Trademark Rights in China: Good News, Bad News.

A lot has been written about the status and enforcement of trademark rights in China. This is no surprise, as for some industries trademarks are a key strategic business advantage.

When it comes to trademarks in China, I like to put it this way “I have good news and bad news… which one would you like to hear first?”

The good news is that, although China has to put up with quite a negative press when it comes to respecting and enforcing IP rights (one could say well deserved), on trademark rights protection it has quite a good record of enforcement!

So what could the “bad news” be? Well, China follows a first-to-file system so, if you have not done it already, anybody could well register your mark without evidence of prior use or ownership (ouch!). So register your trademarks now (it may take between two to three years – although there were proposed law changes that hopefully could end up shortening this period) so that you don’t have a nasty surprise one of these days.

Lovells, the international business legal practice, has published in its website a “Clients Note” entitled “Pre-emptive intellectual property rights management in China” in which they highlight what they call the “hijacking of IP rights”.  I’ll summarize it for you: “somebody registers your rights and then takes legal action against you for IP rights infringement … because you are obviously making use of your own rights!”

The document also shares a real life example in which things went really wrong for an unnamed US Company. A former distributor registered this company’s trademark and ended up:

  • Filing trademark infringement complaints in several Chinese cities
  • Getting all production plants sealed
  • Getting product seized by administrative authorities and
  • Achieving an administrative order ordering the US Company to stop using its own trademark…

You can breathe now. It has a happy ending. But my point is that those things happen. And as Douglas Clark, a partner in this same law firm, mentioned in a lecture on Intellectual Property at CEIBS Executive Forum on April 6th, his firm gets 5 to 6 cases like this every year.

You may be thinking now that you don’t sell your products in China, but that does not take you to safer ground. Check out the China Law Blog for some basic tips on outsourcing … and do not miss the part in which they mention that you could even be prohibited from exporting your own product from China!

I hope I did not leave you too worried… for peace of mind, you can just log onto the Trademark Office of the State Administration for Industry and Commerce (CTMO)

And browse in the link bellow to see if you find your trademark there….

Hope not… unless you are registering it yourself!

Do you have any experience to share?

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