By Hoh Jerick
From being an under-developed country due to years of war and poverty, China today has tremendously reached 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, are still ever-growing.
Venturing into a large market is vital for a company’s expansion. However, it is just as vital for a 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 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 mode of communication. It would have been helpful for Pfizer had it 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 led to a massive loss on Pfizer’s end. And it was such because the citizens of China and Taiwan would mainly apply the Chinese transliteration of 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 outlets, only the famous yellow arches would be presented together with its Chinese transliteration. As such, without a trademark’s corresponding Chinese mark, the average consumer in China or Taiwan would not be able to identify the mark “McDonald’s”, which would be a matter of serious consequence for any company seeking to profit and grow.
Bad faith filings of trademarks are prone to occurring in China, where 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 led to a rise in trademark piracy. And a large number of Chinese language equivalents of English marks provides abundant possibilities and opportunities for trademark piracy. Although currently Intellectual Property rights have been reinforced in China, there is still insufficient enforcement by the China Trademark Office (CTMO), such as the difficulties of proving to and convincing the CTMO that an original mark has 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. With the diversity of our cultures and languages, each and every difference in these aspects must be studied as a precaution for the setbacks that might occur.
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