Trademarks Boost Confidence to Chinese Companies When Going Global
Updated: 4 21,2021 Source:China IP news

Recently, the China Trademark Association jointly with a big data institute issued a report, revealing the quantity and trend of trademarks applied for registration by Chinese applicants worldwide and their enforcement actions from the 6th Five-Year period (1981-1985) to the 13th Five-Year period (2016-2020). "This year is the beginning of the 14th Five-Year Plan period (2021-2025). The report can provide a reference for our companies to make trademark portfolio strategies and decisions when going global, assisting Chinese brands to make wiser decisions in this regard," said a writer of the report.

Companies more adept at trademark portfolio planning

According to the report, some important events including China's accession to the World Trade Organization (WTO) and forming IP ties with the countries along the Belt and Road over the past four decades have contributed in no small part to the increasing number of trademarks filed for registration by Chinese companies worldwide. From the 6th Five-Year period to the 9th Five-Year period (1996-2000), the number of trademarks applied by Chinese applicants in the world increased at a modest pace, accounting for not more than 4% of the total. From the 10th Five-Year period (2001-2005) to the 12th Five-Year period (2011-2015), the trademarks filed by Chinese applicants globally went up at a respectable speed, with the number increasing from 1.568 million, 17.2% of the total, at the end of 2005 to 9.095 million, 39.6% of the total, at the end of 2015, injecting vigor into global trademark undertakings. During the 13th Five-Year period, trademarks applied by Chinese applicants worldwide achieved a dynamic growth, reaching 32.657 million and accounting for 70.42% of the total. Companies have gradually honed their skills and become more serious in trademarks.

"The statistics mentioned above suggests that with the deepening of China's reform and opening-up and the rapid development of export trade, enterprises have been placing a higher value on overseas trademark registration and protection while dramatically enhancing the manufacturing and export abilities," said Yang Yexuan, former vice director general of the Trademark Review and Adjudication Board under the then-State Administration for Industry and Commerce, adding that the measures including China joining the Madrid Agreement Concerning the International Registration of Marks and Nice Agreement Concerning the International Classification of Goods and Services for the Purpose of the Registration of  Marks have broaden horizons for companies' trademark protection.

"The statistics reflect China's progress in economic globalization, the policy impacts of the trademark registration facilitation reform, the ability improvement of Chinese businesses and their brands in global markets and the enhancement of brand consciousness in microscopic terms," said Du Ying, Director of IP Research Center, Central University of Finance and Economics, adding that the summary of the above trend not only contributes to analyzing the target countries or regions of Chinese trademark applicants and knowing the foreign trade vitality, but also enables businesses to forecast the focus of China's economic partnerships in the future so as to predict the market trend more precisely.

Based on the Nice Agreement, the report also analyzes the classification of overseas trademark applications from Chinese companies from 1981 to 2020, indicating that year-on-year growth occurred in every class, with the biggest winners being Class 3, Class 7, Class 14, Class 16, Class 18, Class 35 and Class 42, and the second-bests being Class 9, Class 11, Class 21, Class 25 and Class 28 goods or services.

"In fact, high volumes in Class 9 goods (electronic, communication and computer devices), Class 25 goods (clothes, shoes and hats), Class 35 services (commercial services) overseas mirror trends at home. The economic development mode of Internet Plus makes traditional industries have great demands for trademark registration in Class 9 goods, further stimulating the number of trademark applications. Class 25 goods are always China's fortes, ranking the well-expected second place. The burst of Class 35 services is primarily contributed by the e-commerce boom," Du introduced.

Companies more sensitive to right enforcement

Based on the data of the global trademark lawsuits involving Chinese companies from 2011 to 2020, Chinese companies appeared in more and more civil trademark cases as time went by and became increasingly sensitive to right enforcement. Comparison between the 12th Five-Year period and the 13th showed upticks across the board in administrative, civil and criminal cases involving Chinese businesses with civil ones outperforming the other two at 300%.

In addition, the report has an eye on analyzing the trend of administrative cases overseas involving Chinese companies from 2011 to 2020. During the 12th Five-Year period, the number of the trademark administrative cases worldwide involving Chinese companies was below 10,000 and there were just few invalidation cases. Since 2016, cases of all sorts have boomed with invalidation cases skyrocketing 190 times.

"The increasingly improving IP protection awareness of Chinese businesses is the internal cause for their actions in right acquisition and enforcement while the improvement of economic development and legal context being the external one. The number of trademark lawsuits is proportionate to those of trademark applications and registrations and economic development. The larger trademark right base (bigger number of rights) begets more trademark cases," said Shen Lanying, a partner at Beijing Sanyou IP Group, adding that the vitality of companies in trademark enforcement depends on the number of the trademark ownership and economic vitality. During the 13th Five-Year period, the number of trademarks owned by Chinese companies, the economic development level and the degree of companies' participation in international business are far beyond those during the 12th. This consequently rates the hike of trademark cases litigated by Chinese companies.