Summary

The article provides an overview of intellectual property (IP) registration in China, emphasizing the importance of being the first to file for trademarks, copyrights, and patents to secure protection in a "first to file" system.

Abstract

China's intellectual property landscape presents unique challenges for foreign entities due to its "first to file" system, where early registration of trademarks is crucial to prevent unauthorized use and potential legal disputes. The article outlines the process for trademark registration through the China Trademark Office (CTO), noting the necessity for filing in multiple classes under the NICE Classification system if a trademark covers a range of goods and services. It advises foreign companies to register trademarks in both English and Chinese and to seek local advice for effective IP enforcement. Copyright in China arises automatically and is reinforced by the country's adherence to the Berne Convention, offering protection to foreign creators. Recording copyright with the National Copyright Administration of China can be beneficial in ownership disputes. The patent system in China also follows a "first to file" approach, with three types of patents available: invention, utility model, and design. Only invention patents undergo a substantive examination, while utility and design patents can be obtained more quickly. The article suggests that filing for both invention and utility model patents simultaneously can be a strategic approach. It also highlights the importance of maintaining patents by paying annuities to prevent lapses.

Opinions

The "first to file" system in China for trademarks can lead to situations where a foreign company's trademark is registered by another entity, creating potential for legal disputes and demands for payment to transfer the trademark.
Opposing a filed trademark application or canceling a registered trademark in China can be a costly and time-consuming process, often requiring proof of bad faith in the initial application.
Registering trademarks in China is advised to be done promptly and through a recognized agent to secure rights efficiently and cost-effectively.
Copyright ownership in China generally defaults to the employee, but foreign companies can include specific provisions in employment contracts to alter this.
Recording copyright in China is recommended for the additional security it provides in ownership disputes, despite the small cost involved.
The patent system in China requires proactive filing to avoid the complexities of invalidation proceedings based on the "absolute novelty" standard.
Filing for both invention patents and utility model patents simultaneously can provide broader protection and strategic options for patent holders.
Maintaining a full register of IP rights and paying patent annuities on time is emphasized to prevent the lapse of patent protection in China.

A Primer for Intellectual Property Registration in China

Trademark

The main problem a foreign entity faces in China is that it is a so-called “first to file” country. This means that the first company to apply for a trademark registration, whether that company is Chinese or foreign, will obtain registration and can prevent others from using the trademark. There is no requirement to have any intention to use the trademark. In some instances, a foreign company has entered the Chinese market not only to find a competitor has registered the trademark it owns elsewhere in the world, but that the competitor is seeking to enforce it against them and demanding payment to transfer the trademark.

Chinese law does provide grounds for opposing a filed application or canceling a registered trademark. However, procedures can be costly and time-consuming, and to succeed it is often necessary to prove that the initial application was made in bad faith. Being the first to file for registration is always the cheapest and most efficient way to secure a trademark and prevent others from encroaching on your patch.

Applications for trademarks should be filed with the China Trademark Office (CTO) through a recognized agent. The cost of filing is low, but the benefits are substantial.

China follows the “NICE Classification” system and applications are made on a per-class basis. Therefore depending on the range of goods and services a trademark is intended to be used for, the applicant may have to file several independent applications.

The following simple steps will help to safeguard company trademarks:

Apply to register your trademarks as soon as you are starting to think about China;
Register names in both English and the Chinese translation; and
Seek advice on the most appropriate way to enforce your IP rights in China.

Copyright

In China, copyright arises automatically and entitles the creator of an original work to protection if the work was first published or originated in China. As China is a signatory of the Berne Convention for the Protection of Literary and Artistic Works 1979, foreign creators are offered the same protection for any work created outside of China.

Copyright lasts for a period of fifty years from the date of publication if the author is a company. Individual ownership of copyright subsists for the author’s life plus fifty years.

It is possible to record copyright in China and this can be done at the National Copyright Administration of China. To obtain a copyright certificate, companies or individuals must submit evidence of ownership and the date of creation. Recordal can prove very useful if a dispute arises over ownership. There is a small cost to obtaining it depending on the nature of the copyrighted work — but the comfort it provides is well worth the investment.

One anomaly in China’s copyright law relates to copyright arising during the course of employment. In China, if a work is created during the course of employment, the copyright will generally belong to the employee. However, for the two years from the creation of the copyrighted work, the employee cannot license the copyrighted work without the consent of its employer. A foreign company may seek to alter this position by including specific copyright ownership provisions in its employee contracts.

Patent

The Chinese patent system is also a “first to file” system and patent applications may be filed in the name of a corporation or an individual. There are three types of patents in China:

The invention patent;
The utility model; and
The design patent.

The design patent is similar to a registered design in Europe and the utility model is what is sometimes called a “mini-patent” — similar to its German equivalent and requiring a lower level of inventiveness.

Of the three types of patent, only the invention patent will undergo a substantive examination procedure by the State Intellectual Property Office (SIPO). Generally, it takes between two and three years for an invention patent to be granted, while utility and design patents will take from one to two years. It is possible to file for both invention patents and utility model protection at the same time and then drop the utility model protection once the invention patent has been granted.

Patent applications can be originated at SIPO, as with any other national office. China is also a signatory to the Patent Cooperation Treaty (PCT) and consequently, PCT applications can be converted into Chinese patents by undergoing the “national phase” through SIPO in accordance with the usual PCT procedures.

Chinese law also provides grounds for invalidating a registered patent. China adopts the “absolute novelty” standard, which means a patent can be invalidated by prior publications of patents anywhere in the world. However, procedures can be costly and restrictions are set for evidence that is admitted by SIPO. As with trademarks, the better option is to file as soon as possible to avoid unnecessary costs and delays.

It should be noted that a patent can lapse if the patent annuity is not paid on time. So maintaining and updating a full register of a company’s IP rights is as important in China as in other markets.