A new study on Chinese Brands conducted by CompuMark shows that in just four years China has climbed up from number 10 in international filing volume of trademarks to number two. And it is very likely to outstrip the current number one, the US, in less than two years.
Since some years ago China manages to set up new trademark applications records every year, surprising the onlookers again and again with trademark application numbers rising with an unprecedented speed.
According to the study, the EU Intellectual Property Office (EUIPO) processed over 11.000 Chinese trademark applications in 2017, 55% more than the previous year. The German Trademark and Patent Office (DPMA) also recorded a significant rise in Chinese trademark applications in 2017. That is no big problem as long as Chinese companies or individuals stick to their own trademarks and do not register trademarks preemptive to occupy new territory (Go game) and hamper the market.
But trademark registrations can become a huge problem for domestic companies, as we already reported in December 2017 (https://en.blog.chinabrand.de/2018/05/30/loopholes-in-trademark-registration-procedure/) when they are bad faith registrations of trademarks similar to their own trademark, especially when they are registered in the EU. A European trademark certificate makes it easier for the Chinese company to import their fake products to Germany, can be used to hinder the German company from entering the Chinese market or registering trademarks there and serves to legitimate counterfeiting behavior in processes in Chinese courts.
One of the strategies of Chinese counterfeiters is the registration of a well known European trademark written in Chinese characters. That makes it nearly impossible for the concerned company to detect the infringing trademark and even standard tools for trademark monitoring will not be able to find this sort of infringement. As Chinese customers prefer to relate to companies and product names through their Chinese characters a bad faith trademark registration in Chinese characters can have a tremendous damage on the brand reputation and the company’s turnovers.
Another strategy, which is often seen, is to register trademarks in classes or sub-classes, which the original manufacturer did not cover. It might happen that a valve manufacturer with the trademark ABC suddenly finds a Chinese company with the same registered trademark offering maintenance or repair services or even an online shop for valves.
As such malicious trademark strategies will gain in importance worldwide. It is therefore highly advisable to search relevant data bases on trademark registrations on a regular basis, with a focus on figurative marks and trademarks in Chinese characters to avoid irrevocable damages.