Trademark issues have been a constant fear for successful companies looking to expand overseas. In places such as China, registering your company trademark before operating in the market is a necessity if the company wants to avoid future disagreement regarding malicious registration by competitors.
Xintong Tiandi Technology is a company based in Beijing. They are specialized in leather products ranging from handbags to passport cases with the name “IPHONE” on them. The ensuing war between Apple and Xintong Technology started when Apple found out that another company was using their trademark name “IPHONE” for their own gain.
In 2012, Apple brought the case to the Chinese Trademark authority and also filed a lawsuit in a lower Beijing court, demanding justice for their company. Unfortunately, Apple lacked evidence to demonstrate that “iPhone” was a well-known company before 2007, which was the year when Xintong technology registered “IPHONE” as their trademark. Remarkably the authorities paid little attention to whether the letters were in capitals or not.
This sadly resulted in both the trademark authority and the lower Beijing court ruling against Apple and in favour of Xintong technology. But Apple refused to back down from the fight and give up, hence the appeal and re-appeal to the Higher Court of Beijing to get back what they think is theirs to begin with. Although their efforts have been rejected and unsuccessful, Apple does not want to despair and still has hope that one day they will win.
What to do in order to not find your company in the same situation as Apple?
Contrary to many rumours picturing China as the hatchery of piracy, there actually is an extensive legal framework to protect foreign as well as local intellectual property. Especially since joining the World Trade Organization in 2001, China has strengthened its legal framework. In China, the legal framework for IP protection is built on three national laws passed by the National People’s Congress: the Patent Law, the Trademark Law and the Copyright Law.
Different from other countries, China applies the first-to-file system for patents, which means that those who file first get the patent, even if they are not the original inventors. This emphasizes how important it is to start the patent registration as soon as possible. The patent applications are conducted in Chinese, so documents (if originally non-Chinese) must undergo a precise translation by an expert to secure all relevant points. Also, foreign companies who don’t have a registered office in China must use the help of a local patent agency, which is legally based in China. Furthermore, a patent attorney for filing the patent is needed. The administrative authority responsible for patents is the State Intellectual Property Office (SIPO). The SIPO is also responsible for IPR issues in general.
China has, as already mentioned, a ‘first-to-file’ system. This also means that the ones registering the trademark don’t need any evidence of prior use or ownership. That’s why third parties can also register popular foreign marks without really “owning” them. A registration at the China Trademark Office as soon as possible (trademark as well as Logo) is highly recommended if your company plans to enter the Chinese market.
Only accepted trademarks registered by the Trademark Office in China are protected by law. The owner has then the exclusive right to use this trademark. Also, we recommend registering an appropriate name for your product in Chinese, since the customers will recognize and also pronounce it easier.
Acting fast should have high priority – a trademark registration usually takes over 1 year and the trademark itself is further valid for ten year with the option to renew it for another ten years period. There are certain facts you should consider when planning to register your trademark in China. The newest amendments to the Trademark Law were made in 2013 and since the effective date of 1st May 2014, not only visual trademarks like logos or pictures but also sounds can be recognized and hence registered. For the trademark registration, China uses the international classification of goods according to the Nice agreement. Recently changes for the registration procedure were made. You don’t have to register different classes separately anymore but can use only one application for many various categories.
The registration of copyright in China is not mandatory. However, a registration of copyright could help in case of difficulties or conflicts with other parties in proving the ownership. Protection to persons from the countries belonging to copyright international conventions and agreements of which China is a part is secured. Thus, many decide to register voluntarily at the National Copyright Administration (NCA) just to be safe in case of trials. There are two alternative periods for copyright protection i. Depending on the type of the subject, the copyright period is either the life of the author plus 50 years more or, in the case of film, photographs and television 50 years after the first publication. It is highly recommended to seek professional advice from lawyers, consultants or other experienced firms. Since China is a lot about networking, try to maintain good relationships with the local organizations that can help you. Consider also the fact that laws change frequently; so staying updated is a must.
What to do if your company is in the same situation as Apple?
If this unlucky case happened and somebody registered your trademark in China, the most important question would be: How can I fight this. You can protest a malicious trademark by:
- Introducing your brand to prove “well-known” status of your brand in China. Awards, commercials, advertising media or social organizations would help recognizing that your brand can be distinguished from other brands.
- Providing authorities with copies of registration certificates of the trademark in foreign countries.
- Evidence of use of malicious trademark usage in China before the application date of the mark in question. This includes product catalogs, ads, pamphlets, or invoices.
- Evidence showing the malicious registration by the opposed party, such as cooperation records or business contacts between the opposed party and the opponent (if applicable).
- If your trademark is specially designed by some person or has a specific meaning, please provide the design specification and the use proof for the first time. You must file a complaint within a three month time period after a trademark announcement. The trademark office will not accept complaints afterward. If you fail to submit a clear reason, fact or legal basis for an objection, the trademark authority will not approve your opposition.
ECOVIS Beijing would carefully advise you to register any trademark in China as soon as possible and even before thinking about entering the market. Adequate protection should be ensured broadly in china and with a long-term thinking regarding the immediate class for the product. For any further questions please do not hesitate to contact us at: firstname.lastname@example.org
Richard Hoffmann is a partner at ECOVIS Beijing China. Richard obtained an honors degree in law and worked in Germany, the United States, and China for various prestigious law firms prior to joining ECOVIS. In addition to being a member of the board of ECOVIS International, he is Supervisor for the China business of a respected German company and shares his extensive knowledge to students by teaching commercial law in China at SRH Hochschule Heidelberg. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV stations. Contact: email@example.com
|Ecovis Beijing is the trusted tax and legal advisor to several embassies and official institutions in China. It specializes in mid-sized international companies and is focused on tax & legal advisory, accounting and auditing. If you’re interested in finding out more about tax and legal, don’t hesitate to sign up for our Newsletter, give us a call +86 (10) 6561 6609 or contact us directly via firstname.lastname@example.org|