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Trademark Traffic Jams in China: Dealing with Rejections Due to Prior Marks
date: 2019-04-19 Brandy E Baker Read by:

Talk to anyone who has been to Beijing and they will complain about the traffic. The rise of the middle class has led to a lot more cars on the road and one giant traffic jam in China’s capital and many cities around the country. But it’s not just cars that are on the rise within China, its everything.

With its large population and growing middle class, China offers a huge market that many hope to engage. Goods and services available in China have multiplied exponentially in recent years. On top of it, China continues to be the manufacturing capital of the world so those brands not selling in the market may be active in China’s factories and ports. Given this landscape, there are many Chinese and international brand owners looking to protect their trademarks in the country and we’ve seen the number of trademarks registered in China skyrocket.

A quick glimpse at China’s trademark stats are startling. In 2017, the China Trademark Office received more than 5 million trademark applications and had almost 15 million registered marks in the system. Unsurprisingly, it’s the busiest trademark office in the world and this has created a trademark “traffic jam” presenting a problem for brand owners looking to file new marks in China.

This traffic jam means that there so many existing trademarks already in the system that brand owners often find themselves blocked from registering in the classes/subclasses they need due to confusingly similar marks. Beyond the fact that a large number of brands operate within the country, a deeper dive will also tell you that that trademark congestion is further complicated by the ease of filing in China. There is no prior use requirement. This means that many applicants file marks that end up not being used and makes it easy for trademark squatters to take advantage of the system (yes, bad faith filings continue to be a problem in the country, but more on that in future posts). Furthermore, examination can often be inconsistent, with examiners taking into account meaning, pronunciation, aesthetics at varying levels creating additional barriers to entry.

So what does that mean to you? And what can you do to avoid these problems?

(1) Get in now. The earlier, the better in this first-to-file jurisdiction. The traffic will not be resolved immediately, so getting in now will likely mean less parties ahead of you in line.

(2) Do a trademark search. By seeing what marks may be ahead of you and present a problem, you can create a solid strategy on how to get to the finish line. Hint: you can a quick search on your own for free though our platform (eservice.kangxin.com) now to get an idea of what’s out there.

(3) Non-use cancellations is a low cost and fairly easy way to get rid of barriers. As I mentioned above, the ease of filing often means parties are filing but haven’t actually used their registered marks. Evidence of use may be required after 3 years of registration, so consider filing this action to clear the way.

(4) Invalidations are another way to clear out marks. However, invalidating a registered mark requires being able to argue prior rights and/or bad faith. If this is an option, it’s a way to rid barriers even earlier than non-use cancellation (but generally must be filed within 5 years of registration).

(5) Adding to or adjusting your trademark. Sometimes adding additional distinctiveness to your mark may be the answer to overcoming barriers. Consider adding a design, or even your Chinese language branding (most brand owners should be considering registering Chinese language marks already).

(6) Doing some marketing research may lead you to a new trademark specifically for the Chinese market. Creating a new brand for China is not a bad idea, and for those trying to register marks because they wish to sell goods/services within the country may be able to find a mark that has fewer barriers.

(7) Appealing rejections. With the number of applications being reviewed by the CTMO, sometimes you may find your arguments for dissimilarity to earlier marks are better heard before the TRAB or the Courts who will handle the first and second appeals respectively.

Eventually, we may see the Chinese trademark office begin to take finding ways to deal with the trademark traffic jam on its end such as stricter use requirements and further strengthening regulations against bad faith filers. Though the trademark law was updated in 2014 talks of the next update are already underway. Until then, thinking ahead using the above strategies will help you navigate the increasing trademark congestion in China.

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