July 2023
Lihui Jiang and Jane Tsai
INTRODUCTION
For the general public and consumers, when distinguishing different enterprises or buying a particular product, they first notice the “brand”. The value of a brand for an enterprise is self-evident, but how should an enterprise protect its own brand, and what is the connection and difference between brand and trademark?
I. Brand and Trademark
A brand is a business concept commonly expressed in the form of logos, characters, colors, patterns, or the inherent style and design of branded products. Brand, as one of the core values of an enterprise, may create a substantial commercial premium if it can continuously improve its recognition and image and establish a solid connection with consumers. According to the Global 500 2023 report published by Brand Finance, a UK-based brand evaluation organization, the top 10 brands are Amazon, Apple, Google, Microsoft, Walmart, Samsung Group, Industrial and Commercial Bank of China (ICBC), Verizon, Tesla, and TikTok. Amazon’s brand is worth 299.3 billion US dollars this year.
Given such high value of the brand, enterprises need to try everything possible to protect their brands, and an indispensable step in brand protection is trademark registration. As the critical carrier and external expression of a brand, a trademark is a legal concept: the Trademark Law of China specifies that characters, graphics, letters, numbers, three-dimensional signs, color combinations, and sounds, etc., as well as the combination thereof, can be applied for registration as trademarks. In China, trademark registration is a crucial means for enterprises to protect their brands because trademarks involve exclusive rights; the infringement of others’ trademarks entails civil liability for damages or even administrative or criminal liability.
It is important to note that, as a business concept, enterprises can create brands independently to suit their purposes, images, and values without government approval or geographical restrictions. On the other hand, the registration of trademarks requires an application to the State Trademark Office. Trademarks can only be successfully registered with passing through examination & approval and other procedures. Moreover, trademarks are highly territorial, and trademarks registered in a country are protected only within that country. If protection is to be obtained in other countries, early trademark registration is required in countries that adopt the registration first doctrine. In contrast, in countries adopting the doctrine of first use, such as the United States, a trademark can only be registered when it has been actually used or will be used in the near future.
II. Key Points for Trademark Registration
1. Register the trademark as early as possible
China has adopted the system of obtaining trademark rights by registration and principally follows the principle of “first application” and the principle of “voluntary registration”, which means that the person who submits the application first usually has the right to obtain the registered trademark. Although, to suppress malicious registering actions, the Trademark Law provides that “a trademark shall not be registered for other purposes than use, and a trademark that has already been used by others and has a certain influence shall not be registered by improper means”, the protection of businesses that fail to register their trademarks in a timely manner remains weak in practice. Provided that an enterprise uses a certain logo first and it does not create certain influence, more is needed to prevent others from registering the logo as a trademark, even if it has built up a certain amount of goodwill[1].
The author noticed that some enterprises in China are very focused on the development of products and brands. Still, their legal awareness needs to be revised, and they ignore the importance of trademark registration without realizing it, which is a massive risk to the enterprises. Enterprises are recommended to register their brands as trademarks at the early stage of brand creation to be used for subsequent promotion and publicity, protection, and defense of rights.
The cross-border squatting of trademarks is a major risk that companies constantly face in the age of information globalization. It is not uncommon for a famous brand in one country to have its trademark hijacked in other countries, like when Apple’s trademark was preemptively registered in China and Hisense’s trademark in Germany. According to statistics, approximately 12% to 34% of Chinese company trademarks have been preemptively registered overseas annually[2].
2. Choice of trademark
Trademarks come in various forms and can be composed of characters, graphics, letters, numbers, and three-dimensional signs, etc. Enterprises are free to choose and design marks with distinctive features as trademarks. However, some situations, such as illegal sign content, country name or place name, and sole representation of commodity name or nature, where trademarks cannot be registered should be avoided.
Besides, Chinese consumers prefer foreign brands to have their official Chinese translations. When a foreign company registers a trademark in China, it is advisable to register the Chinese name of its brand as a trademark as well. However, in the translation, attention should be paid to avoiding the use of words that may damage the brand image. For example, the Chinese trademark of the famous French automobile brand “PEUGEOT” is “Biaozhi,” whose Mandarin pronunciation is similar to the French “Peugeot,” but unfortunately, its dialectal pronunciation in the huge market of Jiangsu, Zhejiang, and Shanghai is homophonic to “bitch”, which inevitably has embarrassed some consumers in the region[3].
In general, there are three common ways of translating foreign trademarks into Chinese. First, semantic translation, for example, “Apple” is directly translated into “apple” in Chinese, and together with its logo, it’s simple and easy to remember. Second, in phonetic translation, the foreign language pronunciation of the logo is expressed in Chinese characters; for example, the Chinese trademark of “DIOR” is “Di’ao”, which is similar in pronunciation, but the characters of the Chinese trademark does not indicate a specific meaning. Third, a combination of both, for instance, “Carrefour” is translated as “Jialefu” based on its French pronunciation, and its success lies in the fact that the Chinese trademark not only reflects the French pronunciation, but also expresses the meaning of “happy family”; another example is “Mercedes-Benz,” which is translated as “Benchi”, which not only reflects the pronunciation of “Benz”, but also expresses the meaning of a speeding car.
3. How to register a trademark
The subject of a trademark application can be a natural person, a legal person, or an unincorporated organization, and there are two ways to go about it. The applicant can register the trademark through the website of the Trademark Office (http://sbj.cnipa.gov.cn/wssq/), or go to the Registration Hall of the State Intellectual Property Office or its out-posted organizations. The second way is to entrust a qualified trademark agency. The registration process mainly comprises submission of application, formal examination, substantive examination, preliminary approval announcement, and registration announcement. A registered trademark is valid for 10 years and can be renewed indefinitely.
Notably, although foreign companies can apply for territorial extension of their trademarks in China under the Madrid Agreement, there are many foreign brands for which registered trademarks are directly applied for in China. China’s Classification of Similar Goods and Services was developed on the basis of the Nice Classification, nonetheless, there are still certain differences between the two. Since the former contains the names of more common goods and service items in China based on the practical conditions, the registration in China can protect the trademarks more accurately. Moreover, the application for and the issuance of the Madrid trademark certificate is a cumbersome and time-consuming procedure, and the same applies to the future renewal.
In addition, although a foreigner or a foreign enterprise may apply for trademark registration in China, they should to do so through a trademark agency established in accordance with the law, unless they have a regular residence or business office in China.
III. Registered Trademarks in Multiple Classes
Today, very few companies’ development strategic and plan focuses on just one or two individual products. This is especially true for some big international brands, whose global strategic often presents a trend of diversified development, and as the brands mature and grow, they will develop a variety of other related products. Therefore, quite a number of enterprises have started to consider the trademark multiple classes registration strategic in the early stage of brand creation, and register their trademarks to cover as much as possible the categories of goods and services that may be involved in their products or potential derivatives, in order to hold the initiative of brand development and protection.
Taking Apple as an example, when it applied for the trademark “IPHONE” in China in 2002, the list of goods only included computer software and hardware, and there was nothing about cell phones[4]. Hanvon Technology applied to the Trademark Office for “I-phone” as its trademark in 2004, with a list of goods including telephones and cell phones, etc. When Iphone entered the Chinese market in 2009, Apple purchased the “I-phone” trademark from Hanvon Technology at a price of 8 million US dollars[5]. Perhaps because of this unpleasant experience, Apple now pays special attention to trademark registration in China. According to the data of the China Trademark Office’s website, as of May 2023, its records of different types of trademark registrations in China totaled more than 3,800, covering all 45 categories[6].
However, this article does not advocate that all enterprises should register trademarks in all classes. All-class registration is time-consuming and laborious, moreover, according to the Trademark Law of China, if a registered trademark is left unused for three consecutive years without a proper reason, any organization or individual may apply to the Trademark Office to revoke the registered trademark. Moreover, as China has attached more and more importance to the protection of intellectual property rights in recent years, the Trademark Office has become increasingly rigorous in reviewing trademark applications; applications for trademarks with the same name as famous brands but in completely different classes have been rejected from time to time. Enterprises can deploy trademarks depending on practical conditions; for example, as of the date of this writing, the famous art jewelry brand CINDY CHAO has a total of 40 trademark registrations in China, covering 15 classes[7].
Conclusion
This is the first in a series of articles on trademark protection and provides a brief introduction to the considerations for brand protection and trademark registration. Later, we will continue the discussion on trademark squatting, trademark licensing and transfer, trademark infringement, trademark litigation, etc. You are encouraged to stay tuned for the follow-up articles.
[1] Course on Intellectual Property Law, China Renmin University Press, 7th edition, August 2021, by Wang Qian
[2] China Trade Remedies Information: http://www.cacs.mofcom.gov.cn/article/flfwpt/jyjdy/cgal/202012/167227.html
[3] Sohu: https://www.sohu.com/a/57721636_331185
[4] Sohu: https://www.sohu.com/a/72800435_348219
[5] Sohu: https://www.sohu.com/a/230733501_100129089
[6] China Trademark Office: https://sbj.cnipa.gov.cn/sbj/index.html
[7] Idem
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- Trademark Protection (4) – Punitive Damages for Trademark Infringement (Mainland China)
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