We’re watching and experiencing China’s era of innovative brand-building and global acquisitions, as well as an increasing number of foreign companies taking their business into China. For example, last week Estée Lauder announced plans to launch a new “East-meets-West” beauty line called Osiao (pronounced O-Shao).
All this activity means that marketing managers within and outside China must keep pace with the evolving and unique intellectual property laws, including governance around trademark protection. Here are some of the challenges they’re facing around securing and protecting trademarks, as well as some suggestions for successfully navigating the hurdles.
Acquiring a trademark in China
First, as we mentioned in our last post, it can take up to three years to register a new mark in China. But companies cannot afford to wait for these results. And, like the plot of one of Samuel Beckett’s plays, companies might wait endlessly and expectantly yet in vain as frequently trademarks are refused approval based on one factor or another.
Second, China has its own unique “sub-classification” system, meaning that there are sub-classes for different goods and services rolled into the main classes. If you don’t carefully file your mark within the appropriate sub-classes (in addition to main classes), you’re potentially opening yourself up to third parties registering your mark for similar or identical goods or services. This, in turn, can potentially cause confusion amongst consumers, leading to loss of sales and the dilution of your brand.
Protecting a trademark in China
Trademark hijacking is a serious threat to both Chinese and foreign brands. Unlike in the U.S., where laws tend to favor the first user of a mark, China has a “first-to-file” system. This affects even the largest, most famous brands. Two months ago, the Wall Street Journal reported that hardware and software giant Apple agreed to pay $60 million to settle an iPad trademark dispute with a Chinese firm, Proview Technology. This was the result of Apple failing to secure its mark in China in all relevant sub-classes. Around the same time, designer fashion brand Hermes failed to stop a small Chinese clothing company from using its Chinese character name simply because the other company had filed first. Brands like Chivas and Topshop have faced similar problems.
Overall, brands seeking trademark registration in China should employ a broad, proactive and comprehensive approach. Steps to take include:
- Conduct a comprehensive availability search before filing
- File as early as possible. If you are contemplating launching your brand in China one day, start the process now
- Create and file for Chinese versions of your mark, including Pinyin and transliterated versions
- Last, you’ve heard the popular phrase “the best defense is a good offense.” To prevent third parties from using your mark and trading off its equity, file your mark in as many classes and sub-classes upfront to broaden coverage
In our next post, we will continue our discussion of naming in China. Stay tuned!
Cecilia Yu is a strategist for the Siegel+Gale Shanghai office.