China Trademarks: More Useful and More Necessary Than Ever

There is little to cheer about China at the moment, but one area where things are generally improving is IP protection, especially when it comes to trademarks.

My first experience working on China IP matters was as a political-economic officer at the U.S. Consulate General in Guangzhou in the mid-2000s.Back then, law enforcement raids against infringers were a rarity. Counterfeits were openly sold at stores located inside the Luohu Port in Shenzhen (not just the adjacent shopping center), which is as if CBP leased space to gun sellers at border crossings with Mexico.

By the mid-2010s, raids against infringers were commonplace, even if the target selection and seizure protocols left much to be desired. The Luohu Port was cleaned up by then (though not the adjacent shopping center, which remained a notorious hotspot for fakes). However, the first-to-file system for trademarks was implacable.

If someone beat you to trademark office and registered your mark first, it was pretty much game over. Discovering that your mark had been registered by a squatter hoping to make a quick buck from selling it to you was not the worst thing that could happen. Far worse would be for the mark to be registered by someone who had every intention of cranking out goods with your mark on them (or your supplier, who could now hold the trademark above you like the proverbial Sword of Damocles). The option of claiming your mark enjoyed “well-known” status was an option, but in practice the standard was “known by everyone in China including the 大妈 who sells drinks and cigarettes across the street.”

As we make our way toward the mid-2020s, we continue to see gradual progress. A prior filing by another party is not the game-ender it once was. The Chinese authorities are getting fed up with squatters, and will no longer suspend common sense when dealing with some random dude in a fourth-tier city with 120 trademarks to his name. Prior use is far from being the bedrock of the trademark regime as it is in the United States, but it increasingly matters.

These days, oppositions and invalidations are on the table as practical options, in ways that practitioners only dreamed of not that long ago. This is not to say that squatters and other bad-faith registrants are no longer a problem, but the outlook is less grim when it comes to dealing with a prior filing.

This is great news in light of the overall tenor of China trade and the evolving risks faced by foreign companies. As suppliers in China see no signs of a rapprochement with the United States and its allies, they naturally worry about the long-term viability of relationships with clients from those countries. These uncertainties can tilt their calculations in the direction of the quick buck – and away from relationship-building.

As new risks emerge, and as trademark protections become more versatile, the no-brainer that is registering your mark in China is even more of a no-brainer.