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Why do China trademarks matter anyway?

By Dan Harris

China trademarks are worth way more than their weight in gold.

I spend a huge portion of my waking hours talking to companies doing business in China or looking to do business in or with China. One of the things I virtually always try to discuss with all potential and actual clients at least once (and usually during our first conversation) is the need for them to protect their IP in China. Maybe one out of fifty of our clients has no IP to protect, but the rest do and it is surprising how many of them do not realize the need for them to do so when dealing with China.

Above of all else, I talk about the importance of filing for trademarks in China and how if you don’t get your trade names and logos registered as trademarks in China, someone else eventually will and then you will be facing all kinds of trouble. And then I talk about the trouble. That is nearly always enough to convince Western companies of the need for a China trademark.

But the other day I was talking with a very young, super-smart owner of a start up tech company and after I recited my “trouble speech” on China trademarks, he asked me why trademarks are important. As he put it, “I understand that someone else could end up with our trademark in China, but why are trademarks so valuable in the first place?

“Great question,” I responded and then asked him what kind of car he drives. He said BMW (I was all but counting on this) and then I proceeded to ask him if he knows or even cares how many patents BMW has on the car he drives and of course he did not. I then asked him what then made his BMW distinctive enough that he would buy that car over, let’s say a Honda. His response was that he knows BMW makes great cars. I then explained that he knows BMW makes great cars and he knows his car is a BMW because it is the only car company in the United States (and in China too, I presume) that can brand its cars “BMW.”

Fortunately, he seemed satisfied with my answer. But, really, what makes a trademark so potentially valuable? Some or all of the following:

• Your trademark can give your business its identity.

• Your trademark can give your goods or services brand recognition.

• Your trademark distinguishes your goods or services from others in the marketplace.

• Your trademark can be used to stop others from using (infringing on) your name or your logo.

• Your trademark can be used to show that you own a particular name or logo.

• You can license or sell your trademark.

Did I miss anything?

Dan Harris is founder of the Harris & Moure law firm, a boutique international law firm focusing on small and medium sized businesses that operate internationally. China is the fastest growing area for the firm. Dan writes as a source of China legal and business information.

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