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Securing Effective IP Protection in China

Alana Long | May 17th, 2016

mdp Senior Associate Alana Long discusses the increasing relevancy and effectiveness of brand protection in this previously vexed jurisdiction.

IP protection in China has traditionally been viewed by many Australian businesses with scepticism.  With a notorious reputation for IP infringement and squatting, many businesses have questioned the value of obtaining IP registrations in China.  However, in response to the Chinese Government’s efforts to improve China’s IP system in 2014, IP registrations in China have become increasingly valuable and, in our view, are non-negotiable for businesses planning to exploit IP assets in the region.

mdp assists brand owners to register their trade marks in China (as well as other Chinese speaking regions such as Taiwan and Hong Kong). This includes both English and Chinese versions of their trade marks. Given many Chinese consumers don’t speak English, the Chinese version of a trade mark is often as, if not more important than the English version.

The Chinese trade mark office is a true trade mark powerhouse. By the end of 2013, China had recorded a total of 13.24 million trade mark applications and 8.65 million registrations, making it the trade mark office to process the largest number of trade mark applications in the world. With respect to trade marks, the numbers speak for themselves – both Chinese and foreign companies see the value in registering brands in China.

As part of the 2014 IP reforms, amendments to the Chinese trade mark law included better protections for well-known marks and a stricter approach to bad faith filings. In response to a trade mark squatting case, mdp filed an opposition to a Chinese version of our client’s English trade mark at the end of 2014. Our client already had English trade mark registrations and several Chinese trade mark registrations for the mark in question, however, it did not have a Chinese registration for the specific class of goods for which the squatter sought protection. The client’s existing registrations were insufficient to block the squatter’s application and our client had no choice but to oppose the application. We were thrilled to receive the news approximately 12 months later that the client’s opposition was successful on the basis that:

  • the squatter’s application was filed in bad faith; and
  • our client’s mark was well known in China and, therefore, the squatter’s use and registration of the mark was likely to be confused with our client’s.

It is encouraging to see that the 2014 reforms are delivering positive outcomes for legitimate brand owners. Whilst the above example demonstrates improved opposition grounds, the preferred approach for any brand owner is to obtain trade mark registrations at the outset. Having comprehensive trade mark registrations in place will permit you to block competitors/squatters and is far more cost effective than opposing third parties who seek to register your brand (be it the English or Chinese version). Given China’s first-to-file trade mark system, obtaining trade mark registrations is the best insurance policy to defeat squatters and copycats.

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