Information about China
Population (2019 est.): 1,420,231,517
GDP: 3,608.15 billion (US dollars 2018)
GDP Ranking: 2nd largest economy in the world
Official language (for trademarks): Mandarin
Fun Fact: All of China’s railway lines put together could loop around the earth twice.
Why Australians love to trade in China
China is Australia’s largest trading partner.
In 2017 China was the destination of 29.6% of all Australian exports. As the world’s most populous country and second largest economy, China has a massive home market – a market in which Australian goods are seen as being of excellent quality and highly desirable.
China is also the source country of 17.7% of Australian imports – more than any other country., It has rapidly modernised over the last three decades, and now has sophisticated, low-cost manufacturing capabilities. Many Australian businesses are having goods manufactured in China for sale in Australia and elsewhere.
Although there are language, legal, and cultural differences, China is also situated relatively close to Australia and the two countries have had a free trade agreement (the CHAFTA) in place since 2015.
Reasons to register trademarks in China
We strongly recommend registering trademarks in China if:
you sell goods or services into China, or
you manufacture goods in China, perhaps for sale in Australia or other countries.
With the exception of famous marks, Chinese laws offer little or no protection to unregistered trade marks.
Registering your mark can deter trademark squatters. These are people who register trademarks belonging to other businesses for the purpose of selling them to (or otherwise making life difficult for) the true owner. There have been cases of trademark squatters charging in excess of $250,000USD for business to get back the trademark.
Trademark squatters are common because of China’s ’first-to-file‘ system. This means that the first person to file an application to register a trademark is regarded as the owner, even if another business has already been using that trademark extensively in China and elsewhere. The reverse is true in Australia, which has a ‘first to use’ system. If you want the exclusive rights to distribute and sell your products/servicers you need to be the first to register your trademark.
Finally, Chinese laws don’t allow trade marks to be licensed for use by others (e.g. distributors, or e-commerce channels) unless they’ve been registered.
Methods for applying for trademarks in China
Australians can apply to register trademarks in China in the following ways:
applications filed directly with the Chinese Trade Mark Office (CTMO); or
applications under the Madrid Protocol filed through the World Intellectual Property Organization (WIPO).
Applications filed with the Chinese CTMO are often processed much more quickly those made through WIPO.
Types of trademarks registrable in China
It’s possible to register any ‘sign’ which distinguishes goods and services of an individual or organisation from those of others. This includes Chinese characters, English words and letters, numbers, three-dimensional signs, colour combinations, sounds and combinations of these.
Australian businesses need to think carefully about which trademark or trademarks to register in China. Merely registering an English word trademark in China can provide inadequate protection.
Approximate timeframes for applications
The CTMO is the world’s busiest trademark office. In 2017, the CTMO received more than 5.7 million trademark applications. This was around 10 times more than the second busiest office received in the same year (the United States Patent and Trademark Office). The CTMO has struggled with this workload, and reports suggest that a ‘when in doubt, reject’ policy has led to a rejection rate of around 40%.
The CTMO has a hard deadline of 9 months to examine ‘direct’ applications, and if they are accepted at that stage, then they can be registered within about 12 months from the initial application. Madrid Protocol applications can take between 12 to 18 months.
Duration of registration
Chinese trademark registrations are valid for 10 years and can be renewed for successive 10-year periods in most cases. Trademarks registered through the Madrid Protocol are also valid for 10 years.
Key differences between Australian and Chinese trademark law and practice
China's trademark laws are structured differently from most other countries. A number of reasons contribute to this fact, including:
You can lose your trademark rights in China if you delay registration.
While China and Australia both use the international ‘Nice’ classification system to classify goods and services, China also uses a ‘sub-class’ system which can present traps for the unwary.
The CTMO can issue a final rejection of your application with little or no prior consultation. This makes pre-filing clearances even more important in China than in most other countries.
Madrid Protocol applications and registrations resulting from them can be treated as 'second class citizens'.
Although it can be difficult to license unregistered trademarks in Australia it is possible. In contrast, non-registered trademarks cannot be licensed in China.
Proof of use
Proof of use before filing is no guarantee your trademark will be approved, because of China’s ’first-to-file‘ system.
Like most other countries, China requires owners to use their trademarks after they’ve been registered. To remain valid, a trademark must be used in relation to the relevant goods or services at least once every three years. If another party applies to have your trademark removed for ‘non-use’ then you’ll have two months to prove that you’ve used the mark at least once in the three years prior to the non-use application being filed.
The cost varies depending on which trademark type and how many languages you are looking to be trademarked in. If you are interested in registering a trademark in China, give Epiphany Law a call today.