Shining the Spotlight on Trade Marks in China

Monday 26th August 2019
Article written by: Chris WaySolanda Chen 陈旭华

For some Kiwi businesses, exporting to China and beyond presents huge opportunities for growth. China is one of the fastest growing markets in the world and has a high regard for New Zealand goods and services. However, exporting to China can add layers of complexity and comes with additional risk if you don’t protect your business properly.

If your brand, product, or service is based on intellectual property (IP) that has taken time and money to develop, it’s important to protect it, both in New Zealand and abroad. If it’s carefully protected, it can form a powerful barrier to competitors, but if it’s stolen or used without your permission, your entire business may be put at risk.

One common way to ensure your business is protected is by registering your trade mark in China as early as possible.

What is a trade mark?

A trade mark is a sign that identifies and distinguishes the goods or services of one trader from those of other traders. A trade mark may consist of a word, logo, sound, shape, picture, label, or any combination of the above. A registered Chinese trade mark is one that is registered at the Chinese Intellectual Property Administration (CNIPA), a registered trade mark in New Zealand or other countries does not provide protection in China.

What kind of trade mark can be registered?

To obtain registration in China, a trade mark has to meet four requirements:

a) Legal

Signs which are deceptive and easily mislead the public regarding the quality or origin of goods can neither be registered nor be used as trade marks. Neither the name of any administrative division at or above the county level, nor the name of any foreign place known by the public can be registered or used as a trade mark.

b) Non-functional

This applies to 3-dimensional shape marks. If the shape results from the nature of the goods/services, is necessary for achieving a certain technical effect, or adds a substantive value to the goods/services, it cannot be registered as a trade mark.

c) Distinctive

A trade mark shall be distinctive, which means the trade mark shall have distinctive characteristics so the public is able to use it to identify the origin of the goods/services. A sign only bearing the generic name, design, model of the goods/services, or only directly indicating the quality, main raw materials, functions, uses, weight, quantity, or other features of the goods/services cannot be registered as a trade mark due to lack of distinctiveness, unless it has obtained distinctiveness through use and can be easily identified.

d) Not conflict with prior rights of others

Prior rights of others include prior trade mark rights; namely that a trade mark shall not be the same as, or similar to, prior trade mark applications and registrations in respect of the same or similar goods/services. Prior rights also include copyright, trade name right, individual name right, etc.

In view of above, it is strongly recommended to conduct a full-availability search prior to filing to assess the registrability and ability to use a trade mark in China.

How do I register a trade mark in China?

Trade marks can be registered directly at the CNIPA or via the Madrid (International) registration system.

Domestic registration system

Foreign applicants, including foreign companies or individuals, without a registered office or residency in China have to file trade mark applications through a locally registered IP agent.

Madrid registration system

An international trade mark application is filed at the World Intellectual Property Office (WIPO) through a national IP office based on a domestic trade mark application or registration in the applicant’s home country. China may be designated.  

Renewals, assignments, or modifications can be attended to centrally as part of the Madrid system. If a notification of refusal is issued by the CNIPA, the applicant is entitled to file a review of the refusal with the CNIPA through a local Chinese IP agent.

What is required for filing a trade mark application in China?

The following information and documents are required for filing a trade mark application in China:

  • English and Chinese name/address of the applicant;
  • Specimen of the trade mark;
  • Specification of goods/services;
  • Identification document for the applicant (e.g. Certificate of Incorporation/Certificate of Good Standing/Certificate of Business Registration/Passport); and
  • Power of Attorney if the application is filed through a Chinese agent.

What should you do if your trade mark is applied for or registered by others in China?

Due to the first-to-file system, trade mark squatting has become a common phenomenon in China. If your trade mark is pre-emptively applied for or registered by a third party in China, there are three options for you to try to invalidate the trade mark.

  • Opposition – an opposition can be lodged against the trade mark within three months from publication of the trade mark;
  • Invalidation – an invalidation can be lodged against the trade mark if it is registered; or
  • Non-use Cancellation – a non-use cancellation can be lodged against the trade mark if it has been registered for over three years and no obvious evidence of use is located.

Please us contact us if you would like our advice about how to protect your trade mark in China.

Trade Mark Application Process in China

Key Aspects of the Trade Mark System in China

First-to-file principle

China has adopted the first-to-file system. This means that the party that applies to register a trade mark first will generally be granted exclusive trade mark rights in China. This means that even if you are the first party to use a trade mark in China, your trade mark application will be rejected if it has been registered by others. There may be means of redress in some circumstances but it is likely to be costly and time-consuming to get it back, with no guarantee of success.

Subclass classification system

According to the Nice Classification system, goods and services are classified into 45 classes. China has adopted a unique subclass classification system based on the Nice Classification system, further classifying goods and services in each class into several subclasses based on features of goods and services. The official Classification of Similar Goods and Services is used by the CNIPA as a main reference on determining whether or not goods/services are similar. It is regularly updated, taking account of new products and technologies.

Goods and services in different subclasses will normally be considered as non-similar unless they are specifically indicated in the official Classification that there may be overlap, so it is crucial to cover goods and services related to your business in each relevant subclass in the specification of your trade mark application in China. It is further recommended to cover all subclasses by choosing at least one item of goods and services in each subclass, even if some goods and services are not, or are barely, related to your business. This provides broader protection and may prevent the same or similar trade marks from being registered or used by others in respect of related goods and services.

Multi-class applications

Multi-class trade mark applications have been available in China from 1 May 2014, meaning one application can cover more than one class of goods or services. This can simplify portfolio management and renewal of registrations.  

Although this change was generally beneficial for trade mark owners, it is far away from perfection and still needs to be improved in many aspects. The biggest issue is that applications can only be divided when a Notice of Partial Refusal is issued by the CNIPA. This means that if an opposition is filed against only one class of a multi-class application, you cannot divide it into two applications to allow the application covering other classes to be registered first. Alternatively, if you only want to assign a trade mark application in respect of certain classes to another party, you cannot divide it into two applications to achieve this.  

The official fee is the same for single and multi-class applications, since official fees are based on the number of classes. In view of the deficiencies in the ability to divide applications, it is therefore recommended to file single-class applications in China.

Key Differences Between Trade Mark Systems in New Zealand and China

Tips for TM Protection in China

  • Conduct trade mark availability searches prior to the filing;
  • File trade mark applications as early as possible, even before entering the market;
  • Ensure your registration covers the goods and services of your main business interests. It is further recommended to designate at least one item in each subclass;
  • Maintain consistency of the English/Chinese name and address for your trade marks;
  • Create a corresponding Chinese brand;
  • Use customs to block counterfeits;
  • Keep evidence of use of your trade marks for possible non-use/ifringement cases and recognition of well-known status;
  • Apply for a Certificate of Registration for Madrid applications for enforcement purposes;
  • Register domain names and copyright. Copyright registration can provide a low cost means of preventing others from registering a trade mark and can be a good option while testing the market or while considering a range of different marks;
  • Be responsible for, and control, your trade mark portfolio; do not entrust this to your distributors/suppliers in China;
  • Be clear on trade mark use and restrictions in contracts; and
  • Seek advice on trade mark protection from experts before making any major business decisions.

Meet our experts

  • Chris Way
    Partner, Auckland

  • phone+64 9 966 9761
  • phonelink_ring+64 21 987 893
  • mail_outline.(JavaScript must be enabled to view this email address)
  • Solanda Chen 陈旭华
    Trade Mark Consultant (China Desk), Auckland

  • phone+64 9 359 7730
  • mail_outline.(JavaScript must be enabled to view this email address)