Editor’s Note: Thomas S. Babel is a member of the Litigation Section and the Intellectual Property and Business Litigation Practice Groups of Ward and Smith, P.A.

Trademark Protection in China

Like the United States, China recognizes trademark protection for marks that are distinctive. A distinctive mark is one that is not generic and that does not refer to the quality, functionality, or features of the good. If a mark is "distinct" and does not conflict with any other prior registration, it can be provided protection in China. Unlike the United States, China does not recognize trademark protection for trade dress or the shape of a product.

Governmental Administration

The Chinese Trademark Office ("CTO") is responsible for registration and enforcement of trademarks in China. Decisions of the CTO are reviewable by the Trademark Review and Adjudication Board ("TRAB"). The CTO and the TRAB are under the jurisdiction of the State Administration on Industry and Commerce ("SAIC").

The Application Process

A Chinese trademark application can be filed by an individual or an entity. However, as with patents in China, if the application is being made by a foreign individual or entity, that applicant must use the services of a registered Chinese agent to file the application. The trademark application must be made in Chinese, and any supporting documents must be translated into Chinese. In addition to information related to the exact mark for which the applicant seeks protection, a trademark application must provide an explanation of the type of goods to which that trademark will apply.

Upon submission of a trademark application, the CTO will assign it a filing date. The filing date is important because, unlike the United States, China is a first to file country. This means that the first applicant for trademark protection is provided priority over all other parties, including parties that have used the trademark in the marketplace prior to the filing date. The only situation in which a party using the trademark first is given priority is when two applications are received on the same day for similar trademarks. In that instance, the CTO will grant priority to the trademark that was used first in the marketplace.

Once the CTO concludes that an application includes all required information, that the application fees have been paid, and that the mark meets the distinctiveness requirement, the CTO will issue a trademark registration number for the mark together with a Notice of Acceptance of Application, which is a preliminary approval of the trademark. The trademark then will be published in the Trademark Gazette. Any party wishing to object to issuance of a trademark on the published mark must submit written objection to the preliminary approval within three months after the date of first publication of the preliminary approval in the Gazette. Upon receipt of an objection, the CTO will provide the applicant with a copy of the objection. The applicant then has 30 days to provide a written response. The CTO reviews the objection and response, and then provides both parties with its decision. Either party then may appeal the CTO’s decision to the TRAB.

Approval and Use of a Trademark in China

If no objection is received to the preliminary approval, or if the objection is denied, the trademark will be approved and will be recorded on the Trademark Register. As in the United States, the applicant then is provided with a Certificate of Trademark Registration. The date of registration, which is important for priority issues, is the date that the application was filed with the CTO.

A trademark in China is valid for ten years from the date of registration. Within the six-month period prior to the date the trademark is set to expire, the trademark holder may apply for an additional ten year extension.

As in the United States, a trademark may be assigned or licensed. An assignment of a trademark must be filed with the CTO. Unlike in the United States, a license agreement must be submitted to the CTO within three months after the license agreement is made. Failure to submit a license agreement to the CTO may subject the trademark holder to monetary penalties and cancellation of the trademark.

Well-Known Trademarks

One unique concept recognized in China is the concept of a "well known trademark." The CTO can deny an application for a trademark and/or can cancel a registered trademark if it is shown that the mark is a copy of a well-known trademark owned by another entity. In addition, the owner of a trademark can apply for certification from the CTO that its mark is a well known trademark. When determining whether a mark is a well-known trademark, the CTO considers: (1) how well the mark is known by the public; (2) the duration of the use of the mark; (3) how long and how much the mark has been used in advertising and other forms of marketing; and (4) whether the mark has been determined to be a well known mark in other jurisdictions. If the CTO determines that a mark is well known, that certification is good for three years, and the holder can bar others from registering identical or confusingly similar trademarks.

The recognition of well-known trademarks in China is another example of China’s effort to stop piracy and counterfeiting. Despite China’s efforts, however, it does not seem that the CTO, the TRAB, or the Chinese courts have fully accepted the concept. Recently, in connection with a challenge by Ferrari of an application by a Chinese company for registration of a trademark that was similar to Ferrari’s running horse graphic and the use of the name Ferrari, the Intermediate People’s Court in Beijing ruled that Ferrari’s internationally recognized graphic of a running horse and the name Ferrari were not well-known trademarks. In determining that Ferrari and the running horse graphic were not well known trademarks, the Court held that there was not sufficient evidence that the public in China widely recognized the trademark. The Court made this conclusion despite the fact that evidence was provided to show that the running horse and Ferrari trademarks were widely recognized throughout the world.

Enforcement

The holder of a trademark may seek enforcement of its trademark rights either administratively through the SAIC or judicially through the courts.

If it is shown that a party is using a registered trademark or is using a confusingly similar trademark, the SAIC can provide the following administrative remedies: order the infringing party to cease and desist; confiscate and destroy the goods and/or advertising materials using the infringing trademark; impose monetary fines on the infringing party; or confiscate and destroy the tools and molds used to make the infringing goods.

A party also may seek cancellation of a infringing trademark within five years after the date of registration of the infringing trademark. Cancellation of a trademark can be granted on any of the following grounds: the trademark is a copy of, or is confusingly similar to, a well known trademark; the trademark holder has abandoned use of the trademark; the trademark is being used with inferior goods; the trademark holder has modified the trademark without proper notice to the CTO; or the trademark has been assigned to another party without approval of the CTO. If the trademark is cancelled, the trademark holder can appeal the decision to the TRAB.

Similar remedies can be sought from the Chinese courts. Recently, Chinese courts have been given the power to award injunctive relief to trademark holders. Accordingly, as in the United States, a trademark holder may seek equitable relief to stop infringing conduct. The trademark holder also may seek monetary relief consisting of disgorgement of the profits or benefits from the infringing party or damages related to the economic harm caused to the trademark holder. If damages are difficult to prove, a court also can award statutory damages.

Summary

While some aspects of trademark protection in China are the same as those in the United States, some aspects nevertheless are different. These differences need to be considered when seeking trademark protection in China.

© 2008, Ward and Smith, P.A.

Ward and Smith, P.A. provides a multi specialty approach to the representation of technology companies and their officers, directors, employees, and investors. Thomas S. Babel practices in the Litigation Section and the Intellectual Property and Business Litigation Practice Groups, where he concentrates his practice in business and intellectual property litigation. Comments or questions may be sent to tsb@wardandsmith.com.

This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.