Unlike the United States, which is a “first to use” trademark system, many countries, including China, follow a “first to file” trademark system. Meaning whoever files a Chinese trademark application first for a particular trademark and goods/services, which ultimately matures into a trademark registration, is considered the legal owner of the registered mark – even if that party had never used the mark in China (or elsewhere). In most cases, unless your trademark is considered “famous” (and I mean “really really famous“), if someone files a Chinese trademark application for your mark and products first, you lose.
Many cases of third parties registering a company’s trademark in China are the result of trademark pirates; those parties seeking to hold the trademarks of others for ransom. Even worse, these pirates may even sue the rightful trademark owner and user for trademark infringement in China and seek millions of dollars in damages – simply because they filed a trademark application first.
Not only do these pirates register the trademarks of others in English but they also register them in Chinese characters, since most people in China do not speak English. For that reason, it is best practice to register brand names in China in both English and Chinese. Failure to register trademarks in China can result in loss of rights, loss of market opportunity and/or many years of costly litigation (sometime 4-6+ years) over trademark rights.
Even if brand owners do not sell their products in China, they should still secure Chinese trademark registrations for their marks if they manufacture products in China for export. Under Chinese law, trademark pirates may record their registered marks with the Chinese customs authorities in an effort to seize your products at the border. Once seized, the pirates request ransom in exchange for the release of your products.
Trademark theft and piracy is an industry in China, as well as some other counties. Not only should companies consider registering their trademarks in those countries in which they do business and/or conduct manufacturing, they should also reserve certain country domain names that correspond to those trademarks to keep them out the hands of Internet pirates (a/k/a domain name squatters).
How Can We Help Brand Owners?
- Audit your current global trademark portfolio for gaps in trademark protection
- Provide a list of “first to file” countries for review
- Provide guidance with respect to goods and services coverage
- For non-English speaking countries, such as China, provide Chinese versions of your trademarks (provided by English and Chinese speaking trademark specialists)
- Review your marks for any negative connotations in non-English speaking countries
- File global trademark applications to protect marks vulnerable to trademark piracy