The Road to China: An Overview of the Changing Landscape for Trademarks
By: DEAN R. KARAU
November 2006
Reprinted with permission from The Business Journal. ©2006, all rights reserved. Originally entitled "The Road to China: An Important Market for Protecting Trademarks," as published in Minneapolis/St. Paul Business Journal, October 20, 2006.
“[The author’s] works are routinely pirated, [and] for the most part he receives not a penny for his work . . . .”
Someone in the recording industry complaining about the latest example of music pirating that appears to be so rampant and entrenched in China? No. These are the words of Charles Dickens, complaining in 1842 about the American government’s failure to enforce the intellectual property rights of foreign authors.
Societies follow similar patterns of growth in their recognition of, and respect for, intellectual property rights. As they transition from primarily agrarian to primarily industrial economies, societies move from being mere users of the intellectual property of others to producers of intellectual property for themselves and others to use. The inventor becomes a hero; the society begins to recognize equitable principles and reward contribution; they grow in communications skills and migrate from virtually no product advertising to extensive product advertising. As these changes take place, a society’s respect for intellectual property grows naturally. We only need compare the U.S. in the 1800s, or Japan in the 1960s and 1970s, to today to see evidence of the nature of the transition.
The current intellectual property landscape in China is problematic. But it is not only a problem for U.S. companies doing business in China. Chinese counterfeiters and pirates export numerous goods into other markets, including the U.S. market. They market at trade shows and may already be selling to your customers and suppliers.
We are watching China to see if it follows a transformation similar to the U.S., Japan, and other societies before them. Odds are strong that it will. That means that now, more than ever, it is important that you begin protecting your valuable trademarks in China.
Why Register Your Trademarks in China?
The obvious benefit of a Chinese registration is protecting the brands you use in the Chinese market. The less obvious benefit is that you may be able to use your Chinese registration to protect your brand in the U.S. market from Chinese imports bearing an infringing trademark. China is the largest single source of seizures of infringing products by U.S. Customs. While your U.S. registrations can enable you to stop the goods at the border, your Chinese registration may allow you to stop infringing goods at the source in China.
It is important to file your Chinese trademark application as soon as possible. China is a “first to file” country. Whoever files a trademark application first has presumptively superior rights, so if one of your competitors or simply a trademark “squatter” seeking a profit files first, you may be out of luck or in for a possibly expensive legal battle.
What Do You Want To Register?
Registering the English version of your mark will not only protect against infringers in the Chinese market, but also provide a tool to use in China against those who export infringing goods into the U.S.
You also want to consider registering the Chinese version of your mark. From a legal standpoint, your registration for your English version will not protect your Chinese translation. From a business standpoint, a Chinese word is more striking and easier for your Chinese customers to remember and pronounce; if you do not create a Chinese name for your product, the market may very well create one.
You also want to consider registering the “transliteration” of your mark – coining a Chinese word that “sounds” English. You need to be careful, however, to select words with a positive Chinese meaning, and pay attention to the meaning and pronunciation in other dialects.
Where Do You Want To Register?
Finally, you want to consider registering you mark in other jurisdictions of “Greater China” -- Hong Kong, Taiwan, Macao, and Singapore. Hong Kong is particularly important for protecting your marks outside of China; many infringing goods exported from China to other markets pass through it. If you have Hong Kong registrations, customs officials there can seize and detain goods and prosecute infringers. You can also bring a civil action in Hong Kong, and ask the court for a detention order and for monetary damages.
The Chinese market and its effect on other markets can no longer be ignored. Whether you do business in China or face competition from China elsewhere, now is the time to consider the value of protecting your trademarks in China.