Trademark applications in China
The iPad is one of the most cutting-edge tablet computers on the market, and the trademark is uniquely associated with Apple computers.
The significance of the ‘iPad’ trademark dispute is that the settlement sum is an indication of the potential value of the trademark in the market, though the case itself concerns the risks of trademark assignment there. In some ways, it could be said that the ‘iPad’ trademark was Apple’s most valuable asset in China. Therefore, $60 million looks like a reasonable price for Apple to offer to secure rights to the ‘iPad’ trademark, given the growing consumer market in China.
"ALTHOUGH HONG KONG AND MACAU ARE SPECIAL ADMINISTRATIVE REGIONS OF CHINA, REGISTRATION OF A MARK IN CHINA DOES NOT EXTEND PROTECTION TO THESE TWO REGIONS."
Chinese trademark law permits any person who files a trademark application first to register the mark once it meets the requirements of the Chinese Trademark Office. Prior use of a mark abroad and/or foreign registration carry little or no weight when opposing such an application.
There are numerous examples of trademark owners who enjoy the prior rights and reputation of their marks in their country of origin, but who cannot prevent others from using and registering the same mark or a confusingly similar mark in China, simply because that third party obtained a prior registration or filed an earlier trademark application there.
On occasion, true IP rights owners may have to select to pay the settlement money in order to avoid any threatened infringement actions or exclusion of products from importation by the registered owner in China. The legal costs, as well as unpredictable and inconsistent court decisions in China are definitely drawbacks, not to mention the time required for proceedings to move from the administrative to the judicial level.
In light of this, the key preventive measure to avoid trademark squatting in China is to file your own trademark application(s) as fast as possible.
Applications can be filed in China either by filing directly with the China Trademark Office or by extending an existing application or registration to China under the Madrid Protocol.
A comprehensive trademark search should be conducted prior to filing of the trademark application. This will enable you to have sufficient time to prepare and take all remedial actions if a potentially conflicting mark, ie, an identical or similar one, is located.
Extension of trademark protection should be reviewed in China from time to time because protection of a registered mark is always confined to specified goods and services of interest. Trademark applications in related classes should also be made in order to broaden the protection.
Chinese consumers generally refer to foreign brands (usually in Latin words) by reference to their Chinese transliterations or equivalents. In some cases, local distributors may use and register a Chinese version of a foreign brand without the knowledge and consent of the true trademark owner. Ownership of this Chinese version is always the subject of administrative or court proceedings once its reputation has been built up.
Last but not least, it is worth noting that although Hong Kong and Macau are both special administrative regions of China, registration of a mark in China does not extend protection to these two regions. It is therefore highly advisable to file trademark applications in these two regions as well.
Hong Kong is an international city with more than seven million citizens, while Macau now has a gambling turnover five times higher than that of Las Vegas. Many people from mainland China take a day trip to Hong Kong and Macau for shopping and/or business.
Flagship stores of many luxury brands have been established in the most expensive districts there to attract these Chinese consumers. International exhibitions and conferences are held there annually, and many traders and exhibitors across the world will attend. Trademark protection in China, Hong Kong and Macau should, therefore, always be considered jointly.
