China – how to choose your trade mark

The perceived wisdom is that the nineteenth century belonged to the UK, the twentieth century belonged to the USA and that the twenty first century will belong to China. Time will tell whether this is true, but even if it is not China has undoubtedly become a very important market. Despite this, business people are still nervous of China and of having their Intellectual Property (IP) taken and their products copied.

In this regard, China has come on a long way and is, on the face of it, responding to pressure from the West to change the situation and there are now some good laws and courts to enforce IP rights.

However, there are still some traps for the unwary and – like any country – some forethought and planning can help to prevent problems. Branding is clearly a major point for a company to get right; branding can last indefinitely and can become one of a company’s most valuable assets.

Care must be taken as to what the public at large refers to you and your brands. Get this wrong and you may lose one of your most valuable assets. ‘Yo-yo’ was lost as a brand name as there was no credible name competitors could call the product and thus yo-yo became the generic name free for all to use. There is a fine line between wanting a brand to be widely known and used and in ensuring it continues to serve its essential purpose as a badge of origin. Brand owners need to be constantly on their guard to ensure correct usage of their trade marks.

In China – as well as surrounding countries such as Hong Kong, Macau and Taiwan – there is an added dimension in that many consumers cannot readily comprehend words written in Roman letters. Chinese consumers will therefore generally refer to foreign brands by reference to Chinese versions. Consequently, adopting a Chinese equivalent trade mark removes language barriers, improves recognition of a trade mark and enables the products to reach a wider market.

If no Chinese version is provided and promoted by the brand owner, the local Chinese market will create its own. The risk is that the brand owner may not like the locally coined version; things can get lost in translation and the Chinese version may not necessarily have the desired connotations or image. Examples of famous trade marks where Chinese versions were not created when entering the Chinese market include Quaker Oatmeal and Ralph Lauren, where the Chinese consumers created their own names based on their logos:- Quaker Oatmeal became ‘Lao Ren Pai’ which translates to ‘old man brand’ and Ralph Lauren became ‘San Jiao Ma’ which translates as ‘three legged horse’.

There are various options when creating a Chinese equivalent trade mark, including literal translations and/or phonetic translations; Apple for example chose the brand name ‘Ping Guo’ (苹果), which is Chinese for ‘apple’.  It is critical that the Chinese version has no negative meanings and that the trade mark works well in all major Chinese dialects.

Chinese equivalent trade marks therefore need to be carefully developed with the help and guidance of trade mark, marketing and PR experts, as well as native speakers and translators. Once developed availability searches should be conducted and, if free, the Chinese equivalent trade mark should be registered in China as soon as any product bearing the mark is introduced to the market. This will enable the brand owner to secure the benefit of the goodwill in the Chinese character trade mark as well as the foreign mark based on Roman letters.

Failure to register runs the risk of an unscrupulous third party registering it.  It can be difficult and expensive to successfully challenge such registrations as the brand owner has to prove the Roman letter and Chinese character marks are recognised by consumers as equivalents.

China and Taiwan operate a ‘first to file’ trade mark protection system; therefore brand owners should file as soon as possible in order to pre-empt trade mark pirates. In the case of Viagra, Chinese consumers adopted the Chinese version 偉哥 meaning ‘big brother’ and a Chinese company registered that Chinese character trade mark itself,  causing Pfizer to spend over ten years trying unsuccessfully to preserve its rights in the Chinese name for Viagra.

Another useful point to bear in mind is that registration of a foreign language mark in Roman letters is unlikely to be infringed by use of a Chinese character equivalent. The marks will look and sound different or convey different ideas. Therefore both versions should be protected.   

When filing a national trade mark application in China there needs to be a Chinese character name for the applicant’s company name and address and the strong recommendation is for the company itself to choose the translation it wants, and to then consistently use it.

What does all this mean for you? It means that you should think carefully about your brand selection and what you want to be called in China and surrounding markets. Once selected, the brand needs to be protected in both Roman lettering and Chinese characters – otherwise the risk is that someone else will and the rights will go to the first to file. 

Toby Gosnall and Sarah Lait