In today’s global economy, it is smart to consider trademark registration in China.  Whether you plan to manufacture your product in Beijing or you already reach customers in Shanghai, it is important to begin the process as soon as possible.  Bad faith trademark registrations are on the rise in China, and the best way to avoid this challenging situation is to register early.  However, there are options if you find your trademark has already been registered in bad faith.  Consider the following information about bad faith registrations in China, and what you may be able to do about them.

What is a Bad Faith Trademark Registration?

A trademark is considered registered in bad faith when a person knowingly registers a trademark with the intent to profit from it and/or hold it hostage and seek a ransom from the true owner  One way that people profit from a bad faith trademark registration is by selling counterfeit goods using the mark.  Another common scenario is a business or individual registers a trademark with plans to ransom the mark to its foreign owner for a much higher price.  In any instance, trademark owners have a challenge ahead to take ownership of their trademark once it has been registered in bad faith in another country.

While bad faith trademark registrations occur throughout the world, China is a well-known leader in the practice.  Several factors contribute to this, but one of the major reasons we see bad faith registrations in China is the trademark law itself.  Unlike the United States, which is a first-to-use country, China has a first-to-file policy on trademarks.  Therefore, the first person to file a trademark registration in China is typically granted the rights to the mark in that country.  This gives people with ill intent motive to rush to register foreign trademarks before their owners have a chance.

What can you do about it?

The best way to avoid a bad faith trademark registration in China is to register in the country as soon as possible.  While there are other options listed below, they are far more time consuming and costly than simply being the first to register your trademark in China.  If filed within six months of your U.S. trademark filing, you are able to claim your U.S. priority date in China.  If more than six months have passed, the date that you file in China will become your priority date.  Either way, anyone filing a similar trademark after your priority date will likely have their application rejected.

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If you learn that your trademark has been registered in China before you’ve begun the process, you may still have options.  You may start by considering adopting a slightly different name for the Chinese marketplace.  Aside from the obvious issues with having to use a different brand name in China than in other locations around the world, this solution, if available, is one of the easiest remedies.  Another, much less appealing option is to simply buy the trademark from its current owner.  Typically, buying a trademark from a bad faith registrant is much more costly than obtaining your trademark through the trademark office.  However, the process to buy the trademark will most likely be much quicker.

In recent years, China has attempted to curb these bad faith registrations, and there are legal options to fight against them.  For example, if it’s been at least three years since the mark has been registered, and the mark has yet to be used in the Chinese marketplace, you can file a non-use cancellation.  Non-use is often much easier to prove than bad faith, but no action can be taken to file this cancellation until the three-year time period is up.

If you feel that your trademark was registered in bad faith, you can also file an opposition directly with the Chinese Trademark Office within five years of registration.  Unfortunately, this approach may take years, and proving bad faith in China is extremely difficult.  The law states that the mark must already be well known in China, which, for many foreign businesses looking to enter the market, is not the case. Most foreign businesses and individuals that file an opposition on a bad faith registration do not succeed in their challenge.  If you wish to fight a bad faith trademark in China through the legal process, waiting three years to file a non-use cancellation may be your best option.

When filing for a trademark, whether in the U.S. or internationally, it is best to work with an experienced trademark attorney.  The process will begin with a comprehensive trademark search, which will alert you to any similar trademarks in that country.  Then, you and your attorney can work together to determine if there is still a path toward registration.  For Chinese registrations, it may be as easy as changing your trademark translation, or, more often than not, you may need to wait three years to file a non-use cancellation.

While you do have options when it comes to fighting bad faith registrations, the best defense is always a good offense.  Beating a bad faith registrant to the trademark office is the easiest solution.  Instead of waiting three years or more to own your trademark in China, you can begin the process to protect your trademark now.  You can register your trademark in China as soon as you file with the USPTO.  In fact, if you file your Chinese application within six months of your U.S. application, you can use your U.S. priority date in China as well.  Work with your attorney to outline an international trademark plan, and begin the process of registering in China today!