What is the most common IP issue affecting foreign businesses in China?
Failing to protect their brand early enough through a Chinese trade mark!
One of the most important differences between the Chinese trade mark system and ours is that China uses the first-to-file rule. This means that the person who files their trade mark application first is generally granted the right to that trade mark and can stop others from using it.
It’s not just new businesses that get stung by failing to secure their trade mark in China, In 2012 Apple were forced to buy back their iPad trade mark for US$60 million dollars, after they failed to secure it early enough.
It doesn’t matter if you’ve been using your brand for years. If someone else files a trade mark in China before you do they have the right to sue for infringement, and have Chinese Customs seize infringing goods leaving or entering China. That’s why it’s so important to register your trade mark in China early.