Critics have often maintained China’s intellectual property system does not sufficiently protect foreign brands; however this recent decision is certainly a step in the right direction.
Under the Chinese system, the first party to file for a trade mark is awarded protection. In Australia, on the other hand, the first party to use the trade mark is awarded protection (unless there is no prior use, in which case registration is awarded on a first come first served basis). The way the Chinese system operates means it is vital brands register the trade mark in China as soon as possible, before expanding into the Chinese market. Otherwise, the brand may find the trade mark has already been registered to a trade mark squatter, or to a party producing imitation goods.
In recent months, the Chinese Government has vowed to tackle the issue of intellectual property infringement caused by the legions of fake goods produced and offered for sale in the country. There have also been changes to Chinese trade mark law over the past few years to take on trade mark abuse. This decision indicates steps are being made to support foreign rights holders. It also provides reassurance for foreign brands looking to expand into the Chinese market and pursue an active brand protection strategy.