In the midst of our international lawyers handling a massive influx of foreign companies that manufacture in China looking to get out of China (See How to Leave China and Survive), we are also handling a much smaller (but increasing) influx of companies looking to sell their products online to China. We even have clients simultaneously looking to move their manufacturing out of China while looking to move sales into China.
Some of these companies have attended seminars where someone has told them how easy it is to sell products online to China. Some have attended Alibaba conferences where 3-4 foreign companies go on stage and explain how quick and easy it was for them to make millions from selling their product on TMall or Taobao or wherever. These companies are almost certainly telling the truth and I know this because our law firm has represented many companies that have made millions of dollars a month by selling their products into China. And it is in fact relatively easy to sell your product on one of the leading Chinese e-commerce platforms, particularly if you use one of the many companies that handles all of the logistics for you.
But. . . .
Our law firm has also represented many companies whose products barely sell in China.
Our job as lawyers when we represent foreign companies that want to sell their consumer products into China is relatively simply and it usually consists of the following:
1. Making sure the product is legal in China and can be legally sold to China by a foreign company without need for any special license or testing or certification. See this Forbes Magazine Article, Do This One Thing Before Doing Business in China.
2. Making sure the contract our client signs with the China e-commerce platform company actually makes sense for our client.
3. Making sure our client’s intellectual property is protected such that a Chinese company cannot immediately start selling the exact same thing with the exact same brand name. In doing this, our China IP lawyers typically start by explaining how trademarks in other countries will not protect them in China because China is a “first to file” country. This means that (with very few exceptions) whoever files for a particular trademark in a particular category gets it. So if your company’s name is Bill’s Clothing and you sell shirts and you have been doing so for the last five years and some other company (Chinese or foreign) registers the “Bill’s Clothing” trademark in China for shirts, that other company gets the trademark. If you allow some other company to register “your” trademark in China, that other company can stop you from selling your products in China using “your” trademark. This happens all the time and you selling your products online in China is like a dog whistle for trademark trolls. If you want to protect your IP in Mainland China you must register the IP in Mainland China.
But before you just go off and register a trademark in China you should think long and hard about what you should be registering. Do you register your English-language name? The answer to this is nearly always yes. Do you create a Chinese name and register that as well? The answer to this is usually yes. Should your Chinese name be a translation of your English name, a transliteration, or something unrelated? This really just depends, and oftentimes figuring this out requires both a China trademark lawyer and a China marketer. In The China Trademarks You Need, I talked about how my law firm’s clients often handle these trademark issues:
In situations where a company is making product in China for export only and their product has the trademark on it only in English, securing just an English language trademark is usually enough. In situations where a company intends to manufacture its product in China and eventually sell in China, the company should weigh the costs and benefits of securing a Mandarin (or other language) trademark now, or just wait. In situations where the company knows it will be selling its product in China right away, it needs to analyze the options set forth by IP Dragon above. I would say that in almost all instances where our client’s trademark has actual meaning (such as the word “Shell”), they have chosen to trademark both the English and the Mandarin of the word.
Rarely do our clients seek a China trademark in a language other than either English or Mandarin. Only around 25% of the time do our clients seek to secure the trademark for a transliterated or phonetic version of their English language trademark. Most of the time, they choose to wait and see how their product does in China and then, if it proves successful, they often will come back and register more trademarks on it. Waiting also allows them to see exactly what the Chinese will call their product. The downside to waiting is that someone else may register the desired name in the meantime.