Bad Faith Trade Mark Registrations in China

Prior trade mark registrations, also called ‘bad-faith registrations’, are a significant problem that many European companies encounter in China. This process commonly involves a Chinese company first registering the trade mark of a foreign company in China with the express intention of selling it back to the foreign company at an inflated price. Finding out that a Chinese company has registered a bad faith trade mark is one of the biggest complaints of European Small and Medium Enterprises (SMEs) trying to enter the Chinese market. These prior registrations can limit the foreign company’s freedom to operate by restricting its ability to enter the China market or even to source goods from China.

As an example, a Scandinavian SME used a Chinese factory to make its goods for export. The Chinese supplier registered the Scandinavian company’s trade mark in China and engaged China’s customs to intercept export goods bearing the trade mark, thereby disrupting the Scandinavian company’s business.

This case demonstrates that a sound knowledge of the instruments available to protect your company’s intellectual property is of utmost importance, and that it is worth remembering some of the key reasons for spending money on registering trade marks:

• To protect products and ideas;
• To protect and harness brands and reputation;
• To justify research and development costs;
• To make sure new rights belong to you;
• To prevent other companies from utilizing your inventions and designs;
• To keep competitors at a distance;
• To create market space for future development;
• To create a strong defense in case of conflicts / infringement;
• To record unique technology and designs for investors;
• To create a platform for licensing and co-operation agreements;
• To create a qualified knowledge base for decisions about registering rights internationally

Read further on our blog page YourIPinsider.eu!