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Select the right brand for the Chinese market

03

MAY

2019

From being an under-developed country for its years of war and poverty, China today has tremendously reaches its peak as the second largest economy, just below the United States. However, instead of being complacent as a runner-up, China and its neighbour across the Southeast ocean, Taiwan, is still ever-growing.

Venturing into a large market is vital for a company’s expansion. However, just as vital is for the company venturing into China to be alert of potential challenges in using and securing a suitable brand, as Pfizer learnt.

The first challenge companies face is that China and Taiwan apply the first-to-file system for trademark registration, meaning an individual or company does not have to prove use or an intention to use in order to register a mark as long as they are the first to file the application. This signifies the issue faced by a trademark proprietor with a famous brand that has been in use for a number of years to be objected for registration simply because they did not file their application first. The second challenge companies’ face is that the English language is rarely used in China or Taiwan as a system of communication. It would have been helpful for Pfizer if it had known about these two challenges in their endeavours to sell their newly discovered product “Viagra” in China. Viagra was spreading throughout the U.S. and Europe like wildfire even before Pfizer sought out to register their trademark in the U.S.

Oddly, the commonly used term and very popular name for “Viagra” in China was its Chinese transliteration “伟哥” (Wěi gē). This popular term was first registered as a trademark by a Chinese company instead of Pfizer. Although Pfizer has filed the English term “Viagra” in China, the Chinese transliteration was not filed alongside which lead to a massive loss on Pfizer’s end. And such is because the citizens of China and Taiwan would mainly apply the Chinese transliteration of any globally known products rather than the product’s English title. For example, McDonald’s Chinese transliteration “麦当劳” (Mài dāng láo) in China and Taiwan is mainly associated by the people, and in certain McDonald’s outlet, only the famous yellow arches would be presented together with its Chinese transliteration. As such, without a trademark’s corresponding Chinese mark, the average consumers in China or Taiwan would not be able to identify the mark “McDonald’s”, which would be a matter of serious consequences for any company seeking to profit and grow.

As a series of bad-faith filings of trademarks are prone to occur in China, famous brands/trademarks would be registered with the intention to be sold to the original proprietors, long before the original proprietors ever extended their businesses to China. Multinational companies are required to take a step further in safeguarding their trademarks on products or services and not be a victim instead.

Furthermore, the narrow interpretation of what amounts to bad faith in China has well led up to much trademark piracy to be taken place. And the large number of Chinese language equivalent of an English mark provides an abundant possibilities and opportunities for trademark piracy. Although the current Intellectual Property has been reinforced in China, there are still insufficient enforcement by the China Trademark Office (CTMO). Such as the difficulties of proving and convincing the CTMO that an original mark had gained reputation in China prior to the application of the pirated mark. As certain brands that would be considered widely known in other countries may not be as such in China. With its own brands of smartphones such as “Oppo”, “Lenovo” and “Huawei”, China is currently branching out to influence the world economy and to some who may not know, Google in China is considered to be ranked as the number 3 search engine after China’s own “Baidu” and “Soso.com”. With the expected standards of products and services to be improved as more quality products and services are coming out of China, it is more crucial than ever to securely protect a trademark proprietor’s Intellectual Property rights.

From the above, it should be understood that the Chinese market must be treated as distinct from the others when a company decides to enter the global market with their product or service. In our diversity of culture and language, each and every difference in these aspects must be studied as a precaution for the setbacks that might occur.

About the Firm

KASS International Sdn. Bhd.
Address Suite 8-13A-2, Menara Mutiara Bangsar, Jalan Liku, Off Jalan Riong, Bangsar, 59100 Kuala Lumpur, Malaysia
Tel 60-3-2284 7872
Fax 60-3-2284 1125
Email hello@kass.asia
Link www.kass.com.my

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