What is a Trademark?
A trademark is different from a company name or trading name, although you may also register your company name or trading name as a trademark. Trademarks are an important business asset being the signs that help your customers identify your products and services, and to distinguish them from a competitor’s products and services. The trademarks of many companies represent a large part of the value of the company and can be a considerable contribution to the 'goodwill' of a company. Especially for service or digital companies where traditional asset classes are typically low. Think of renowned brands like Amazon, Google, Facebook, etc.
A trademark is a sign, logo, words, indications, designs, figurative elements, etc that distinguishes the goods and services of one trader or business from another. It must be capable of being represented graphically for it to be registrable as a trademark.
Registering your trademarks enables a a business to:
Registering your brand as a trademark means to own the exclusive right to use this trademark in relation to the goods and services for which the mark is registered. Thus, a trademark provides protection of your brand. Infringements of the restricted use by others without consent of the mark owner can be legally pursued.
Registered trademarks are assets, while unregistered trade marks are not. Unregistered marks are only protected by the common law action of passing off. In an infringement case, goodwill or reputation in the unregistered mark and damage from the misrepresentation must be proven. Thus, passing off is usually a more difficult action to bring than an action for infringement of a registered trade mark which provides statutory protection.
When establishing a brand in China, a registered trademark becomes a necessity in order to market the brand and secure distribution and retail contracts.
China adopted the first-to-file system which means that whoever is first to register the mark gets trademark protection. Similarly underestimated is the processing time of 12 to 18 months for the registration. A trademark in China may be registered either through the domestic registration system, or via the international extension of an overseas registered mark under the Madrid Protocol. It should be noted however, that a mark registered in China under the Madrid Protocol does automatically protect the trademark against the registration or use of the same or similar trademark. An international trademark can be applied for in English, French or Spanish, however, in order to enjoy enforceable protection in China, a trademark must be registered in Chinese characters.
Bad-faith registrations and secondary market trade have become an industry in China. The process of invalidating bad-faith and objecting to already registered marks requires the instigation of court proceedings in China. In the meantime, the trademark holder in China can severely disrupt the freedom of overseas entity to operate within the territory including its borders for imports and exports.
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