Author- Shailja Choudhary
How does China define a trademark?
All across the world, people can tell the difference between the products of various manufacturers thanks to trademark signs that identify the principal or most specific purpose of a product or service.
Words, symbols, devices, letters, numbers, three-dimensional signs (shapes), color palettes, or any combination thereof may make up the mark.
How do trademarks work in China?
It’s crucial that you learn your country’s specific trademark laws. Trademark rules are, in general, an issue for each country, while there are projects that make application and protection easier across borders (such as in the European Union).
In China, there are two ways to register a trademark:
Either;
a) registering for a national trademark in China with the China National Intellectual Property Administration (CNIPA) or
b) filing with WIPO from any third country and designating China as an additional country of use.
In China, trademark registration is based on a “first-to-file” basis. In order to be legally protected in China, foreign trademarks require local registration. The logo you choose for your business needs to stand out and not resemble another firm, country, or flag in any way. To see if a trademark is available for registration in China, you can use CTMO’s online database[1].
Since China’s trademark system and classes are distinct from those of other countries, WIPO submissions designated to China frequently face rejection owing to mismatching subclasses and other procedural difficulties. Although protection would have been granted for a similar mark if it had been applied for in China, this application has been rejected. WIPO clearance can take 9-18 months, but national filings in China typically only take 6-9 months to process. Hence, businesses are highly encouraged to apply for a China national trademark.
Whoever files for trademark protection in China first will, barring any conflicting prior marks, be granted protection. While there are various viable legal arguments against bad faith applications, doing so typically requires an extensive time investment and resources. Hence, opportunists (squatters) frequently trawl trade fairs and the internet, applying for trademark protection of foreign brands they expect to enter the Chinese market in the future to sell their branded products or services, and then turning to them to purchase the trademark rights. When these companies arrive in China, they usually have ambitious objectives but little time to engage in legal wrangling. As a result, many people pay exorbitant fees to regain ownership of their trademarks. To avoid these and other problems, you should register your trademark before entering the Chinese market, or do it quickly if you have already begun to investigate entering the market[2].
To be eligible for registration in China, the following aspects must be met:
- The mark must be legal- It is not allowed to be the same as, or confusingly similar to, the name or flag of any country or international organization. It is forbidden to promote false or exaggerated claims or to target a specific nationality.
- The mark must be distinctive- It needs to stand out as a unique entity in the marketplace.
- The mark cannot be functional- Although generic names are permitted to be used by anybody in China, a company selling apples cannot register the word “apple” or any representation of an apple as a trademark. The mark also can’t give an unfair advantage to its owner by alluding to a technological effect and making it harder for customers to decide between competing products that offer the same or similar technical effects.
- The mark must be available for registration– CTMO’s official database of registered trademarks is now searchable online. There are both Mandarin and English versions of the database, and it contains information on all trademark applications, approvals, renewals, and amendments[3].
Why you should register your trademark in China, even as a well-known brand?
Since trademarks registered outside of China are not recognized, this is a crucial legal step for international businesses. When a brand becomes popular, it often attracts the attention of trademark squatters, counterfeiters, and grey market vendors.
New Balance, an American sports shoe company, fought for its trademark rights in China for almost two decades against fake makers and distributors. The amount of compensation it received in China was unprecedented for a foreign firm.
Adjudication, however, is unlikely to yield fruitful results without registering the company’s trademark in China and is time-consuming and expensive anyway.
Businesses that operate in China without first registering their trademark there run the risk of having any allegations of trademark infringement dismissed, regardless of whether or not they legally export their products to other countries.
It’s interesting to note that trademark squatters may sue such businesses for infringement as well. Last but not least, holding a Chinese trademark allows customs officials to seize counterfeit items from internet retailers and grey market sources.
What are the Steps to register your trademark in China?
I. Filing the application
The corporation has two options for submitting an application to the China Trade Mark Office (CTMO): either directly or via the International Intellectual Property Organization (WIPO). If you go with the latter option, your trademark application must be filed in the nation where the trademark is already registered[4].
II. Choosing the product and service subclasses
China adopts the Nice Agreement’s International Classification of Products and Services in 1957, although it further subdivides these classifications. Different companies in China can register the same trademark in separate subclasses if the subclasses are not considered to be identical. This means, for example, that different companies can register the same trademark in the subclasses for general footwear and boots[5]. The applicant’s trademark must, therefore, encompass all the items and services (across all subclasses) that fall under the purview of the firm.
This year’s Nice Classification table went into effect on January 1. Holders of registered trademarks in China should update their trademark applications to reflect the most recent Chinese classification table. The newest revision includes both revised product and service requirements as well as the introduction of new offerings.
Finally, international investors should be aware that despite the Nice system’s product and service standards being included in China’s 2019 version, a large discrepancy remains when comparing the two to the table from the 11th Edition of the Nice Classification. (Nice Classification, now in its eleventh edition, was published in 2016; since 2013, a new edition has been released every year.)
III. Registering the trademark in Chinese characters
In China, a trademark written in Roman letters may not provide as much protection as a trademark written in Chinese characters. Another company can register a trademark that is the same or similar in Chinese characters. This is crucial to a company’s success and reputation in China.
Loss of clients and dilution of brand value can result from the meaning, pronunciation, or even the appearance of the Chinese characters if other businesses or the public make unofficial use of your trademark in the locally-spoken language. As an example, Ralph Lauren, whose high-end clothing line is popular in China, has had to deal with the moniker “San Jiao Ma” (三脚马), which means “three-legged horse” in Mandarin and was derived from the designer’s emblem.
Coca-Cola in Chinese means “sweet happiness,” which isn’t a literal translation but does help promote a positive image for the company. Nevertheless, Coca-original Cola’s name, Ke Dou Ken La, literally meant “bite a wax tadpole” (蝌蚪啃蜡), so the company had to try again with a better moniker. The rivalry between Toyota and Mercedes-Benz in the automobile industry is yet another fascinating case study. Toyota’s name in Chinese might be rendered as “thriving” (丰田), but Mercedes-name Benz in Chinese (Bensi) was misunderstood and caused the company problems when it entered the Chinese market.
The American electronics retailer Best Buy is another useful case study for analyzing the pitfalls of brand building in China. It’s possible that several issues, including the name, contributed to the company’s decision to leave the country after only five years. Best Buy’s trademark name in China, using the characters ‘百思’, merged the sound of the term ‘best’ with the straight translation of word ‘buy’ (买), which unfortunately got translated as ‘consider a hundred times before you buy.
How to choose a Chinese trademark name?
Applicants from outside of China must submit either the original English trademark or a literal translation into Chinese.
Below, we’ll go over the primary routes an outside company can take to settle on a trademark name in China:
- Literal translation: When the mark has a specific meaning, this strategy succeeds. Apple Computers trademarked “Ping Guo” (苹果), the Chinese word for “an apple,” and Palmolive is known as “Zong Lan” (棕榄), a mix of the literal translations of “palm” and “olive.” Businesses that go this route will need to put in extra effort to get consumers to recognize both the Roman character trademark and the Chinese character trademark.
- Phonetic translation: Creating a name in Chinese characters that are phonetically similar to the original trademark in Roman characters. In China, McDonald’s is called ‘Mai Dang Lao,’ Siemens is called ‘Xi Men Zi,’ KFC is called ‘Ken De Ji,’ and Audi is called ‘Ao Di,’ among other translations. If the brand already has a solid reputation in China, this tactic will be successful. This is more difficult than it seems because the characters may have negative connotations in any of China’s six major spoken languages[6].
- Combining a literal and phonetic translation: This approach may be the most efficient in some situations. Here, the trademark name is crafted by combining the way the Roman character name sounds with either a distinctive feature of the product or a positive allusion to Chinese culture. Coca-Cola is called “Ke Kou Ke Le,” which means “taste and be joyful” in Chinese; BMW is called “Bao Ma,” which means precious horses and reads as initials “BM”; and Fuchs, which in German means “fox,” is called “Fu Si,” which means “good luck and blessing” in Chinese.
What are the Trademark Registration Costs in China?
The CTMO’s application fee, which covers up to 10 products or services, is 800 RMB (Chinese Yuan). Each additional product or service above 10 in a single application will incur an extra fee of RMB 100.
[1] https://www.ip-coster.com/IPGuides/trademark-china
[2] Ibid
[3] https://www.china-briefing.com/news/chinas-trademark-regime-brand-protection/
[4] Ibid
[5] https://china.acclime.com/formation/trademark-registration/
