Registration of your trademark in China is a basic necessity before undertaking business with China. It’s important to know that it doesn’t apply only to exporters. Importers should also remember about registering their brand if they display it on the product, packaging, or any printed materials. Why is it so important? In the Chinese trademark law, there is a rule „first to file”. It means that someone else can register your trademark. Consequently, they will deprive you of the right to use it in the territory of China. Unfortunately, trademark squatting in China is a common practice. In the article, we explain why is it crucial to register your trademark in the People’s Republic of China before someone else precedes you.
Even a giant such as Apple had problems with the protection of the trademark in China.
Trademark in China is registered on a “first to file” basis. The logo will be protected for the person who first applies for registration of the trademark. The registration should be considered both by people interested in exporting to China and those planning to import goods from China.
Recently there was big news about the collaboration of technological giant Samsung with the fashion brand Supreme. The companies announced their plans to enter the Chinese market together. Soon it became clear that the Supreme cooperating with Samsung was not the original Supreme founded by James Jebbia. How did it happen? Samsung establishing a partnership with the fake Supreme was possible because the New York brand doesn’t have rights to their trademark on Chinese territory. So, we decided to investigate who has the rights to Supreme in China.
China is not only the source of cheap labor and the manufacturer of various goods, which are being sold in every corner of the world. It is also the home of emerging middle class, and the big potential market for every Western company willing to take the risk. If you have a good product, you may try to enter the Chinese market, but without the proper legal protection of your trademark, implications for your business may be huge.
About ten years ago Starbucks, the American global coffee company, decided to enter the Chinese market and open their coffee houses there. “Starbucks” was translated to Chinese as Xingbake (星巴克), but the corporation realized that this particular trademark is already registered by an entity known as Shanghai Xingbake Co. Ltd. And if that’s not enough, the Shanghai company started to open its own coffee houses, which very much resembled the original ones, with the close copy of its world-renowned logo. Finally, the case was settled by the Shanghai court after two years of proceedings – Shanghai Xingbake was ruled to stop copyright infringement practices and pay the compensation of 500 000 RMB. This case is the important lesson in China’s copyright protection situation – the whole dispute might have never take place, if only Starbucks had taken certain necessary steps before entering the Chinese market.