China can be a complex and challenging country for Intellectual Property, and trade marks are no exception to this.
A problem not infrequently encountered by trade mark owners is the unauthorised trade mark application, sometimes refered to as a ‘bad faith’ application. In essence, this refers to an application to register an existing trade mark, that is filed by a third party without authorisation from the trade mark owner. Typically, the trade mark for which the unauthorised application is filed is in commercial use elsewhere, although it may already be in use in China. While this is disruptive and expensive for any trade mark owner wishing to protect and use a trade mark in China, it can be particularly troublesome where, for example, a potential distributor or licensee files its own application to register that trade mark. There have been many instances of such unauthorised trade mark applications, which makes it extremely important to get the relevant trade mark applications on file in China, and ideally registered, sufficiently in advance of entering into any commercial relationship.
Filing early is of course no guarantee of registration, and unexpected complications may arise where the Chinese Trade Marks Office (CTMO) considers there to be potential for conflict between the mark applied for and existing registrations, due to similarities between the respective trade marks, and between the goods or services covered by those marks.
China has a fairly restrictive registration system for trade marks, and co-existence with earlier registrations is at the discretion of the CTMO. Where earlier marks are identified as potentially conflicting, the applicant must overcome all of the objections before the application will be allowed to continue. This contrasts with the current position in Europe, where national Registries typically allow the grant of registration notwithstanding any similarity with earlier marks, instead leaving it to the proprietors of earlier marks to make their own decision to object.
The CTMO also applies strict criteria concerning acceptable descriptions and terms for goods and services, which can be a limiting factor in overcoming citations. This type of system is not unique – the United States Patents and Trademarks Office operates along similar lines – but once an objection is taken in China it tends to be more difficult to overcome as the CTMO can be less open to discussion and argument.
There are several ways of overcoming citations of earlier marks, including filing an appeal against the citation, filing an application to cancel the earlier mark, and seeking consent from the proprietor of the earlier mark. The first two options can be relatively inexpensive, but are typically rather time consuming, and often complicated by an apparent lack of communication between departments, which can result in the timing of decisions working against a trade mark applicant. Seeking consent can, however, be relatively straightforward, quick and inexpensive, with the proprietor’s costs being the main expense. That said, it is not unusual for a consent request to be seen as a money-making opportunity, and earlier rights owners sometimes demand a significant amount of money for the arrangement. Plus, even where consent is forthcoming, the CTMO is not obliged to accept it.
Notwithstanding the disadvantages, it is recommended that rights owners seeking to do business in China protect their trade marks including, in many cases, a Chinese version (which might be a conceptual translation of the message communicated by the mark, or a phonetic transliteration). The risk of objections can be managed by searching the Chinese trade marks register before committing to a new mark, with the aim of identifying trade marks already on the register that may represent barriers to an application; in some cases, it may be possible (with the assistance of local lawyers) to draft a description of goods or services that will be accepted even in the face of potentially conflicting trade marks.
If you are considering filing a trademark in China and would like to have an informal chat about the issues involved, please contact us. We have well-established links with Chinese IP firms, and are able to offer a complete service including preliminary trade mark searches and assistance with developing Chinese versions of trade marks.