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If you are engaging a manufacturer in China to make your products, brand protection should be at the front of your mind. The best way to protect your brand is to register your trade mark in China. You will want to get in quickly to register your trade mark. China is a “first-to-file” country, meaning trade mark rights are based on whoever registers first. Therefore, you want to prevent trade mark “squatters” from obtaining a trade mark for your brand. This article will explore the registration process in China and what this means for your brand. 

Trade Mark Rights

A trade mark protects a sign you use to distinguish your business or product. For example, it could be your business name, logo or slogan. Importantly, a registered trade mark provides you with an exclusive right to use it concerning the goods and services that you offer. Thus, it can become one of the most valuable parts of your business. It gives you the ability to enforce your trade mark rights against others using the same or similar aspects of branding. 

Different registration requirements apply in each country, meaning you will need to register your trade mark in each country where you want trade mark protection. A registered trade mark in Australia does not give you enforceable rights in China. Like many countries, it is an offence to use the ‘Ⓡ’ symbol with your trade mark when selling your goods in China unless it has been registered there, even if you have a registered trade mark anywhere else in the world. Therefore, you should be careful when engaging a manufacturer based in China to ensure that your goods are not inadvertently labelled with the Ⓡ symbol when you are not entitled to do so.

Why Should I Register?

The safest course of action when having your products made in China is to apply to register your own trade mark in China as soon as possible. China is a “first-to-file” country. This means that if you are the first to apply your trade mark, you will have the exclusive right to distribute and sell your products under that brand. Suppose you do not register your trade mark. Thi will leave you vulnerable to trade mark “squatters” filing first and obtaining these rights. Trade mark “squatters” are commonly people who exploit this “first-to-file” system intending to sell the trade mark registration to you, or competitors who try to reduce your profitability. 

This system results in an overwhelming number of applications in China to remove trade marks from the register that others lodge in “bad faith”. To avoid this, try and file your application as soon as you have finalised your branding. Above all, file before you engage overseas manufacturers or distributors. You will want to ensure you maintain this right so that any third party you engage with in China does not “rip off” your brand and distribute products displaying your branding to other businesses for sale. 

Consequences of Not Having a Trade Mark

If you continue to use your trade mark when someone else owns it, you could infringe upon the owner’s rights and face hefty consequences, such as:

  • removal of products from Chinese e-commerce platforms; 
  • exclusion from trading within China; or
  • prevention of your products from entering or leaving China. 

The Original Equipment Manufacturing Exception

The ‘original equipment manufacturing’ exception to trade mark infringement provided an exemption if you were manufacturing your branded products in China for the sole purpose of then exporting them. The previous position held by China’s Supreme People’s Court was that, in this case, you might not be infringing on any previously filed Chinese trade marks, as long as:

  • your products did not enter the market for sale in China; and
  • you were the legitimate owner of the trade mark in the country to which you were exporting. 

However, since 2019, the position has been less clear. The Court reversed its position in the HondaKit case, finding that even if you do not intend for products manufactured in China to be sold there, but rather for export, there is still a risk that the products may circulate and become available in the Chinese market. 

Therefore, you could still be infringing upon a Chinese trade mark if you manufacture your products in China without your own trade mark registration. We recommend speaking to an intellectual property lawyer to understand your situation. The best way to mitigate this risk is to register your trade mark in China and each of your target export countries before approaching a manufacturer. 

Registering in China

You may choose to register your trade mark in China by either filing a:

  1. direct trade mark application with the Chinese trade mark office; or
  2. Madrid Protocol application designating China. This relies on you having an existing trade mark in your office of origin (home country). 

In either case, you will need to specify the goods and services you wish to offer under your brand. Like Australia, China uses the NICE classification system. However, the Chinese trade marks office subclassifies goods and services into further categories. For example, Class 25, which relates to clothing, breaks down into categories such as ‘Socks’ (2509) and ‘Belts’ (2512). Further peculiarities are related to China’s classification system. For example, there is a general ban on registering in Class 35 relating to retail services. This can be complex to navigate. We recommend you speak with a trade marks specialist to help you work out exactly which subclasses are relevant for your brand.

Key Takeaways 

Before sourcing your products overseas, or engaging a manufacturer to produce your goods in China, make sure you have thought about putting in place mechanisms to protect your valuable brand. Registering your trade mark in China is the best way to protect your brand. The last thing you want is for a manufacturer you are entrusting with your product design or packaging to register your trade mark first and demand you buy your trade mark off them. Furthermore, recent case law in China suggests that even if you are only engaging a Chinese manufacturer to produce and then export your products, you may still infringe upon another Chinese trade mark. To discuss your options for registering your trade mark in China, contact LegalVision’s intellectual property lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions

What does “first-to-file” mean?

“First-to-file” means that whoever applies for a trade mark first will own that trade mark, even if they did not develop it. 

If I do not sell my products in China, do I need a trade mark there?

Even if you do not sell your products in China, you may need a registered trade mark. You risk infringing upon someone else’s trade mark and facing severe consequences, such as having your products prevented from leaving China. 

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