Companies around the world understand the value of observing competitors. We are used to companies gathering information about each other in their home markets. But ambitious companies playing for position on a global scale are also watching each other in the global business arena.
One area that says the most about a company’s growth plans is, of course, trademarks and patents. This is one reason why it is worth looking at the competition through the prism of trademarks, especially in China. There are two others, no less important.
Companies doing business in China often use Chinese versions of brands. The values, emotions and message of the brand encoded in the Chinese name are a treasure trove of knowledge about the chosen brand strategy or market segment. Knowing this information gives competitors knowledge of the elements of a key competitor’s strategy. That is the first reason.
The second is preventative self-defence. Unfortunately, competition is not always fair, although we would probably like it to be. Unfortunately, it still happens that a company applies for protection of its competitor’s trademark, which has not yet been used in China, in order, for example, to prevent or delay its entry into the market. This is obviously an act of bad faith; sooner or later, the trademark is likely to end up in the hands of the rightful owner. But there is no making up for lost time.
By analysing the competitor’s trade marks, you can see which trade marks they have applied for and in which classes. You can also see what products and services they have applied to register. This gives you the basis to draw many important conclusions for your business.
The main reason may be to delay and obstruct your business. We know it’s not fair, but unfortunately it does happen, which is why we follow the #File1st® principle of filing trademarks in advance.
If your competitor has registered your trademarks, you have a chance to recover. Unfortunately, the whole process can take from a year to several years.
Compensation from a competitor can only be paid as a result of litigation arising from your action. The Chinese Trademark Office (CNIPA) does not impose any penalties for filing trademarks, even if they are filed in bad faith. However, a party who files trademarks in such a manner may face difficulties in registering trademarks in the future.
Firstly, you will find out whether your trademark has been filed in China. Secondly, you will know which trademarks your competitor has filed in which classes and for which products/services. This will give you a strong indication of their market moves. In addition, by analysing the Chinese equivalents of their trademarks, you can find out which customer segment they want to serve and what key brand messages they want to convey to their customers.