As soon as you make a decision to establish your presence in China, you should start considering registering your brand, your logo, your slogan and other applicable trademarks with a help of a reliable local lawyer. The application typically takes about 18 months to process and the cost is about $500 per trademark.

In China trademarks are registered on “first to file” basis regardless whether it’s been in use elsewhere for decades. This basically means that prior art argument wouldn’t work in 99% of the cases if someone has already registered your trademark, even though you may have been using it for years. Big brands have found themselves in this situation and were forced to fork out substantial sums of money to recover their brands.

It would come to no surprise that many people in China have seen an opportunity to take advantage of registering famous brands before their legitimate owner would do so. Since there are basically no effective legal recourse in such cases, companies are left with two choices: negotiate with the registrant to have them transfer your brand back to you for a fee, or re-brand your product for Chinese market.

In China trademarks are registered on “first to file” basis regardless whether it’s been in use elsewhere for decades

As much as upsetting it may be to companies, negotiating and buying back your trademark from a squatter may be the cheapest solution. If you choose this route, it is essential to negotiate through a lawyer or a third party without disclosing yourself as an original owner of the brand. Otherwise, the Chinese registrant of your brand may realize how important it is to you which will be definitely reflected in the asking price.

My company has found itself in a similar situation not too long ago. Fortunately for us, the squatter, as I call it, has registered our old brand, before we went through a major re-branding process a couple of years ago. So, what they got is our old logo but they did register our English company name which stayed the same.

At this moment, we have decided to register our brand and new logo in the other categories, which are similar to the original one, and forgo negotiating with the Chinese registrant. At the same time, we have also applied to register the squatter’s own logo and name as shown on their website to strengthen our negotiating position in case we do decide to recover our trademark name in the original category in the future.

In subsequent post, I will discuss more issues related to trademark protection in China.