Protecting and adapting your brand in Asia

EKM patent & trade marks is a firm of highly qualified and internationally experienced patent and trade mark attorneys focused on the registration of intellectual property rights and is a Campaign Partner of the Australian Made Campaign.

Asia is a very important and strategic market for businesses making and growing Australian products and produce, and the economic transformation of the Asian zone creates real opportunities for those desirous to expand their business internationally.

Australian Made Campaign Limited has been taking active steps to protect the interests of its licensees in Asia: the Australian Made, Australian Grown logo is duly registered as a trade mark in relation to a wide range of goods and services in China, Singapore and South Korea.

There are some pitfalls to watch out for when trading in the Asian region, in particular in countries such as China or South Korea, which have a “first to file” system of trade mark protection.

An Australian trade mark registration does not give you rights in another country and if you are the owner of a trade mark in Australia, it is therefore important to ensure that your brand is fully protected in all your countries of interest and is adapted to the local markets.

China and South Korea adopt a first to file system of trade mark protection

While Australia has a “first to use” system (the first user of a trade mark on the market will generally be considered as the owner of the trade mark irrespective of whether the mark has been registered), China and South Korea use a completely different system, namely, the “first to file” system. Under this system, a party who is the first to file an application in China or in South Korea for a mark generally has superior rights over another party who may have been using an unregistered mark in the country before the filing date of the application.

The “first to file system” encourages earlier registration by providing greater certainty of protection of trade mark rights to the first person to file an application for registration. However, a downside of this system is that it allows unscrupulous applicants to defeat the rights of the “true” trade mark owner by filing the trade mark application first.

Filing early is advisable

It is recommended that you register your trade mark in China and South Korea as soon as possible, preferably before you enter these markets, to prevent a third party, including potential local distributors, from obtaining information about your proposed activities and proceeding to file an application for your mark in these countries in order to block your activities, trying to obtain an exclusive or preferable arrangement with you or try to procure a payment from you for the transfer of the mark.

Filing an application early is advisable, especially if you are already using your brand on your website and/or you are conducting meetings or negotiating distribution or license agreement with third parties in China and South Korea. In this regard, it is not an uncommon practice for local distributors to apply to register a foreign company’s brand, even sometimes while the negotiations are still going on. If a deal is eventually not made or if you need to change your distribution network at a later stage, it is always preferable to ensure that you keep the control of your assets and to always register your trade mark in your company’s name. If the brand is already registered by your Chinese or Korean distributor or agent, you should require ownership to be transferred back to you early on in the commercial relationship to avoid later disputes.

It can be very difficult, as well as time and money consuming in litigation to win your own trade mark back.

Even if you are not intending to sell your goods in China and South Korea, but are only manufacturing the goods in these countries for export to Australia and other countries, you should still consider filing an application for trade mark protection in China and South Korea. This is because if the branding of your products is taking place in these countries as opposed to mere manufacture, then you are deemed to be using the mark there.

So, if another party has filed an application for an identical or substantially similar mark, the manufacture and export of goods bearing the registered trade mark will amount to an infringement of that registration. This would be the case even if you did not sell your goods in China or South Korea.

Adapting your brand

Before branding your products in China or Korea, it can be useful to check that your brand has the same meaning there as in Australia and that this meaning is relevant to the market, for example that your trade mark does not bear any negative or pejorative meaning for the local customers.

Moreover, a third party may translate your trade mark and register the local version and it can be really difficult to obtain cancellation of such fraudulent trade mark, even if you have already protected the original version of the trade mark. Therefore, you should consider filing local translations and/or transliterations of your trade mark in these countries. Promoting and protecting an official local version of your brand will assist in defending your brand against unofficial renaming of your trade mark by unscrupulous parties.

Once a decision is made to use a local version of the mark, the next step is to decide whether to choose a literally translated or a phonetically translated mark.

When choosing a translation of your mark, you should ensure that the translation result in a mark that has some favourable meaning to local consumers and does not bear a meaning which would have a negative impact on a consumer.

For example, Pepsi attempted to translate its slogan “Come Alive: You’re in the Pepsi Generation” into Chinese. Unfortunately, the translation of the mark was “Pepsi brings your ancestors back from the dead” which is not a favourable meaning for the Chinese consumer.

A transliteration of the mark consists in adopting local characters which will be pronounced like your English version of the mark. Ensure that the transliteration does not result in an absurd meaning or negative connotation with the consumers.

A good example of successful transliteration of a well known mark is Coca Cola which is transliterated in China to “Ko Kou Ko Le”, conveying the idea of “permitting mouth to be able to rejoice”.

A combination of both options where you choose local characters that sound like your mark but at the same time ascribe qualities of your product may also be a good option. But once again, you have to be careful to ensure that the local version does not have an absurd or negative connotation with consumers or even result in a vulgar meaning.

Jennifer and Léonard can be contacted on +61 3 9829 0999 or jennifer.mcewan@ekmpatent.com and leonard.pirastru@ekmpatent.com respectively.

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