China is one of the most challenging markets when it comes to trademark protection. Many entrepreneurs, when attempting to enter the Chinese market, underestimate the importance of trademark registration, which often leads to complex legal issues. However, recovering trademark rights, while time-consuming, is sometimes possible. The example of one of our clients demonstrates that even in complicated cases, there is a way to resolve the problem.
A food industry producer—a small family-owned business with a well-recognized brand—decided to expand its operations by exporting to China. Representatives of the company regularly attended trade fairs beyond the Great Wall. However, they did not apply for trademark protection in China.
After some time, the producer enter in cooperation with Chinese importer, signed a distribution agreement, and the first shipments were sent to China. Everything seemed to be going in the right direction.
Unfortunately, it soon became apparent that new orders had stopped coming in. The producer decided to initiate business talks with other companies they had met at trade fairs in China. During negotiations with one potential importer, they learned that they did not own the rights to their trademark in China. A thorough investigation revealed that the first importer had registered the trademark in their own name—of course, without the knowledge or consent of the producer.
From a legal standpoint, the situation was clear—the trademark belonged to the first importer. In China, trademark law operates on the principle of “first to file” which, simply put, means that trademark rights are granted to the person who registers the mark first. In this case, the first to register the trademark was the Chinese importer.
If the producer had chosen to sell their products through a new importer using the registered brand—despite the fact that it was registered in bad faith by the first importer—it would have resulted in a violation of trademark rights. To rectify this situation, the producer tasked us with recovering their brand.
The process of recovering the rights to the trademark was lengthy and complex. It required providing evidence of bad faith actions by the first importer and proving that the trademark had been registered under such circumstances. A critical part of the process involved gathering documentation that the China National Intellectual Property Administration (CNIPA) would recognize as proof of the first importer’s bad faith actions. This formed the basis for issuing a decision to invalidate the importer’s trademark registration. This step constituted the initial phase of the project.
Ultimately, we succeeded in having the improper registration by the importer invalidated and securing a new trademark registration in the producer’s name. The project, which lasted over three years, concluded with the issuance of a local trademark registration certificate.
Unfortunately, throughout the duration of the project, the producer had to halt their business operations in China to avoid exposing both themselves and their importers to the risks associated with trademark infringement.
This story highlights the importance of properly securing your interests in the Middle Kingdom market, particularly by registering your trademark in China in advance. Such issues can often be avoided with thorough preparation and consultations with experts in intellectual property law.
However, if you find yourself in a situation where recovering a trademark becomes necessary, it’s crucial to remember that, while it is possible, the process is always risky, time-consuming, and significantly more expensive than proactive registration.
