What is considered “illegal use” of your own trademark under the new rule in China?
Tags: Doing Business in China, E-Commerce, IPRs, SMBs and SMEs, Trademark
This article is co-authored by Tianpeng Wang, CEO of Trustiics.com and Hong Zheng, IP lawyer in China.
Businesses can sell products under brand names to the Chinese market, through traditional exporting or an online platform (see our previous article on Shopify-JD arrangement). Sellers usually register trademarks in their home country; ideally, they register them in the destination market such as China as well.
The new regulation
On January 1, 2022, a significant regulation, “Judgment Standards for Determining Illegal Use of Trademarks” came into effect, promulgated by the China National Intellectual Property Administration (CNIPA). This regulation directly impacts how businesses use their own trademarks when selling to the Chinese market. It applies even when they have made the trademark application in China.
Highlights for 2022 trademark protection in China
This new rule declares a number of trademark uses to be illegal or in violation of existing trademark laws in China.
“REGISTERED TRADEMARK,” “REGISTERED,” and the symbol ®
If you have not registered your trademark in China, you cannot use the words “registered trademark” or “registered,” or the ® symbol on products or packages shipped to China. Even if you have submitted the trademark application with CNIPA, you still cannot use such words or the symbol before the registration is complete.
Furthermore, using a registered trademark beyond the registered scope of goods or services approved for it is also deemed a violation under this scenario.
This rule will result in material impacts on all international businesses selling to the Chinese markets without their trademark being registered in China. Therefore it is best to consult a trademark expert lawyer in China to analyze the situation for your brand. You may be able to include a specific declaration on the package, or you may have to completely remove the word “registered” and the ® symbol from products and packages. The specific requirements often differ from case to case.
Update your filing
If you have registered your trademark in China, you are required to keep information filing updated with the CNIPA. For example, if you have made any changes to the company name or registered address, you will need to engage a qualified Chinese trademark lawyer to update the filing.
If you have licensed your trademark to a business partner in China, such as an OEM, a distributor, or a JV partner, you will be held responsible for their illegal use of the licensed trademark.
The rule stipulates that if the trademark legal owner “knows or should have known” that the licensee has changed the registered trademark, such as the registrant’s name, address, or other registration matters, then the trademark legal owner should take action to stop the wrongdoing of the licensee. This “should have known” could be an onerous burden on an international trademark licensor. Therefore at minimum, an international business should consider including a clause in the licensee agreement to prevent the licensee from making changes to the registered trademark without your permission.
The “CHINA WELL-KNOWN TRADEMARK”
Lastly, international businesses should be cautious and avoid using such words as “well-known trademark” on their products, packages, or advertisements in China. This applies even if your trademark is officially recognized and certified as a “well-known trademark.”
If you have further questions regarding trademark protection, compliance with trademark rules in China, or a trademark license agreement with a Chinese company, please contact us by filling out the form below, or email us at firstname.lastname@example.org.
About the authors
Before starting Trustiics, Tianpeng practiced with major international law firms’ China offices for over 15 years. He has advised more than 100 international companies’ investment and business activities in China and other Asian markets.
Mr. Hong Zheng
Partner at Tee & Howe Intellectual Property Attorneys, Beijing, China
TRUSTIICS Recommended Lawyer
Mr. Zheng specializes in intellectual property law with 20 years of experience. He has been named one of the “Top-10 Trademark Attorneys” in China and has extensive experience in advising international businesses to protect their IPRs in China.
Read more from Mr. Zheng