Today is our very first video from our new studio here at the office. I hope you are going to enjoy some of the videos we will be producing about trademark issues that come up in the future.
For our very first video, I wanted to discuss how important registering for a trademark in China has become for U.S. businesses. Over the last couple years, our firm has dealt more and more with issues coming out of China. For example, we have a client here in the United States that has been selling products and offering services for several years. Suddenly, they decided to expand their business to some international markets. China is a relatively common place to want to expand to, as the sheer population makes it a very desirable market.
What so many of our clients are finding out, is that when we go to file a trademark in China, somebody has already done it. There is a lot of fraud going on in China when it comes to trademark filings. One of the biggest problems with China, is that if you discover someone has fraudulently filed for your trademark, there’s not much that can be done for the first three years that the registration exists.
So, here’s what happens. Someone files a trademark in China that’s not you or your company. Once they file that application, it takes about a year and a half to get registered. You cannot oppose it unless you have previously had strong business going on in China. So, if you haven’t done a lot of business in China, you cannot easily oppose this type of application. Three years must pass before you can challenge the registration on grounds that the other company is not using the trademark in China. Essentially, you don’t have a great fraud claim. You could literally be waiting four and a half years to get your trademark registered in China. In the meantime, the owner of that registration could harass you, try to keep your product out of the market, or try to pursue infringement claims against you.
I’m telling all our U.S. clients that think there’s a remote possibility that they may do business outside of the U.S. at some point in time that they must register their trademark in China as soon as possible. It is a first-to-file jurisdiction. This means that if we get your trademark file today, it will be registered and in two or three years you’ll be all set to use it in China.
Believe it or not, there was a major law firm that did not file their trademark in China and had a Chinese law firm take their name and register the trademark. It cost them literally millions of dollars to deal with the issue. Just last year, I took my own advice and filed our trademark in China for this very reason.
A lot of people say to me “Josh, you know what. I’m a small business owner, I can’t afford to register my trademark in other countries. That’s got to be really expensive.” Well, we’ve developed relationships with local counsel in China that makes the total cost of obtaining the registration around $1500 dollars or less. Now, that’s not nothing, but if you look at the cost of having to deal with not having your trademark in China and going through a cancellation proceeding or having to pay a ransom for the trademark, it is a small, small price to pay to have security in one of the biggest markets in the world.
Today, I’m urging all my clients to strongly consider whether you need to file a trademark in China. Please feel free to give me a call if you have any further questions.