According to the World Intellectual Property Organization (WIPO), China leads the world in the number of trademark applications filed.
In 2016, there were 3.7 million trademark applications files in China out of the seven million trademark applications filed worldwide. This 3.7 million is more applications than were filed in the US, the EU, Japan, and Korea — combined.
In the US (where the second highest number of trademarks applications were sought) 545,000 trademark applications were filed in 2016.
China uses a “first to file” trademark system, rather than a “first to use.” Thus, there’s a major issue with “trademark squatters” who apply for marks (especially for foreign brands) and then seek to sell them to the manufacturers of the actual products that use those marks.
Squatters don’t need to prove that they’re using the marks in commerce (as in the US), and a squatter’s registration can’t be cancelled for non-use until three years have passed since the mark was registered.
Fighting trademark squatting can be challenging. Of 57,000 trademark oppositions filed in China in 2016, only about 30% were successful.
One strategy to protect Chinese trademark rights is for foreign companies to file as early as possible.
Another strategy is to seek to protect the artistic elements of a trademark (e.g., a logo) using (paradoxically) copyright law.
There are several advantages to this:
- Unlike with trademarks, the owner of a copyright for a logo doesn’t need to designate specific goods or services on which the logo is to be used. One registration covers everything.
- It’s cheaper to get a copyright, since trademarks in China require separate applications (and fees) for each of 45 classes of goods/services with dozens of additional subclasses each.
- The copyright examination period only takes a few months, whereas getting a trademark can take a year or longer.
- Whereas trademark registrations have to be renewed every ten years, copyrights in China that are owned by legal entities (such as corporations) are valid for 50 years after the first publication.
One drawback with copyright protection of logos is that a copy must be identical or nearly identical to support an infringement claim.
Thus, for comprehensive brand protection, it’s a good idea to seek both copyright and trademark protection of marks in China.