Intellectual property rights infringement also known as trademark squatting is rampant in China. It is particularly the American brands and companies that are more vulnerable to trademark squatting in China because of two reasons:
First– US brands are hugely popular and carry enormous value to the customers and consumers. So the chances are high for the fake Chinese companies to make a massive profit using the name of a renowned US brand.
Two– It has been noted that most of the US companies don’t have the knowledge about how they can protect their trademark in China. Because unlike the US, China follows the ‘first to file’ system rather than the ‘first to use’. US companies work under the impression that by simply registering their trademark in the United States will be automatically recognized in China as well.
Your takedown request will not be granted if you only registered it in the US or other foreign jurisdiction. Even the renowned e-commerce sites such as Taobao.com will not be able to take any action against any listing that is infringing on your trademark without a Chinese trademark.
Chinese Character Trademarks
In China, the Chinese language version of your brand can be just as important as the English language version. If you don’t have a Chinese version of your trademark, you are strongly advised to create one and register it. Otherwise, the local market will create one for you and someone else might register it. It should be noted that the CTMO considers foreign equivalents of marks during the examination process. Chinese written language is comprised of characters, each of which not only has a sound, but also a meaning. There is both a “traditional” set of Chinese characters and a modern, more simplified, set of characters having fewer strokes. China is currently using the modern version.
Importance of having a Chinese character trademark–
If a foreign trademark has practical meaning in its language, the corresponding Chinese character(s) containing the same meaning may be used as its Chinese trademark. For instance, the corresponding Chinese trademark of “APPLE” is “苹果” whose Chinese pinyin is PING GUO, “SHELL” is “壳牌”(QIAO PAI), and “VOLKSWAGEN” is “大众”(DA ZHONG). The provisions introduced by the new Chinese Trade Mark Law to get China trademark certificate, highlight the urgency of choosing the right Chinese characters trademarks, getting broader registration that would also cover nicknames to pre-empt squatting, and having the Chinese characters mark reviewed and assessed by locals to ensure it does not bear any negative or degrading meaning in Chinese.
The original brand name may be a priority, but your business, products or services will also become known by a name in a local dialect. Unless you develop a strategy early on, you may find that the market has chosen a brand name for you. To be successful in China, US and European firms should develop an integrated trademark protection strategy.