China is one of Australia’s most important trading partners, and with ongoing US tariffs, these commercial ties are only likely to become stronger and more nuanced. Whether you’re manufacturing in China, or entering the market with products and services, a robust trade mark strategy is essential to protect your brand and safeguard your business. Here are our IP team’s top considerations.

China is a big, competitive registry

One consequence of China’s commercial growth over the past twenty-five years has been a dramatic increase in the number of trade mark filings and registrations recorded with the China National Intellectual Property Administration (CNIPA).

To give an idea of the scale of the trade mark system in China, it was home to over 46 million registered trade marks at the end of 2023. By contrast, the US closed out 2023 with just under 3.2 million registrations, and Australia trailed a decent way behind at close to 850,000.

This means businesses seeking to protect their brand in China are more likely to face obstacles at the examination stage and are more likely to encounter subsequent challenges to their registrations (from later applicants trying to clear a path for registration of their own trade marks).

It is not uncommon for businesses to refile their trade mark in China every two to three years. This practice helps provide fallback applications and registrations as older marks become vulnerable to cancellation. The result is that that new entrants to the market must contend with an extremely crowded field of existing trade mark rights.

It is wise to speak with a trade mark attorney to develop a clear and efficient filing strategy for sidestepping these challenges.

Securing a trade mark in China

If you wish to file a trade mark application in China, you’ll need to decide with your attorney whether you file directly with the CNIPA, or whether you designate China as part of an international application under an agreement known as the Madrid Protocol.

When you’re seeking registration in multiple jurisdictions, the Madrid Protocol is generally more cost effective than direct filing. You can calculate fees for filing a Madrid Protocol application using the Source calculator. It is also easier to maintain your various trade marks through a Madrid Protocol registration, as you can attend to renewal in a single transaction.

However, it’s worth noting that the Madrid Protocol does have some drawbacks when it comes to filing in China:

Slower progression through examination

On average, Madrid Protocol applications are slower to progress through examination compared to direct filings. Where time is critical, this may influence your filing strategy.

Differences in registration documentation

For trade mark applications filed through the Madrid Protocol, you will be issued with a “Statement of Grant of Protection”, rather than a registration certificate. In many jurisdictions, the statement of grant will be considered equivalent to a registration certificate for the purpose of commencing infringement proceedings. In China, however, you will need to jump through additional hoops to obtain a certificate if you wish to enforce the registration against another party.

Translation challenges in filing 

Madrid Protocol applications are translated from English to Mandarin without consultation. If you offer a specialised service or product, it may be preferable to work with local attorneys to develop an accurate translation of your claimed goods/services to ensure your registration is really giving you the protection you need.

The ‘first-to-file’ principle 

Unlike Australia, where the first user of the trade mark is the owner, in China the first to file an application usually secures the rights to the trade mark – even if someone else has been using it in the marketplace. Once the brand is “live” it is not uncommon to find an identical or suspiciously similar trade mark application filed in bad faith – we explored this in our recent insight Navigating the Trade Mark Squatting Minefield in China. It is therefore important to move quickly in securing your rights in China, well ahead of a formal launch.

Navigating China’s sub-class system

In your trade mark application, you will need to indicate the goods and/or services you trade in, or intend to trade in. In most jurisdictions, goods and services are categorised into 45 classes. These are known as “Nice Classes” (a reference to the city in France, not how pleasant they are!). For example, Class 3 covers cosmetics and toiletries, whereas Class 25 covers various items of clothing, footwear and headgear.

Because of the scale of its trade mark system, and the massive task of examining millions of trade mark applications each year, China divides each of the 45 Nice Classes into sub-classes. For example, Class 25 is broken down to differentiate between adult clothing, baby clothing, waterproof clothing, costumes, etc. If two trade marks are confusingly similar and they each claim goods/services in the same sub-class, the later trade mark will be refused.

This is quite different to Australia, where examination is much more subjective and the examiner of the application (and the registrar or judge in contentious proceedings) will closely look at whether the goods/services are in fact similar. While class categorisation can assist in this task, it is not determinative.

This means that when filing in China, you need to ensure that you cover all sub-classes of relevance to your business. You otherwise risk later competitors registering (and using) a similar trade mark because there is no technical conflict between your respective goods/services.

Do I need a trade mark registration in China for the purpose of export only?

The short answer to this is yes, while the long answer is much more complicated. Historically, the position has been that businesses manufacturing their products in China for export and sale in another country are not using their trade mark in China, and so cannot be infringing on any Chinese intellectual property. However, recent case law has thrown doubt on this principle. Now, where there is a theoretical possibility that the goods could be circulated in China (by way of later online sales), there may be a case for trade mark infringement.

If your trade mark is applied to your goods in China, you should ensure you are not infringing on any registered trade mark at the very least. Best practice is to secure your own trade mark registration.

Expand your strategy to include copyright 

Trade marks are a powerful tool. However, unlike Australia, China also has a system for registration of copyright with the National Copyright Administration (NCA). Copyright registration is available for artistic works, including logos and stylised trade marks, if you can prove you are the author/creator of the work. This can be particularly useful where you are involved in contentious trade mark proceedings and your trade mark registration does not cover the specific goods/services in issue.

Notify the customs office

Once your trade mark is registered in China, you can request the trade mark is monitored by Chinese customs. This gives the customs office the ability to search outgoing shipments for potentially infringing goods, and confiscate these products before they hit the market. This can also be a useful tool on Australian soil where you have a corresponding domestic registration.

Get in touch with Source IP to discuss your plans 

Source IP are experts in the intricacies and nuances of the international trade mark system. We work with a network of attorneys around the world to ensure we offer relevant and commercial advice tailored to each jurisdiction. If you are looking to launch your brand in China, or your products are manufactured there, talk to our Source IP experts today for advice on the best filing strategy for your business.