Why should you protect your trademark in China?
The CTMO operates on a “first in, first served” basis. This principle allows any third-party, Chinese or foreigners, to register in China any trademarks, including the trademarks that you have created.
Although you first create and use a trademark in China, you will not be entitled to get it back if a third-party has registered it. What really matters to the CTMO is the date of registration of the trademark.
What risks do you face by not registering your trademark in China?
Following the acceptation of the third-party’s registration, the rightful owner of “your” trademark is entitled to the exclusive right on that trademark and will prevent you from using it in China.
In practice, the risks are as follows:
– Impossibility to sell and distribute in China
As you are the one violating China’s Trademark Law, the owner of “your” trademark may try to seize the products you want to sell in China.
To make sure you are the rightful owner of your trademark, a distributor may ask you to present the Chinese Trademark Certificates of the products you want to sell in China. Without this Trademark Certificate, you take the risk that the distributor refuses to sell your products or that it applies for your trademark registration in its name.
– Difficulties to manufacture in China
When your product is manufactured by a Chinese subcontractor in OEM, it may decide to register your trademark in China. At the end of the subcontracting relationships, any former subcontractor who has registered the trademark may try to prevent you from exporting the products manufactured by a new supplier.
As of to date, the rule of the law does not guarantee that the production to be exported can be released by the Chinese Customs authorities.
– Difficulties to open a shop:
The malls and shopping centers offering premium locations in China are reluctant to rent premises to tenant without proper right on the trademark of the shop. Providing the evidence of your rights on your Chinese trademark is frequently requested as a precondition for the opening of the shop.
– Distribution on the Internet
The biggest e-retailers such as Tmall, Jindong, mei.com or VIP shop will not work with anyone who cannot provide the evidence of its rights to use the distributed brands. However these platform of e-commerce cannot be missed if you want to develop business in China.