Registering a trademark in China: importance and advantages

China is the second largest economy in the world, with a huge market and unlimited business opportunities. It has become a worldwide trend for foreign investors to invest and do business in China. And as a passport in the commercial market, the role of trademarks is self-evident.

According to the 2021 report, China has ranked first in the world in terms of trademark applications for 14 consecutive years, and as of the end of June this year, it has achieved for the first time three figures of “cumulative trademark applications, cumulative trademark registrations and effective trademark registrations” exceeding 10 million. At present, China has one valid trademark for every 7.5 market players on average.

In such a competitive environment in the Chinese market, businesses need to think about how their brand can break out, but at the same time, applying for Chinese trademark protection is also a top priority. There are several reasons why we hope to inspire you:

1. China has a large population and the need to strengthen the identity of its huge consumers requires the registration of trademarks. As Chinese consumers’ culture, income levels and consumption attitudes continue to rise, Chinese people are becoming more brand conscious and have a preference for well-known brands, which is known as “brand consumption“, i.e. using branded products to meet people’s material and cultural needs.
2. Having a registered trademark is a prerequisite for being on one of the major e-commerce platforms in China. Chinese people have shifted their consumption habits from physical shops to online shopping, and not only young people, but also the older generation has gradually embraced online shopping and the convenience and pleasure of this mode. Since 2009, every year on November 11, we call it “Double Eleven“, the biggest e-commerce consumer festival of the year. With the most favorable deals available on Double Eleven, people go on a shopping spree from 00:00 midnight. Last year in 2021, on November 11, T-mall and Jingdong together made over RMB 889.4 billion in sales in a single day.
3. It has to be admitted that the Chinese market is huge and competitive but also full of counterfeit, copycat and poor quality products. Although the Market Supervision Administration has been cracking down on these products and sellers in recent years and one can feel that the market has been cleaned up considerably, trademark protection has always been important.
   In China, there are two ways of trademark protection:
   • one is for the State Administration for Industry and Commerce at all levels or the Public Security Economic Investigation Department to take the initiative to exercise its power to investigate and deal with cases of counterfeiting of registered trademarks and trademark infringement occurring within its competent jurisdiction
   • the other is for enterprises and individuals to report trademark violations and crimes to the two aforementioned authorities or for the relevant trademark user to sue for trademark infringement in court.

   Obtaining a trademark registration prevents unfair competitors, such as counterfeiters, from using the same or similar marks to market inferior or different products or services. The trade mark system enables competent and enterprising businessmen to produce and sell goods and services under the fairest possible conditions, thus promoting the normal development of the market.

4. In terms of Chinese law, registering a trade mark protects one from infringement and use by others, and allows one to maintain the reputation and image of the goods. Conversely, if one’s name or brand is registered by others first, then the one will lose the exclusive right to use the trademark and also will inevitably lose the market that has carefully planned and painstakingly operated, and the one may instead become an infringement defendant. Therefore, in order to enter the Chinese market, it is imperative that you obtain trademark protection in China in advance.
5. The cost of applying for a trademark in China is not high compared with other regions and the trademark holder enjoys the exclusive right to use the Chinese trademark. Once the trademark is received by the public, its value continues to grow as the company develops increasingly. As a trademark is an intangible asset, the Chinese trademark owner has the right to license others to use the trademark or to trade in return for remuneration.

We hope that the above will be of some help to all our friends abroad and wish you success in doing business in China!