Chinese trademark registration provides many benefits to foreign-based companies. Many businesses, through manufacturing, distribution, and sales, will likely do business in China at some point. Therefore, it is best to obtain trademark registration in China as soon as possible, in order to avoid bad faith registrations and protect against counterfeiting.
As your business grows, it is important to create an international trademark plan. Even if you do not plan to do business in China, it is wise to consider registering your trademark with the Chinese Trademark Office, or CTO. Consider the following benefits of Chinese trademark registration for foreign companies.
The Ability to do Business in China
In today’s global economy, it isn’t farfetched to assume that many businesses, regardless of size or scale, may one day do business in China. In fact, with a population of over 1 billion, you may already be reaching Chinese customers. Once you factor in manufacturing and distribution channels, as well as potential licensing agreements, the likelihood that your brand will find its way to China at some point in the future increases further.
If you currently own a trademark registered in the U.S., you understand the important legal protections it provides. It’s important to note, however, that those protections only apply to disputes that occur within the United States. If you wish to gain legal protections for your brand internationally, you will need to register in the countries you wish to be protected, including China. If your business plan does not include entering the Chinese marketplace for some time, you may still want to consider beginning the process as soon as possible. This way, when you are ready to expand, your Chinese trademark will be ready as well.
Defend Against Bad Faith Registrations
Unlike the United States, which is a first-to-use country, China is considered a first-to-file country. This means that trademark rights are typically granted to the first person to file a mark, regardless of whether they currently use the mark or plan to use it in the near future. While this may benefit some new businesses that cannot immediately demonstrate use of the mark in commerce, it also ushers in more bad faith registrations.
These bad faith registrations occur when a person with ill-intent registers a trademark currently used by others, either in China or elsewhere. Their primary intent is to profit from the registration by ransoming the trademark’s ownership to its rightful owner at a much higher price. Unfortunately, victims of these bad faith registrations have few options to retain ownership of the mark. Either they file an opposition with the CTO, which can be a lengthy process or pay the ransom to the current owner. The best protection against bad faith registrations in China is to simply be the first to register your mark with the CTO.
Protect Against Counterfeiting
The sale of counterfeit goods is a trillion-dollar industry, with most of these phony products being produced in China. Unfortunately, the costs of having counterfeit goods sold under your trademark are high. From brand dilution to lost revenue, your business could see great financial effects from counterfeiting in China and around the world. In order to maintain control of the brand you’ve worked hard to create, you must register your trademark in China.
A Chinese trademark registration will provide legal protections against businesses or individuals that advertise goods with your trademark on sites like Alibaba. Without a Chinese trademark, it will be nearly impossible to have these advertisements removed. Once your mark has been registered with the CTO, you will also be able to register with Chinese Customs. If they find counterfeit products at the border, they will seize the goods and contact you to take further action. This is a valuable protection against counterfeiting, not only in China, but also around the world to areas where the goods may be shipped.
Trademark Registration in China
Whether you are currently doing business in China or you plan to do so in the future, it is important to begin the trademark registration process as soon as possible. Due to its status as a first-to-file country, the only way to protect against bad faith registrations, and the costly ransoms paid, is to be the first to register your mark with CTO. Once you’ve obtained a trademark registration, you should then register your mark with Chinese Customs to be alerted to potential counterfeiting and infringement. This will ensure that you maintain control of your brand and your company’s reputation. Contact a trademark attorney today to begin the process to register in China.