From Far East

Importance of “first-to-file” for trademarks in China

The main problem a foreign entity faces in China is that it is a strictly “first to file” country. This means that the first company to apply for a trade mark registration, whether that company is Chinese or foreign, will obtain registration and can prevent others from using the trade mark.

There is no requirement to have any intention to use the trade mark. In some instances a foreign company has entered the Chinese market not only to find a competitor has registered the trade mark it owns elsewhere in the world, but that the competitor is seeking to enforce it against them and demanding payment to transfer the trade mark.

Chinese law does provide grounds for opposing a filed application or cancelling a registered trade mark. However, procedures can be costly and time consuming, and to succeed it is often necessary to prove that the initial application was made in bad faith. Being the first to file for registration is always the cheapest and most efficient way to secure a trade mark and prevent others from encroaching on your patch.

Applications for trade marks should be filed with the China Trademark Office (CTO) through a recognised agent. The cost of filing is low, but the benefits are substantial. Companies should have dedicated personnel or plan in place to ensure that the key trade marks are registered in China as long as the China market becomes relevant to the business.

We are all aware of the saying that “Prevention is better than cure“, but it is easier said than done. Even multinational companies with sophisticated in-house legal teams can be negligent or make mistakes. There are numerous high profile cases such as the “iPad” and “Tesla” trade mark disputes in China, wherein Apple and Tesla were involved heavily with litigations against the third parties which filed the same mark earlier in China, but ultimately have to pay dear amount of money to take assignment of those marks.

In China, any visual/audio sign capable of distinguishing the goods or services of one natural person, legal entity or any other organization from that of others, including any word, design, letters of an alphabet, numerals, three-dimensional symbol, combinations of colours, and sound, may be eligible for trade mark registration. China has not recognised scent mark yet.

Below are the formal requirements for trade mark registration in China. Currently it takes about 6-12 months to register a trade mark in China.

  1. The applicant’s details, i.e. its name, address and the Chinese translation thereof (if the applicant does not have Chinese name, the agent can do the translation including the address);
  2. The classes in which registration is sought;
  3. A definition of all the goods or services sought to be covered in each registration;
  4. Details of the priority application (if appropriate);
  5. A certified priority document and its English translation if it is not in English (if appropriate);
  6. In case of a word mark, name and font of the mark;
  7. In case of a device mark (i.e. a logo), a specimen (5-10cm) of the mark;
  8. A signed power of attorney (No legalisation or notarisation is required) authorising the Chinese trade mark agent to file the mark; and
  9. A copy of the identification certificate of the applicant (usually the certificate of incorporation for the company, and passport page for the individual).