There are four jurisdictions in China, Mainland China, Hong Kong SAR, Macao SAR and Taiwan, which are subject to different legal systems, including trademark law. Therefore, to obtain trademark protection in these four jurisdictions, it is necessary to apply for trademark registration separately.
Mainland China, as one of the world’s major economies, is an important market for many multinational enterprises. As the saying goes, “Business is like battlefield”. The brand (trademark) is just like the important weapon in business, and the competition for which is extremely keen in Mainland China. The number of valid trademarks in Mainland China has ranked first in the world for many consecutive years. By the end of 2022, the number of valid trademarks in Mainland China has exceeded 40 million, while the second-ranked United States has only about 10 million, making China’s trademark quantity much larger than that of other countries. What causes this?
We believe that population is not the root cause, though Mainland China has the world’s largest population. What is more important is the comprehensive factors of national conditions, the stage of development, the legal system, etc.
In our opinion, the following are the main factors leading to the large number of Chinese trademarks:
1. The Main Principle: “First-to-File”
There are two main principles of trademark registration: “first-to-file” and “first-to-use”. The “first-to-file” principle is applied in most countries, including Mainland China. What is “first-to-file”? In short, it means whoever applies first will get the registration first, which makes people scramble to apply for trademarks earlier.
2. Low Cost of Trademark Registration Application
As listed in “Global Trade Mark Application Fees” of Trasomark website, the fees in Mainland China are far lower than those of other countries. Over the past decade, Mainland China’s official fees have been continuously reduced. While our government had all the good intentions to help relieve applicants’ costs burden, it resulted in a dramatic increase in the number of trademark applications, which only created endless battles for the applicants.
3. “Trademark investors” Continuously Emerging
A large number of trademark investors have sprung up due to the increasingly low trademark filing fees. Trademark investors are those who register plenty of trademarks at a low price in bad faith, and then sell them at a high price without using them, taking “trademark registration and trading” as their business. Trademark investors seize trademark resources, making it difficult for applicants to register trademarks, which forces applicants to pay higher costs and more time.
In recent years, Mainland China has issued relevant laws and regulations to regulate the trademark investors, but in practice, the behavior of trademark investors keeps evolving, and has not been fundamentally solved yet.
Let me share some examples. We once successfully invalidated the “BHBAHDO ENO” mark for “BURANDO ENO” mark, and the “LE COUL” mark for “LEE COOPER” mark. The former is literally approximate, and the latter is not a literal approximation, but you can see the malicious imitation of the trademark investor in the two marks below.
So, what does the massive number of trademarks mean for applicants?
1. It means trademark applicants are more likely to “be crashed”.
The reason why we said trademark applicants are easily to “be crashed” is that the trademark application cannot be identical with or similar to the prior trademarks. In the case of limited trademark resources, the huge stock of trademarks naturally makes the trademark application harder. You may think that the conflicting prior trademarks are one or two, while we often encounter the situation that a trademark application may be rejected for more than one cited trademarks, even up to ten or twenty. It is extremely hard for the applicant to overcome such a large number of cited trademarks.
2. Trademark examiners are “overwhelmed”.
One side is the great application volume, the other side is the constantly compressed application period. Then, the quality of trademark examination is prone to decline. That’s to say, some trademarks those should not have been rejected are rejected, and those should have been rejected pass the examination. For example, we once represented a trademark application that was rejected for the inclusion of the nearly invisible “1921” (see the marks below), and we had to argue the dissimilarities in a refusal review before it was finally registered.
3. It is easy to trigger a new “war”.
Since trademark applications are prone to “be crashed”, the cancellation of consecutive three years of non-use (hereinafter referred to as “cancellation”) is the most common way to resolve conflicting trademarks. In other words, registered trademarks are easy to face the challenge of cancellation, increasing the difficulty of trademark management. A case in point is that, the TANGO trademark of HARDWOOD PRIVATE LIMITED was registered in 1997 and was filed for three cancellations by others in 2005, 2018 and 2021. The applicant had to deal with these challenges time and time again so as to keep the trademark valid.
Against this background, if you want to enter the Chinese market, either already in or planning to, the following suggestions may help your Chinese trademark registration go more smoothly.
1. Start trademark applications earlier, even if you are still planning.
2. It is very important to search and analysis before the application of trademark registration, so as to make overall strategy.
3. File your trademark application directly to the China National Intellectual Property Administration, rather than file through the Madrid System, so that you are allowed to adjust your filing strategy more flexibly.
4. Monitor your trademarks status regularly, otherwise you may not even know your trademarks have been cancelled.
5. Monitor the malicious registration regularly for your trademarks with certain popularity. Trademark investors are always unpredictable, making it difficult to guard against them. However, regular monitoring helps you understand the overall situation and ensures that you don’t miss the opportunity to protect your trademarks.
6. Keep in touch with your local agent. At least make sure your corresponding email address is correct so you will not miss any notices from your local agent, such as a notification of non-use cancellation.
From the above, it is clear that the trademark environment in Mainland China is very severe. We always compare trademark rules to games, and the China’s trademark strategy relies on agents like “high-end gamers”. So before applying for a trademark in Mainland China, put a great deal of emphasis on finding a reliable local agent.
RULEASY IP TEAM
About Author:
Ruleasy Intellectual Property Firm focuses on trademark field.
We are good at providing systematic solutions, dealing with difficult and complex cases, monitoring and fighting against trademark squatting.
We are full of vitality, pursuing excellence, and going for less but better.
Contact us:
Email: ruleasy@ruleasy.com
Tel: +86 021-5426 8311
Address: Room 207, Building 27, No.487 Tianlin Road, Xuhui District, Shanghai, China
