Protect Your Trademark Better— Register the Copyright!

I assume we don’t have to emphasize how important it is to register  and protect your trademark.  Although we recommend our client to register their trademark as extensively as possible but not all companies would choose to register it in all categories, considering the high cost associated with register and maintain the trademark. Otherwise, the trademark could be applied for “Non-use cancellation” if it’s not been maintained properly.

Fortunately, we have another option. We can apply for registration for copyright of graphic trademark (logo).

And yes, you are right.  Graphic trademark is also an artistic work, which is covered by the copyright law.  And registration for copyright also constitutes protection for trademark, of course, in a different way.

The main difference is as follow:

1. Differences in timeframe and procedure:

Registration of trademark takes at least one and half year.  However, if there is any objection or rejection involved, it may take 2 or 3 years to finally get it.

However, registration of copyright is simpler and the success rate is pretty high,it could be finished in 1-2 months.  It helps to protect your logo while you are waiting for certificate of trademark being granted.

2. Extent and scope of Trademark protection:

Under the trademark law, every trademark should be registered under certain category. However, this protection is only limited to the very registered category.  Furthermore, the use of any similar mark under this specific category or any mark that leads to confusion about the provider of goods or services is also forbidden.

However, the scope of copyright protection is more extensive, it covers all goods and services without any limitation.  Once registration is completed, the graphic cannot be used in any commercial occasion without authorization and are not restricted by the specific categories of trademark. In another word, the protection of trademark is more powerful but limited, while copyright is more extensive but “superficial”.

3. Prior right to Trademark

Trademark Law of PRC dictates, trademarks that conflict with the prior rights (including copyrights) of others can be revoked and deemed invalid. It means if you own the copyright of certain logo, you can use this provision to object and to ask for revocation of anyone else’s application if he registered this logo before you did or tried to register your graphic trademark under other category that you didn’t register previously.

4. Term and cost of Trademark registration

The term for registered trademark is ten years and you should pay to renew it within 6 months before it expire. On the other hand, the term of a copyright is at least 50years without any requirement for renewing. Hence, the cost is comparatively low.

In one word, registration of copyright is fast, cheap and the protection is more extensive and longer. Register copyright of your graphic trademark is a cost-effective way to better protect your trademark.

You are welcome to contact us here for further details on protecting your trademarks in China.

IPR Infringement in China – Five Ways to Stop It

While there are still challenges regarding intellectual property protection system in China, with the recent law reforms it has markedly improved making it easier to stop IPR infringement in China, particularly in first tier cities and surrounding areas.

Now there are a number of ways you can take for IPR protection. In this article we are going to explain the five most popular methods the IPR owners can use to protect their interest. Let’s use trade mark as an example.

1 . Administrative route:

1) Customs Protection

This way is proved to be a cost-effective way to stop IPR infringement is to stop infringing goods leaving China.

All you have to do is to file the Customs protection of IPRs with the General Administration of Customs (GAC), GAC is a centralised authority which can apply their control at the border to merchandise coming in or going out. Once you register your trademark with GAC, GAC will take the initiative to detain suspicious goods, meaning any goods not exported by you or your authorized factory could not leave China.

Advantage:

1. The biggest benefit of Customs IPR protection is that the IPR owner don’t have to provide any information of the infringer.  Because more than often, they just have no clue where or who the infringer is.

2. It only takes 3 months to finish the procedure.

Disadvantage:

Customs protection of IPRs can only stop counterfeit exported from China, but can do nothing to stop the infringer selling it in China.

Reminder:

The term of Customs protection of IPRs is 10 years. You have to file for renew it within 6 months before expiration of the current term.

However, if the valid term of your trademark is less than 10 years, the valid term of filing shall be the valid term of the IPR.  So it’s very very important to renew your trademark in time too!

 2) AIC raid

If you find anyone is manufacturing, selling or storing infringing goods, you could lodge a complaint with local Administration for Industry and Commerce (AIC) where the infringement is committed, by sending evidence of the infringement (such as samples of the infringing product, photo or video of the shop or factory).

If the AIC decides there is a solid case then they will launch a raid with the goal to investigate and seize infringing goods.  After the conclusion of the raid, AIC will order the infringer to cease infringement, confiscate and destroy all goods and tools specifically used in the production of the infringing articles.

AIC may also impose a fine, where the amount is relative to the size of infringement and will not be more than five times the amount of the illegal business. In cases where no fine can be calculated, a fixed amount will be imposed by the AIC of up to RMB 250,000.

Advantage:

1. Usually it’s fast, compared to judicial route.

2. Any documents AIC produces during this procedure could be used as evidence in judicial route.

Disadvantage:

1. Sometimes, such raid can only stop the infringement temporary and locally.

2. The owner can’t get any compensation from the fine imposed by the AIC. Granting of compensation is exclusively the domain of the Chinese People’s Courts.

2. Judicial Route

1) Civil procedure

IPR owners may file a lawsuit against the infringer once they have enough evidence. Though it is possible that the court may order an inspection, in reality for any IPR infringement in china the evidence has to be collected by yourself (we will discuss about requirement for evidence in separate blogs).

The whole procedure may take more than six months or even couple years, however the specific length depends largely on the complexity of the case.

If finally an award in favor of the owner is made, the following remedies are available:

* An injunction to cease the infringements

* Confiscation of all infringing goods, as well as the machinery and equipment used to produce these

* Damages paid by the infringer

 Usually, damages are determined based on:

* Owner’s losses because of the infringement.

• Illegal profits gained through the IPR infringement in China.

• Time of the royalties of the registered trade mark when both the losses and the infringer illegal profits are hard to determine.

 • Where calculation of the above three points is hard, the court can, based on the circumstances of the infringement, impose damages of up to RMB 3,000,000.

2) Criminal procedure

Producing or knowingly selling counterfeit products, producing forged or unauthorised representations of trade marks constitutes crimes of IPR infringement in China according to Criminal law of PRC.

The trademark owner can report a crime to the public security, which have the power to detain suspects and interrogate them and also search and inspect premises without restraint.  If the public security decide that there is a crime, they will forward all file to the People’s Procurator in order to bring a criminal case before the court.

The penalties for a trademark crime could be fine plus fixed term imprisonment of not less than 3 years where conditions are “ serious” or the sales are “large”; or not more than seven years where the conditions are deemed “extremely serious” or the sales are huge.

Advantage:

Criminal penalty is the severest punish to infringer, and could effectively stop the infringement.

Disadvantage:

1. There is a threshold for procurator to bring a criminal case before the court. 

2. The trademark owner will not get compensation from the fine paid the infringer.  He can only get compensation by filing civil suit collateral to criminal proceedings.

3. IPR Infringement on E-commerce platforms

E-commerce in China has boomed greatly recent years. With it, some big platforms have set up a system to stop IPR infringement in China too, such as Alibaba, JD, etc. IP owner can file complain with the platform, if they found any IPR infringement on their platforms.

Once the IP owner’s identity and intellectual property rights documents have been verified, infringing product will be taken down from product listings.

Advantage:

It’s very fast and convenient to proceed.

Disadvantage:

Infringement could only be stopped in the platform, but can’t be eliminated effectively.

Tip:

1. These enforcement routes can also be combined to achieve a successful outcome.

2. Except in customs route, all the above mentioned route needs necessary evidence.  Especially in civil procedure, evidence is very crucial for win a case with a satisfied outcome.  Hence, be careful not to alert the infringer before you have enough evidence.  However, a lawyer letter can only be sent out to seek for a possible settlement after all necessary evidence is collected.

3. Except for in E-commerce platform, IPR registered in China is the prerequisite for all protection.  So once more our reminder, register your IP in China ASAP.

Also you can get more information on our article https://chinalawhelp.com/how-to-get-my-brand-back-in-china/


How to Get Back My Trademark in China?

More than once, when our clients finally decided to register their trademark in China, they found it’s been registered by someone else already!

Can I claim it back by showing that we have owned and used the trademark for hundred years in our home country? They asked.

Unfortunately, the answer is no, they can’t.

China apply the “first-to-file” system in trademark application. It means the first applicant of a trademark will get it, despite the fact that someone else has used it for many years.

Is there any way to get it back?

It depends. If the current owner doesn’t use it at all, you probably have two options to get the brand.

1. Buying back the Trademark in China 

You may try to buy it back, because someone register other people’s trademark to sell it someday to make money.  That’s called “malicious squatting”. The price could vary from five digital till seven digital.

The good news is that the China Trademark Office (CTMO) in Beijing has adopted  stronger action to curb squatting in trademark registration, such as Non-use cancellation .  So, you have another option:

2. Filing for Non-use cancellation

You may choose to file for Non-use cancellation based on the fact that the current owner didn’t use it for three consecutive years.  CTMO will ask the current owner to provide evidence to prove that they are using the trademark. Otherwise, CTMO will cancel the brand in nine months.

However, usually it’s hard to tell if the current owner has used the trademark actually before we file for Non-use cancellation. 

We will check the following aspects to help us to decide:

  1. If the current owner is individual, the chance for him/her to use it properly is less;
  2. If certain qualification or permission is needed to sell the commodity the trademark is applied to, or such business is not included in the businesses listed in the business license of current owner (if the owner is an entity);

The above matters will help us to decide if we can make it.

But cancelling the brand can’t guarantee you definitely could get the trademark. You have to be the first applicant to get it.

Timing is very important at this point.

Usually, our routine is:

  1. Apply for the trademark, and at the same time, file for Non-use cancellation.
  2. The application would be rejected because it has been registered already.  Let’s continue. Apply for review of the application with the Trademark and Adjudication Board (TRAB).
  3. If the TMO hasn’t cancelled the trademark, apply for suspension of the review until the decision of Non-use cancelling is made.

In this way, we can make sure our client is the first applicant once the Non-use cancellation is done.

However, the Non-use cancellation procedure could last more than three or four years or even longer, if the current owner decides go through whole proceedings.  Not to mention the fee involved.

You can see, buy it back or file for Non-use cancellation both are time consuming and expensive.

So our repeated suggestion is: if you want to register your trademark in China, do it now!For more info, you may check our post: Trademark Registration in China – Procedure or Two Ways of Trademark Registration in China

Useful link:

TRADEMARK OFFICE OF NATIONAL INTELLECTUAL PROPERTY ADMINISTRATION, PRC

Tips on Preparing OEM Contract with China Factory

Signing an OEM contract is one of the ways to protect yourself when you source in China.

But how to do it properly is a big question, after all, the language, legal system and culture, etc.is totally different.

The suggestion I want to offer is:

1. Find an English-speaking Chinese lawyer to help you.

Benefit: they know what happens in practice and they are aware of the newest change in court if finally a lawsuit is inevitable. They will give more practical suggestions that any overseas lawyer can’t offer.

In one word, their job ensure the contract’s enforceability.

2. Selecting China as the jurisdiction to make sure the award being executed.

Why?Because China court barely enforce award formed in other jurisdiction.

Choose to file lawsuit in China court and file for a rule to freeze defendant’s assets will make sure the award in favor of you could be executed. For more information, you may check: Foreign Judgment-Enforceable in China?

3. Choose Chinese as the main language.

Only Chinese is the official language allowed to be used in China court, any paper in other language need to be translated into Chinese firstly.

So it’s better to prepare a bilingual contract and say: if there is any contradiction between this two version, the Chinese version will prevail.

In this way, you could make sure it’s the version your lawyer prepared to be used in the court, not a translation copy provided by any translator assigned by the court.

4. Choose China law as the applicable law.

Though the parties are allowed to choose the applicable law, but there are actually no detailed rules about how to use other’s country’s law in China court. In another word, it’s hard to do.

5. Specify liabilities for breach of contracts clearly and reasonably.

It’s very important to make sure the China factory understand the consequence if they breach the contract is very important.

Consult with your lawyer to set a suitable liability. If it’s too light, it’s not enough to warn the factory; if it’s too heavy, the other party will claim it to be invalid and the judge would support that.

But the court will stick to it, if the liabilities is reasonable.

Anything else?

Useful link:

MINISTRY OF COMMERCE OF THE PEOPLE’S REPUBLIC OF CHINA