China has recently shown considerable efforts in creating stronger intellectual property rights (IPR) protection systems and in bringing its existing intellectual property laws in line with, or closer to, international standards. However, counterfeiting, trade mark infringements and other IPR infringements remain one of the major issues in China. When European SMEs enter these markets, there are some key points they need to look out for in order to ensure their IPR is effectively protected.
I. Trade marks are granted under ‘first-to-file system’
The key point is that trade mark regimes in China generally use a ‘first-to-file’ system, meaning that the first person to file for trade mark registration in China will own that right in the country once the registration is granted, irrespective of ‘first use’. Thus, if an owner does not apply for protection on time, others may do so first and subsequently reap the benefits – free-riding the reputation of another brand or registering a trade mark in ‘bad-faith’ in order to sell it back to, or even sue the rightful owner. Registering in ‘bad faith’ with the intention of making money from it is one of the main causes of IPR infringements in China.
II. Get a local name for your trade mark
Additionally, a business should consider how its trade mark would translate into local languages. The registration of a trade mark in original Roman characters does not automatically protect the trade mark against the use or registration of the same or similar trade mark written in local scripts. If a local equivalent is not chosen, consumers will almost certainly choose their own, which might affect the reputation of the company. Choosing a Chinese trade mark equivalent is particularly important because not only the meaning, but also the sound, tone and even look of the Chinese characters chosen for a trade mark name can affect the brand’s reputation.
III. Be active in enforcing your rights
Entering a new market and protecting IPRs also means being ready to enforce or defend rights in order to ensure that business objectives are met and therefore a budget planning for enforcement is key. Multiple avenues of IP enforcement are generally available in China. In China, administrative action may be advisable over civil litigation or criminal prosecution. Administrative enforcement is filed before specialized administrations and is generally fast, cheap and reasonably efficient.
Companies can obtain confiscation and/or destruction of the infringing goods as well as fines, but no damages are awarded. At the same time, in certain South-East Asian countries like Malaysia and Thailand, criminal actions are more effective at ending infringement because civil actions are lengthy and entail only negligible fines. It is advisable to seek professional advice, when trying to create the most cost effective IP enforcement strategy.
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If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020,Dongmen Rd South, Luohu , Shenzhen, China.
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