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WHEN To Register Your China Trademark.

Posted in Legal News

I am always preaching how foreign companies must register their trademarks in China if they are going to be doing business in or producing product in China (see, for example, “China Trademarks — Do You Feel Lucky? Do You?“). And in most cases, companies should register their trademarks in China now. Right now.

China is a first to file country. This means that — with very few exceptions — whoever files for a particular trademark in a particular category gets it. So if the name of your company is XYZ and you make shoes and you have been manufacturing your shoes in China for the last three years and someone registers the XYZ trademark for shoes, that other company gets the trademark. And then, armed with the trademark, that company has every right to stop your XYZ shoes from leaving China because they violate its trademark.

But saying a company must register its trademark if it is going to do business in China does, at least to a certain extent, beg the question as to when that company should register the trademark. I always tell our clients and potential clients that they should register their trademarks right away. My thinking on this is that if they are going to be doing it anyway, they should do it right away so as to make sure nobody beats them to it.

But what if you are an American company that is thinking of introducing your product into China in a couple of years? What do you do? Well if you are a massive company with a lot of money, you go ahead and register your trademark right now. But if you are a small company, spending the money now may or may not make sense. Where and how do you draw the line? There is no one answer here; it is more a case of knowing it when you see it.

I thought about all this yesterday because I received a call from a small company that was referred to me by a China sourcing company we represent. The China sourcing company had the foresight to tell this other company (let’s call it Company A) that it needed to register its trademark in China before the sourcing company started going out and trying to find manufacturers for Company A’s product. But when I spoke with Company A, it immediately became clear to me that its funds were very limited and that it was unsure if it would be able to find a Chinese manufacturer at a price that would make sense, and if it did find that manufacturer, whether its product would catch on or not. Company A’s not unreasonable plan was to make a limited quantity as a test run and then, if that worked, secure financing to ramp things up.

Company A: Is a trademark really necessary in China?

Me: It is necessary if you are going to be sure to protect yourself from someone taking your name from you. How important is your name to you? If someone takes it, could you stamp a different name on your product for the next go round?

Company A: I really like our name, but I could always come up with a new one if that were to happen. Do you really think someone is going to register our trademark right away in China?

Me: The odds certainly favor you, but you just never know. You can consider waiting until after you see if your product will have legs.

Company A: I would prefer to do that. Am I taking a huge risk?

Me: A lot depends on whether the worst case scenario of having to come up with a new name is terrible for you or not.

You will never get me to say anything other than how important it is to register your trademark in China right away (because I do not want anyone to be able to blame me if “their” trademark is registered by someone else), but obviously the decision on when to register is sometimes a bit more complicated than that.

What do you think?

  • Brad

    Yet another expense in doing business in low-cost China. What concerns me with your post is the mention of not being able to ship products out of China if someone else owns the trademark. This seems unreasonable, but I realize that if that is the law then that is the law. It also seems like an area where vultures will swoop in and willy nilly register trademarks to hold the foreign company ransom, much like domain name registers who file for hundreds of domain names with no business or website affiliation.

  • Falen

    It is also the case that if registering a trade mark is too expensive for any given company, chances are trade mark vultures won’t waste their money on “kidnapping” the company’s trade mark since they won’t easily get paid. Chase the money, chase the ambulance; lawyers should be very familiar with this.

  • http://www.wjnco.com Maarten

    Registering a trademark is not expensive, and a lot cheaper than having to retrieve a trademark once it is gone. One problem though is that one trademark is not always enough – should the Chinese version be protected as well? And should protection cover more than one class? It all adds up. In any case, I agree with your conclusion: if you cannot change the name because it has been in the family for a century, it’s probably a good idea to take this precautionary measure at a very early stage.

  • http://adamdanielmezei.com Adam Daniel Mezei

    Dan,
    I’m curious if you might be persuaded to write a post about a specific client of yours who was forbidden from dispatching Chinese-manufactured product from the PRC in the above-mentioned XYZ example you mention above?
    I can just imagine what their reaction would be, though I’d like to see how far it can potentially go…

  • Esa

    If I have product what I want to produce in China, and I have plan to register trademark in China. What about if some one allredy have this trademark registerd in China, even that trademark is from totally different business area. Is it still possible to me to produce it in China and have this trademark and sell this product to Europe market?

  • http://attorneydirectoryofamerica.com Attorney

    There is absolutely no doubt about it, you are 100% correct, it is imperative to register your trademark in China before another person or entity does. This is so important. this issue should move to the top of the list of priorities, and is not something to set aside and do at a later date.

  • http://www.completeip.com.au The IP Guy

    Take Lisa’s, Attorney’s, and my advice.
    Get your trademark professionally registered in all countries you (intend to) trade your products and services.

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  • Kzatakia

    If I have a product that I want to produce in China, and I have register trademark in India. What about if some one already have this trademark registered in China, Is it still possible to me to produce it in China?

  • louise

    share , if a foreign brand and register in china by not original owner, then can this register company still has right to produce and sell the goods in china? did he need to have official Authorized letter from original owner aboard .