10 Things Businesses Need to Know When Setting Up a Company in China and the UK: Episode 5
Our latest episode focuses on the importance of trademark registration in China in the UK.
If you are planning on doing business in China, it is important to protect your trademark. China operates on a first-to-file basis, which means that whoever registers their trademark first will have the rights to it. This can be problematic if someone beats you to the punch and registers your trademark first. To avoid this situation, it is important to register your trademark in China as soon as possible.
While it is relatively inexpensive to register a trademark in China, the consequences of not doing so can be severe. If someone else has registered your trademark, it can be very difficult (and expensive) to get them to relinquish the rights to it. We’ve heard stories of companies having to pay millions of dollars just to get their trademark back.
Keep in mind that simply having your trademark registered elsewhere in the world does not mean it is automatically protected in China. You need to register your trademark in China specifically to be protected.
By taking the time to register your trademark in China, you can avoid a lot of headaches and expenses down the road.
Steps to register your trademark in China
- Filing the application
The company must either directly file an application with the China Trade Mark Office (CTMO) or file the application through the World Intellectual Property Organization (WIPO). If choosing the latter, the trademark application must be based in the country where the mark is currently registered.
- Choosing the product and service subclasses
While China accepts the International Classification of Goods and Services under the 1957 Nice Agreement, it further divides these classes into subclasses. For example, general footwear and boots belong to different subclasses in China, so the same trademark can be registered by different companies in each subclass if these subclasses are not deemed as similar. Thus, it is crucial that the applicant’s trademark covers all the relevant products and services – in each of the subclasses – pertaining to the business’ scope when filing for registration.
- Registering the trademark in Chinese characters
Foreign firms entering China should be aware that their trademark in Roman characters will not completely protect them against infringement. The same or similar trademark can be registered in Chinese characters by another business. This is also key to a business’ profitability and image in China.
If other firms or the public informally uses your trademark in the locally-spoken language, there are chances of losing customers and diminishing your brand value due to the meaning, the pronunciation, or even the appearance of the Chinese characters. Illustrating this is the experience of luxury clothing brand Ralph Lauren in China, whose label has been referred to by the Chinese name ‘San Jiao Ma’ (三脚马) that translates as ‘three-legged horse’ – the name being created out of the designer’s logo.
On the other hand, the Chinese word for Coca Cola is ‘delicious happiness’ – not a direct transliteration, but effective in establishing the right brand reputation. Coca Cola didn’t get it right the first time though – initially, it used the name Ke Dou Ken La, which translated into something along the lines of ‘bite a wax tadpole’ (蝌蚪啃蜡). Another interesting example is the case of Toyota and Mercedes-Benz in the auto market. In Chinese, Toyota could be translated as ‘thriving’ (丰田); Mercedes-Benz, however, faced difficulty when it entered the Chinese market as its name ‘Bensi’ got translated as ‘rush to die’.
The American electronics group Best Buy is also a good reference, when learning from branding mistakes in China. While multiple factors may have led the company to wind up its operations in the country after five years, its name certainly did not help its cause. Best Buy’s trademark name in China used the characters ‘百思’, which combined the sound of the word ‘best’ and the direct translation of the word ‘buy’ (买) – all of which unfortunately got translated as ‘think a hundred times before you buy’.
The importance of trademark registration in the UK
Trademark registration in the United Kingdom is simple and can easily be done online. However, it is important to check that the name you want to use for your company is not already taken in your sector of business. There is a fee for registering a trademark. The process generally takes 4 weeks to get feedback on your application but can take up to 4-6 months for the trademark to be registered. A certificate will be issued once it has been registered. Trademarks are valid for 10 years.
Registering your trademark is important because it gives you legal protection for your brand. This means that you can take action against anyone who uses your trademark without permission. It also makes it easier to sell or license your business as a whole. If you do not register your trademark, you may still have some protection under the common law, but it is more difficult to prove infringement. Trademarks can be renewed indefinitely as long as they are being used.
There are many benefits to registering your trademark, but it is important to remember that it is not a requirement in the UK. You may choose to rely on common law protection instead. However, if you do decide to register your trademark, it is recommended that you use a professional services firm to help you with the process. This will ensure that your trademark is registered properly and gives you the best possible chance of success.
Episode 5: The Importance of Trademark Registration in China and the UK
Key insights are provided by, Maria Kotova, Head of UK Business Development and China market entry director at Dezan Shira & Associates, and Lisa Gui, Assistant Manager at HW Fisher.
If you have any questions about doing business in China or the UK, reach us at UK.Ireland@dezshira.com
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China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at firstname.lastname@example.org.
Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.
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