Trade in China – Using IP to defeat Piracy

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By Stuart Gibson, Partner and Cassandra Taylor, Lawyer

In the last two years, intellectual property and in particular the number of trade mark registrations has exploded in China.  China is now a sophisticated jurisdiction for the registration of overseas IP.  A key reason for this is that it has become notoriously difficult for overseas exporters to manufacture and export their own branded products from China without their trade mark registered in China.  This is even if they do not have a trading presence in China.

The problem is this – local Chinese pirates and trade mark squatters are registering foreign trade marks for themselves.  This means that those pirates and squatters can prevent goods being exported from China on the basis that the pirate holds the trade mark registration relevant to those products.  This can have catastrophic consequences for importers trying to import goods from China to Australia or those businesses wishing to enter the Chinese marketplace to expand their brand.

Here are some strategies for avoiding piracy of your trade mark in China:

1. Early registration

In the absence of any strict enforcement against trade mark squatters, trade mark owners are urged to file trade marks in China as soon as possible.  If you are thinking about expanding your brand to China or currently import goods from China, you should file immediately and in as many classes of goods and services as possible.  The broader the goods and services, the better protection afforded.

2. Multiple registrations

As China does not require a trade mark owner to prove intention to use a trade mark, you can register multiple trade marks.  This will help protect you if you intend to use a mark in the future or alternatively, prevent a pirate from registering a ‘pirate’ trade mark in China.

3. Registering translated words

In addition to registering your English language trade marks, you should also register the Chinese equivalent to prevent pirates or squatters from pirating your brand in the Chinese marketplace.  When doing this, you need to ensure that the translated version is widely accepted as the correct term amongst the Chinese – local expertise is essential.

4. Copyright claims

Piracy may be overcome in instances where a copyright claim can be made in respect of the trade mark.  Chinese copyright protection can exist where the trade mark pirated is either stylized or a logo mark.  It is irrelevant which goods or services the trade mark is registered for.  The main obstacle to overcome is that the work (i.e. logo or stylized trade mark) is original.

5. Opposing or invalidating bad-faith registrations

If your trade mark has already fallen victim to trade mark squatting, you may be able to oppose its registration, if it has not been accepted yet or invalidate its registration, if it has.  However, opposing or invalidating a bad-faith trade mark application has proved difficult and expensive.  The original trade mark owner will need to provide as much evidence as possible to prove the trade mark was applied for in bad faith.  Factors include the following:

  • that the original trade mark owner has copyright in the mark; or
  • that the mark was used by the original owner in China prior to the bad-faith registration; or
  • whether the bad-faith applicant is a known trade mark squatter or pirate.

6. Cancellation for non-use

After three years of registration, an aggrieved party can apply to have a ‘pirated’ trade mark cancelled on the grounds of non-use.  The burden is on the so-called pirate or squatter to prove it has used the trade mark over the three year period, which also excludes the time in which the trade mark was opposed.

For further information, please do not hesitate to contact us.

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