With an eye on the East

Article  \  12 Sep 2012

For all New Zealand businesses, the Chinese market presents great opportunities but also some risks. Businesses considering doing business in China should think strategically about protecting their brands there. This applies whether you are manufacturing products for export elsewhere or looking to export products to China. Here are a few tips:

Register your trade mark

The best way to protect your trade mark in China is to register it. China's trade mark laws are not the same as New Zealand's. In fact the registration criteria, time frames, process and costs are different! In China, if you don't have a trade mark registration, you don't have trade mark rights. The fact that you were using your trade mark first or your trade mark is well recognised in other countries doesn't matter - if it's not registered it's not protected.

File early

China's trade mark law was established on the foundation of 'first to register not first to use'. This foundation applies in many Asian countries. By filing for your trade mark in China early you reduce the risk of someone else claiming rights in your trade mark before you can, if they begin using it in China after you. 

Registration takes time

It can take a reasonable amount of time to achieve registration of your trade mark. It might take 18-24 months from filing a trade mark before it is registered and that's if there are no hiccups along the way. When you're building your strategy plan for China make filing for trade mark protection a priority.

English and Chinese versions

You should register both English and Chinese versions of your trade mark. Even if you intend to market your product or service using the English version of your trade mark, you risk a Chinese version of your mark being created anyway. While use in English may provide benefits with consistent marketing and brand profile, consumers in non English speaking countries may struggle to pronounce and recall a brand easily. Local consumers may simply adopt their own translation for a brand - and that translation might not suit the business.

Cultural adaptation is key. It is important to understand what a brand is saying before translating or adapting and sending a certain meaning rather than making literal word for word translations. Apart from meaning, nuances and associations, phonetic appeal, associations with local literature, historic figures, and legends also need to be considered. The days of localising a product in China by simply adding a dragon, the colour gold or a few Chinese characters to the packaging are long gone (we hope!).

Not all brands are registrable as trade marks

To be registrable a trade mark must meet certain criteria. And the same rules apply to translated trade marks. A translated brand may not registrable as a trade mark if it is descriptive of the goods or services it is used for. Translating a trade mark into a foreign language will not get around the rules for registering a trade mark.

Get the right protection

The Chinese trade mark office accepts trade mark applications for words, logos, shapes, letters, and combinations of these elements. If your trade mark contains multiple elements such as a word and a distinctive logo, you might want to consider separate registrations for both.

Think about colour

The way a brand is interpreted in New Zealand will not necessarily be the same in other countries. Not only can there be differences in word meanings, but colours can be interpreted in unexpected ways. Do your homework before you choose a colour and make sure there are no negative connotations.

Record your licence

If you are licensing your trade mark to someone else to use in China, then Chinese laws require the licence be registered with the Trade Mark Office. This also allows the licensee to remit royalty payments overseas in foreign exchange.

The Chinese market offers the potential for huge reward for New Zealand businesses. The ability to locally adapt a brand is dependent on hard work, the culture and language. But when they are successful, they are hard to beat.

Careful planning and a well-thought through trade mark strategy for your trade mark protection in China can help ensure you reap the rewards and minimise the risk of finding your trade mark belongs to someone else!

An edited version of this column was published in NZRetail magazine, issue 710.