence to infringement claims.
Trademark squatting in China is common and occurs when a business or person opportunistically applies for a trademark with an intent to sell the mark back to the original trademark owner or to prevent the original owner from using and promoting their mark in China.
To avoid this happening, Quick Off the Mark® suggests that you register your trademark in China first and as soon as possible.
It is also useful to consider developing and registering the appropriate Chinese language mark for your brand.
A trademark application in China can be made directly with the China Trademark Office (CTMO) or it can be filed through the Madrid system, which provides for international protection for trademarks.
Under the Madrid system trademark registration for China can take up to 18 months, while a direct registration through CTMO could take longer. Any trademark registrations not used for three or more years after registration can be removed from the register.
Quick Off the Mark® can advise you on which trademark registration option would best suit your business.
3 Pre clearance trademark searches in China
Before you register a trademark it is important to undertake pre clearance searches in China. This important step gives business owners information about the possible risks of infringement if they use their mark, as well as providing information on any possible difficulties in achieving China trademark registration.
A preliminary search, conducted by local agents in China will cost around AU$200 – $300 for a single category of goods/services, a worthwhile investment given the potential headaches and costs if you are found to infringe an existing trademark registration.
The Chinese trademark system has unique complexities including:
- The CTMO may refuse a trademark application if it deems confusion will occur. This can happen even if the existing trademark owner gives consent.
- Seeking to cancel any earlier mark in order to overcome trademark registration blocks can be costly and very time consuming.
4 China’s trademark classification system
Unlike Australian trademark classification systems, the Chinese trademark classification system is divided into a number a sub-classes, which have a list of ‘standard items’ of goods and services.
When the CTMO examines a trademark application, it usually cross checks the application against similar registered trademarks in identical sub-classes or pre-existing identical trademarks.
This method of cross checking means that if a clothing mark is registered in one sub-class of a class, someone else can successfully register a similar or identical mark for similar goods in a different sub-class, such as perfume or shoes.
Having a clear understanding of the Chinese trademark sub-classification system can protect your business and brand.
Thinking about expanding your business and seeking out new opportunities in China?
Quick Off the Mark® offers a range of affordable packages for small and medium businesses. Contact us here.
The advice provided in this blog is general advice only. It has been prepared without taking into account your business objectives, legal situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, legal situation and needs
Quick Off the Mark is a division of Mark My Words Trademark Services Pty Ltd (MMW). MMW was founded in 2011 and is headed by Jacqui Pryor, a registered trade marks attorney with more than 16 years experience.
In 2015 MMW acquired Quick Off the Mark®, which is a fast and affordable Australian trademark registration service. Quick Off the Mark® offers fixed fees that are affordable to help Australian businesses register their trademarks.