Companies warned to register trademarks first before operating in China

Australian businesses planning to operate in China should register trademarks ‘well before entering the market’.

Assistant Minister for ­Industry, Innovation and Science Craig Laundy. Picture: Ray Strange.

Australian businesses planning to operate in China should register their trademarks “well before entering the market”, warns ­intellectual property counsellor David Bennett.

This is because “China has a first-to-file trademark system”, whereby rivals or exploiters can sometimes gain control over a company’s identity.

At the launch of a guide for businesses operating in China, published by the federal government’s intellectual property agency, IP Australia, Mr Bennett said companies should make registration a priority, before having business discussions or displaying products at trade fairs.

The guide says: “You have no rights to your trademark in China until you register it.”

It urges Australian businesses to “strongly consider developing a Chinese language brand”, which could be a transliteration or translation of the English name, or a completely new brand. It says: “If Chinese consumers don’t like the sound or ­impression of your brand, they may refer to it by an alternate name, which could lead to your losing control of your brand.”

A domain name will often be the first contact with customers, the guide says, so “it’s important to secure your domain name, as losing control can confuse ­customers and result in lost ­business”.

Sophisticated email scams, it warns, offer to sell domain names or protect your business from others seeking to register your domain name.

The Assistant Minister for ­Industry, Innovation and Science, Craig Laundy, said that to take full advantage of China’s “amazing business opportunities, IP must be the first thought of any Australian business entering the region”.

China, he said, receives more trademark, patent and industrial design applications than any other nation in the world, “so it’s important when you’re registering your IP, you’re doing it correctly”. It has more than 13 million registered trademarks already in force.

Licensing and technology transfers, the guide says, can be an effective way for companies to get revenue from the Chinese market without entering China themselves — though this ­requires strong contracts that are enforceable in China.

Mr Bennett said China’s ­recent establishment of dedi­cated IP courts in 10 major cities was a positive sign of the strengthening of protection available in the country. These courts, he said, have the power to issue injunctions and award damages for ­infringements.

Administrative enforcement is also being applied, he said — through which Australian businesses can request Chinese authorities to conduct raids, seize goods and issue fines on those who infringe IP rules.

“Chinese Customs are also able to seize shipments of infringing goods before they leave China’s borders,” he said.