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Bad-faith Trademark Registration in China

appleFor international companies that wish to bring their products to the Chinese market or manufacture their products in China, appropriate protection of trademarks is very important to avoid the risk of trademarks being misused or infringed by someone else. However, European businesses using trademarks written in Latin characters, do not immediately have sufficient protection for their trademarks written in Chinese, even if the pronunciation in Chinese is the same. For example, APPLE in the Chinese market is better known as “Ping Guo (苹果)” for Chinese consumers. Marc O’Polo for clothing and shoes has been also called as “Ma Ke Bo Luo (马可波罗)” or “Bao Luo (保罗)”, which are more known in China. The other three famous car brands−Paladin, Fiat and Cherokee−have been registered as “Pa La Ding (帕拉丁)”, “Fei Ya Te (菲亚特)” and “( Qie Nuo Ji切诺基)”on lubricating oil and antifouling products in Beijing.

Given the fact that the Chinese language is completely different from the Latin language system, some European businesses might find that their trademarks or similar trademarks have already been granted to a Chinese company. It might cost the European company a substantial amount of money and effort to purchase the Chinese trademarks. In practice, so called “bad-faith registration” is greatly motivated by the profits yielded from the difference between the inflated price charged by the trademark holder and the cost of registering this trademark.

A possible way of defending against the above-mentioned behaviour is to bring up an argument on the basis of “bad-faith” in front of the trademark review and adjudication board (商标评审委员会) seeking the invalidation on the ground of “bad faith” within 5 years after the registration (see article 45 of the Chinese trademark law). However, this might still be very difficult because on the one hand the already existed trademarks normally enjoy more priorities than the non-registered marks (except for well-known trade marks) and on the other hand proving the existence of “bad faith” is relevantly difficult.

It is therefore advised to register your trademark in China (both in Latin as in Chinese writing) before it becomes victim  to bad-faith-registration.