|
Trademark Registration and Protection in China
By Margaret
Lu and Yuping Wang
[April 2004]
China has been revising its trademark laws and regulations to bring
them more in line with WTO rules and to provide companies with a
better business environment with regard to intellectual property
protection. The purpose of this article is to help U.S. companies
understand the ever-evolving procedures governing the registration
and protection of trademarks in China.
Trademark Administration Bodies
China employs a centralized trademark registration system. The
Trademark Office within the State Administration of Industry and
Commerce (SAIC) (Trademark Office) is responsible for the registration
and overall administration of trademarks. The local counterparts
of SAIC, the Administration of Industry and Commerce (AICs) have
established trademark offices to handle trademark administration
and enforcement at local levels. The Trademark Review and Adjudication
Board (TRAB) within SAIC is responsible for handling trademark registration
disputes.
Registration
A U.S. company doing business in China should first ensure that
its trademarks are properly registered in China. All marks for goods,
services, collective marks and certification marks (collectively
referred to as "trademarks") can be registered, provided
they meet the stipulated requirements for registration. Although
registration is highly recommended, it is not mandatory, except
in the case of trademarks used on specific goods such as pharmaceutical
and tobacco products, which must be sold bearing registered trademarks.
Foreign individuals or enterprises must use authorized local agents
in seeking trademark registration and handling other trademark related
matters.
China employs a "first-to-file" system for trademark
registrations, rather than the "first-to-use" system generally
adopted in the United States. Since China and the United States
are both members to the Paris Convention, a U.S. company that has
applied for registration of a trademark in the United States may
be regarded as having applied for the same registration in China
on the same date, provided the application in China is filed within
six months of the U.S. filing date. China's requirements for obtaining
a trademark registration are basically the same as those in most
other countries; namely, the trademark must be distinctive, and
must not conflict with an existing registration.
Many companies also seek trademark registration in China as a defensive
measure, applying for registrations in as many categories of goods
and/or services as is viable. While most U.S. companies tend to
register trademarks on goods and/or services related directly to
their businesses, they often discover that their trademarks are
registered by others in categories in which they, themselves, do
not think it necessary to register. Defensive registrations waste
resources, since a company may obtain registrations in categories
having nothing to do with its existing businesses. Such defensive
registrations nevertheless effectively prevent any later applicants
from registering the same or similar trademarks in the same or similar
categories, even if the later applicants may have a much longer
history of use, or a greater reputation in using the trademarks.
In such cases, there are few options available for the later applicant
to contest the prior registrations, unless it can prove that its
trademarks are well-known or that the prior registration has not
been used for a consecutive three-year period. Because of these
difficulties, many later applicants resolve the matter by purchasing
the previous registrations.
As in the U.S., each new application will be preliminarily screened
by the Trademark Office. The preliminary screening is a fairly straight-forward
process, and the Trademark Office has a centralized database of
all registered or applied-for trademarks. A trademark application
which passes the preliminary screening will be published in the
Trademark Office's gazette for public objection for a three-month
period. The Trademark Office will subsequently issue a registration
certificate if nobody raises any objection within the said three-month
period, or if the objection is rejected by the Trademark Office.
However, if any objection is supported by the Trademark Office,
the Trademark Office will deny the application. The Trademark Office's
decision may be reviewed by the TRAB, and the TRAB's decision may
be judicially reviewed by the People's Court, upon request.
Protection
There are four basic ways in which U.S. companies may protect their
trademarks in China.
Preventing registration of infringing
trademarks
The first method of protection is for a company to prevent others
from registering trademarks that are the same as, or similar to,
its trademarks. As previously discussed, defensive registrations
are an effective way of preventing later applicants from registering
in the same categories. In addition, it is advisable that a U.S.
company use an authorized local trademark agent to monitor possible
infringements of its registered trademarks. Although its preliminary
screening function serves to eliminate identical or highly similar
marks, the Trademark Office checks similarity in a rigid and prescribed
manner. Also, the Trademark Office may not be able to identify certain
similarities; and it has no way to determine whether an application
has been filed in bad faith. However, using their professional judgment,
local trademark agents are able to spot applications that could
prejudice a trademark owner's interests. Once spotted, a trademark
owner may raise objections to such applications based on certain
legal grounds.
In addition to the foregoing, when doing business in China, a US
company should always contractually prohibit or restrict its business
partners/distributors/licensees from registering its trademarks.
It is advisable to seek legal advice as to the degree and depth
of such prohibitions and restrictions, depending on the company's
business practices.
Canceling existing registrations of infringing
trademarks
The second method of protection is to seek to cancel existing registrations
of trademarks that are the same as, or similar to, the company's
trademarks. Once a trademark that infringes its trademark rights
has been registered, a trademark owner may request the TRAB to cancel
the registration by citing, for example, any of the foregoing grounds:
- The trademark lacks distinctive character;
- The registration was obtained through cheating or other illegal
means;
- The trademark is a reproduction, imitation or translation of,
or is similarly confusing to, a well-known trademark that is not
registered in China, and the registration is for identical or
similar goods and/or services;
- The trademark is a reproduction, imitation or a translation
of, or similarly confusing to, a well-known trademark that is
registered in China, and the registration is for non-identical
or non-similar goods and/or services;
- The registration violates the prior rights of another party;
or
- The trademark has not been used for a consecutive three-year
period.
Pursuing infringements and counterfeits
The third way to protect trademarks is to pursue infringements
and counterfeits. Where infringements and counterfeiting have taken
place, a trademark owner may take one or more of the following approaches
to protect its rights:
- The owner may complain to AICs. The AICs are empowered to question
the concerned parties, to review and copy documents such as account
books or contracts related to the infringing acts, and to conduct
on-site inspection on the infringer's premises. If infringement
is proven by AIC's investigations, the AIC may order the infringer
to cease its infringing acts, confiscate or destroy the concerned
goods and tools, and fine the infringer. The advantages of the
AIC approach are that the AIC generally is quicker to take preventive
or enforcement measures; and AIC enforcement is a government action,
and thus is relatively inexpensive to pursue.
- The trademark owner may initiate a legal action with the People's
Court. People's Courts play a very active and positive role in
protecting trademark rights and punishing infringers. The People's
Courts allows plaintiffs to apply for injunctive relief if the
plaintiff believes that failure to immediately stop the infringing
acts would cause further non-remediable damages. Compared with
the AIC approach, a court action involves judgment and enforcement
steps and has higher requirements for the presentation of evidence.
- The trademark owner may request Customs to seize counterfeited
products. Such an approach is particularly suitable for famous
brand products, the counterfeited versions of which are rampantly
circulating across borders.
The above three approaches are not mutually exclusive and may be
pursued in combination. The evidence and findings in one proceeding
may be used in another.
Managing use of company trademark
The fourth way for a company to protect its trademarks is its own
proper use and management of its trademarks. For example, a company
licensing its trademarks to another person or entity should enter
into a trademark license agreement with the licensee, and such license
agreement should be recorded with the Trademark Office. In addition,
many U.S. companies have internal trademark education programs which
are designed to instruct employees on how to properly use and protect
trademarks in their daily operations. Such a practice enables a
company to protect its trademarks on a company-wide basis, rather
than treating trademark issues as the responsibility of only the
legal department.
Well-known Trademarks
A well-known trademark is defined in China as one that is well-known
to the relevant general public and enjoys a relatively high reputation.
Most companies make efforts to have their trademarks recognized
as well-known trademarks, because well-known trademarks enjoy certain
privileges, facilitating their protection. For more information
on the well-known trademarks, please see DWT's Recognition
of Well-known Trademarks.
Madrid Protocol
Effective Nov. 2, 2003, the United States of America became a member
of the Madrid Protocol. The Madrid Protocol is a centralized international
trademark filing system administered by the World Intellectual Property
Organization from Geneva, Switzerland. China has been a member of
the Madrid Protocol since 1995. U.S. trademark owners may benefit
from the Madrid Protocol by filing one trademark application in
the U.S. and expand its protection into several foreign countries,
including China, in a cost effective way.
The above is a summary of the mechanisms for the registration and
protection of trademarks in China. It is not intended to be a comprehensive
discussion of the subject matter, or to provide legal advice.
If you have questions or would like further information, please
contact:
Ron Cai, Resident Partner,
Shanghai Office, roncai@dwt.com
Alexandra Nicholson,
Practice Group Chair, IP Practice, allienicholson@dwt.com
Published by DWT's China
Practice Group
This China Practice Article is a publication of the China Practice/Shanghai
Office of Davis Wright Tremaine LLP. Our purpose in publishing this
Article is to inform our clients and friends of recent legal developments
in China. It is not intended, nor should it be used, as a substitute
for specific legal advice as legal counsel may only be given in
response to inquiries regarding particular situations.
Copyright © 2004, Davis Wright Tremaine
LLP.
return to Advisory Bulletins
main page
|
