KNOWLEDGE BASE Trademarks and Patents China
Trademarks and Patents in China
Trademarks and Patents are both types of protected intellectual property and are considered an important intangible business asset. Acquiring a trademark or a patent can give business partners and investors more confidence in your business, which can help you work with and find more partners and to raise equity. Not only do trademarks and patents protect your creations, but they can also maximize the value of your creation because you have the ability to license them out or sell them outright.
Intellectual property rights are territorial, meaning you are only protected in the countries in which your trademark or patent is registered. In countries like China, that are manufacturing hubs, intellectual property rights are perhaps more important because so many companies share their valuable IP information. Infringement by manufacturers is common in China.
It is often important, if not necessary, to register your trademark or patent in the country where you manufacture to protect your ability to continue to manufacture there. This is often done as a defensive strategy to keep infringers from filing for your trademark before you do. If another person or company files for your mark in China before you do, you could be effectively kicked out of that market. In this situation, you could be forced to purchase the mark (if it is for sale) or to find another place to manufacture your product. Furthermore, companies should consider the location where they manufacture products as an early key market.
China has counterfeit and trademark squatter problems, so your mark could easily be at risk if you don’t protect it. These specific problems could arise as soon as or even before you start doing business in China. To learn more about the importance of trademark registration, read Globig’s Why Startups Shouldn’t Overlook International Trademark Protection article and listen to Globig’s podcast, International Trademarking.
The Chinese intellectual property rights system, including its laws, processes, and enforcement are complex, expensive, and favor Chinese companies and citizens. If you decide to manufacture or sell in China, work with a local expert immediately to determine when to register your trademark in China.
Foreign applicants without residency or a local place of business are required to file trademark and patent applications through a local Chinese trademark or patent agent who will deal directly with the China Trademark Office and the State Intellectual Property Office.
Trademarks In China
What is a trademark?
A trademark is a sign or mark that you use to identify and distinguish your company’s goods or services from another company’s. By registering your trademark, you can prevent others from using it. Once a trademark has been registered, it is protected indefinitely as long as you renew it every 10 years and actively use the trademark. In China, three years of continuous failure to use a mark will make it subject to cancellation.
To show you have a registered trademark in China, you can use the words “registered mark” or display the ® symbol next to your trademark.
What laws and regulations apply?
The primary legislation that regulates trademarks in China is the Trademark Law of the People’s Republic of China and the Implementing Regulations of the Trademark Law of the People's Republic of China.
China is a 'first to file' jurisdiction, meaning that someone can file for your name and logo and even if you have been using them, they can be granted the trademark if they file first. It is very important that you file your trademark application as soon as you make the decision to do so.
How do I apply for a trademark in China?
You can apply for a trademark through the China Trademark Office (CTMO). Applications can be filed in person, by mail, or online. Applications must be filed in Chinese (Mandarin).
Before filing for a trademark, complete a thorough trademark search to ensure you do not register a mark that is already registered to someone else. The trademark search database includes preliminary approvals, approvals, renewals, and modifications or all trademarks and is available in Chinese and English.
Because the registration of a trademark in roman characters does not automatically protect the mark against the use or registration of the same or similar mark written in Chinese, it is highly recommended that you register a Chinese version of the mark too. You should carefully choose a Chinese equivalent because the meaning, sound, tone, and look of Chinese characters can affect your brand’s reputation. Note: this would involve two separate registrations. We recommend that you work with trademark, marketing, and PR experts, as well as native speakers and translators to develop your Chinese equivalent.
How do I register my Chinese trademark with Chinese customs?
Although protecting your trademark in China requires that you first apply for a Chinese trademark, if you want additional protection for your trademark, you should register your Chinese trademark with Chinese customs. This additional registration is particularly important for companies exporting goods out of China. This registration protects companies from trademark counterfeiting, but is not legally required. Registering your Chinese trademark with China Customs, if the only way Customs will help in seizing infringing goods.
Registering your trademark with China customs is easy and inexpensive, but you must do so through a PRC agent registered with China customs. Most law firms that do a substantial amount of Chinese IP work have an agent.
How do I apply for an international trademark?
For international trademark protection, you can either file an application in each country in which you wish to have your trademark protected or you can register your trademark internationally through the Madrid Protocol. The Madrid System allows you to file one application in a single office (in Switzerland) in one language (English, French, or Spanish) with one fee (in Swiss Francs) to protect your trademark in up to 95 member countries.
If you decide to file your application internationally, you must first register or file an application in your “home” office, in this case China. Then you will need to submit your international application with the International Bureau of the World Intellectual Property Organization (WIPO). Details of your application in the Madrid System will be sent to the IP offices in each country you wish to have your trademark protected. The countries in which you seek to register your trademark must be Madrid Protocol member countries, which China is. Each country will make a decision in accordance with their legislation and record their decision with the WIPO.
The international registration of your trademark is valid for 10 years and can be renewed at the end of each 10-year period directly through the WIPO.
Patents In China
What is a patent?
A patent is another type of protected intellectual property that is also considered an important intangible business asset. A patent protects the owner of an invention by preventing others from making, using, selling, or importing the invention without the owner’s consent.
What laws and regulations apply?
The following laws and regulations govern patents in China:
How do I apply for a patent?
You can file a patent application directly with the State Intellectual Property Office (SIPO). Keep in mind, nonresidents must file an application through a qualified, local agent (attorney). Foreign Invested Enterprises (FIE) however, can file a patent application in China without an attorney, but this is not recommended. Patent applications must be filed in Chinese (Mandarin).
How do I apply for an international patent?
If you determine that you need protection beyond China, there are different routes you can choose from to obtain an international patent:
1) directly file separate applications in each country in which you are seeking patent protection; or
2) file an application under the Patent Cooperation Treaty (PCT) directly or within 12 months of filing your first application, which is valid in all PCT contracting states. Filing for patent protection under the PCT is simpler, easier, and more cost effective.
The World Intellectual Property Office (WIPO) provides information and steps to apply for an international patent through the Patent Cooperation Treaty. The PCT Applicant’s Guide provides up-to-date information on the international and national phases and important forms. The PCT process is divided into two parts, the international and national phases.
What are the risks of noncompliance?
Chinese courts, the Administration of Industry and Commerce (AIC), and the General Administration of Customs (GAC) can enforce intellectual property rights in China. No person or company can use your registered trademark or patent without your consent. Infringers are subject to administrative, civil, customs, and criminal penalties. Damages for infringement are calculated using the illegal profit the infringer made and the actual losses the owner had. The maximum compensation cannot exceed RMB 500,000 (approximately US$ 74,000).
In China, you have the added protection of Customs, which can enforce intellectual property rights. GAC has the authority to confiscate infringing goods, impose fines, and arrange for criminal proceedings to be brought against an infringer. IP rights can be recorded with GAC in Beijing, which allows GAC and local customs to more effectively protect your IP rights.
Although enforcement measures were difficult in the past, intellectual property protection through the Chinese court system has improved, particularly in large cities. Still, enforcement of intellectual property rights is problematic in China because it is difficult to catch pirates and serial pirates are not deterred because the penalties and fines are so lows.
Intellectual property protection is very important to any business, and thus, needs to be a top priority whenever you expand into new markets. Furthermore, the trademark and patent application processes are complex, time-consuming, and long. Determine your need for protection and begin the application process early in your expansion planning. Keep in mind, we highly recommend that you work with an IP attorney throughout your trademark and patent application processes.
KNOWLEDGE BASE Trademarks and Patents China