ECA

Sued for infringing your own trade mark?!

29.10.2019 IP Australia

We strongly encourage Australian companies who are considering doing business in China to register their trade marks in China as early as possible.

A recent case involving an Australian company illustrates the risks for those who do business in China without a registered Chinese trademark.

Trade mark theft

The Australian company had been selling its products in China through local distributors for several years without incident. Things changed last month, when their Chinese distributors were ordered to appear in court to face charges of trade mark infringement. An unrelated Chinese company had registered the Australian company’s trade mark in China, and was suing them and their distributors.
As if that wasn’t bad enough, the Chinese company had also lodged the trade mark with Chinese customs. This potentially allows them to ask Chinese customs officials to seize shipments of the Australian company’s products upon import into China.

The Chinese company could be trying to build a scenario where they have the upper hand in trying to sell the trade mark back to the Australian company at an inflated price. Or it may just be seeking to hitch a ride on the Australian company’s reputation for its own products.

The Australian company now faces a long and tough battle to reclaim their rights in China. It’s much harder to fix this situation than it is to prevent it in the first place.

Lessons

There are two main lessons to take from this case.

First, if you’re contemplating doing business in China, register your trade mark in China as early as possible, well before you enter the market. China has a “first to file" trade marks system, which generally means the first person to file for a trade mark will have exclusive rights over its use.

Second, using your trade mark in Australia doesn’t necessarily mean you are free to use it in China. You should check for similar or identical existing Chinese trade mark registrations that could pose a problem for your business. Our Guide to searching the Chinese trade marks register (link below) can help you do a preliminary check yourself. We also encourage you to ask a trade marks attorney to do a professional search.

Conclusion

Play it safe by searching the Chinese trade mark register early on, and registering your trade mark in China well ahead of entering the Chinese market.

A registered Australian trade marks attorney who has China expertise and experience can help you register your trade marks in China and other overseas markets.

For all our guides and material on how to protect your IP in China, see IP Australia's China page.

Disclaimer: This article provides general information only. It is not intended to provide legal, business, or other professional advice. You should obtain any appropriate professional advice relevant to your particular circumstances.
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