Chinese Brands Go Global - CompuMark · BEST PRACTICES FROM MAINLAND CHINA 57 Best Pratices from...

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Chinese Brands Go Global

C H I N A T R A D E M A R K R E P O R T 2 018

COMPUMARK CHINA TR ADEMARK REPORT 2018 03

ContentsAUTHOR'S INTRODU CTIO N 04

BACKGROUND 06

CHINESE APPLICANTS — FOREIGN TRADEMARK A P P L IC ATIO N S 09

Annual F i l l ing Volum e S in ce 2012 10

Ke y Registers 12

One Belt and One Road 14

Growth 15

Top Chinese Appl ican ts — Fore ign Trademark A p p l icat ion s in 2016 16

COUNTRY / REGION A N A LYSIS 19

Where Did Chinese A p p l ican ts F i l e Trademark Appl icat ion s in 2017? 20

Top F i lers Of Fore ig n Trad em ar k s 21

Top F i lers Of Fore ig n Trad em ar k s — Trends 22

Internat ional Regist rat ion s — Top Appl icants By O w n er Coun tr y 24

Internat ional Regist rat ion s — Most Frequent ly Des ig n ated Coun tr ies 25

CL ASSIFICATION AN D IN DUSTRY A N A LYSIS 27

Nice Class Dist r ibut ion — Foreig n Appl icat ions By Chin ese A p p l ican ts 28

Chinese Trademarks — Com par in g Foreig n and Domest ic Appl i cat ion s 30

Industr y Sector Dist r ibut ion 32

Indu str y Se ctor Growth — Foreign Trademark Appl icat ions 2012 to 2017 34

Nice C las s Dist r ib u t ion 2017 — Goods Vers u s Se r v ice 36

CHINA BY REGION 39

Sou rce Of Fore ign Trade mark Appl icat ions By C hines e Appl icants 40

TRADEMARKS AROUND THE WORLD 43

Annu al Growth Of Major Trademark Registe rs 44

Large st Registers By Annu al F i l ing Volu me 46

SUCCESS RATES 51

C ompu mark Su cces s Index — Su cces s Rate Ac hie ve d By C hines e Appl icants 52

C ompu mark Su cces s Index 53

Trademark Best Pract ice s — F i l ing Internat ional ly 54

BEST PRACTICES FROM MAINL AND CHINA 57

Be st Prat ices f rom Mainland C hina 58

CONCLUSION 61

COMPUMARK — HELPING BRANDS OWNERS GO GLOBAL 62

COMPUMARK CHINA TR ADEMARK REPORT 201804

Following in the footsteps of mainland China’s domestic trademark register, which is the largest in the world, Chinese brands are now appearing on foreign trademark registers in increasingly large numbers.

CompuMark™ has been tracking the drive from mainland China to build global brands, and this report shows that – in just four years – Chinese brands have gone from number 10 in the world by filing volume to number two, and are likely to be challenging US brands for number one in the world in 2018.


INTRODUCTION

Four years ago, CompuMark™ wrote a landmark report looking at Chinese brands in a global environment. Back in 2014, Chinese trademark activity was increasing at an unprecedented rate — applications on the Chinese domestic trademark register had broken the two million barrier (the first register in history to reach this milestone), and foreign trademark applications by Chinese applicants were at 30,000 and growing by more than 10% per annum.

In 2014, these figures felt colossal – they represented growth and volume that the trademark world had never seen before. But looking back from our 2018 vantage point, they seem relatively small in scale compared to what has followed.

In 2017, the Chinese domestic trademark register saw more than 5.2 million applications filed1 , approximately ten times the size of the world’s second largest register (the USA). In the first week of September 2017, there were more than 116,000 applications filed on the Chinese register – more than were filed on the EUIPO register in the whole of 2016.2 Chinese applicants filed nearly 120,000 foreign applications in 2017 – if this was

a separate register it would rank between Mexico (138,400) and the European Union Intellectual Property Office (EUIPO) (118,762) as the 8th largest register in the world. Chinese applicants filed one in every nine US applications in 2017 – more than 50,000 applications in a single year.

The statistics alone are remarkable, but more importantly they tell a story. Trademark applications are a powerful indicator of economic activity. They contain information on markets (registry country), time (filing date), source (applicant country) and business activity (classes and specifications). They can be used to see where a journey has started, the route it has taken, and where it is leading.

With access to the world’s largest trademark record library3 and 50+ years of analytical expertise, CompuMark™ is uniquely placed to track this journey and to tell the story of Chinese brands on the world stage. It’s quite a story.

Robert ReadingDirector, Custom & Managed SolutionsCompuMarkMay 2018

1. The Chinese Trademark Office started accepting multi-class applications from 1st May 2014, but the vast majority of applications are filed covering just a single class (98.6% of all applications in 2017).

2. 113,670 EUTM applications were filed in 2016.3. SAEGIS® – 62.6 million active records, 186 trademark registers, over 200 countries.


For over 20 years, the Chinese trademark register has seen more trademark applications filed annually than any other register in the world. With over 1.4 billion consumers, the Chinese market is seen as a key target for international brands.

Although mainland China has just under 19% of the world’s population, the Chinese trademark register has seen over 50% of all trademark applications filed globally in recent years. And the proportion of global trademark applications filed in mainland China is still growing.

BACKGROUND

The Chinese trademark register has seen over 50% of all trademark applications filed globally in recent years.


2016

2016

2017

2017

18.8% 18.7%

53.9% 59.6%

Figure 1 : Chinese population as a proportion of the world population

Figure 2 : Trademark applications in mainland China as a proportion of global trademark applications


1 : Chinese Applicants – Foreign Trademark Applications


When CompuMark™ last looked at the Chinese trademark sector in 2014, foreign trademark applications filed by Chinese applicants outside of mainland China were relatively modest.

Growth was steady but not spectacular (14% in 2013 compared with 2012), and mainland China ranked 10th in the world4 with the USA, Germany, UK, Italy and France making up the Top Five for filing foreign trademark applications.

4. WIPO Statistical Country Profile for China http://www.wipo.int/ipstats/en/statistics/country_profile/profile.jsp?code=CN

In 2017, mainland China ranked second in the world with the US, Hong Kong, Germany and UK making up the top five.

ANNUAL FILING VOLUME SINCE 2012


Figure 3 : Chinese applicants — foreign trademark applications 2012 – 2017

NU

MB

ER O

F AP

PLIC

ATIO

NS

140,000

120,000

100,000

80,000

60,000

40,000

20,000

-

FILING VOLUME

2012 2017201620152013 2014

The picture since 2014 has changed. Chinese applicants are now filing in significant numbers around the world, and in 2017 filed nearly 120,000 foreign trademark applications, with the number of foreign applications almost doubling in the last two years.

38,64144,014

62,519

88,242

50,408

115,444


The key registers for Chinese applicants filing trademark applications on registers outside of mainland China have traditionally been close neighbors of mainland China in South East Asia, together with the US and Europe.

Since 2014, the US has become the major market for Chinese brands, with US trademark applications growing almost exponentially from just over 6,200 in 2014 to over 50,000 in 2017. Europe (especially the EUIPO register) has moved into second position.

Since 2014 the US has become the major market for Chinese brands.

KEY REGISTERS


NU

MB

ER O

F AP

PLIC

ATIO

NS

(000

’S)

0.5

2012 2013 2014 2015 2016 20170

1.0

1.5

2.0

3.5

3.0

2.5

4.0

Figure 4 : Chinese applicants — top registers around the world (1 to 5)

NU

MB

ER O

F AP

PLIC

ATIO

NS

(000

’S)

10

2012 2013 2014 2015 2016 20170

20

30

40

50

60 USA

EUIPO

Hong Kong

Taiwan

Japan

South Korea

Malaysia

IR (WIPO)*

UK

Australia

Figure 5 : Chinese applicants — top registers around the world (6 to 10)

* IR (WIPO) - IR refers to an International Registration, filed at the World Intellectual Property Office.


The One Belt and One Road (OBOR)5 initiative is a Chinese project focusing on developing infrastructure and investment with mainland China’s neighbors and key trading partners. Among the regional and non-regional members of the OBOR initiative, Chinese trademark activity in 2016 was highest in South Korea and Australia, both with significant use of the Madrid system. Thailand – via national trademark applications – was also a key filing area.

South Korea

Australia

Thailand

Vietnam

Russia

Philippines

Turkey

Indonesia

Egypt

Saudi Arabia

Kenya

Pakistan

Figure 6 : OBOR trademark applications — Chinese applicants 2016

5001,000

1,5002,000

4,0003,000

3,5002,500

4,5005,000

National IR

5. For more information on OBOR, visit the official website: https://eng.yidaiyilu.gov.cn/

ONE BELT AND ONE ROAD


The recent growth rate in trademark applications from mainland China is higher than ever before. Application numbers increased by more than 40% in 2017 compared with 2016 on a number of major registers: the US register (+61%), Europe (EUIPO +55%), Japan (+73%), United Kingdom (+122%), Australia (+139%) and Canada (+49%):

U.S. Federal

EUTM

Hong Kong

Taiwan

Japan

South Korea

Malaysia

WIPO (IR)

United Kingdom

Australia

India

Thailand

Macao

Canada

Brazil

10,000

20,000

30,000

40,000

50,000

60,000

-20%0% 20%

40%60%

80%100%

120%140%

160%

Figure 7 : Top foreign registers for Chinese applicants — 2016 vs 2017

2016

Annual Growth

2017

GROWTH

NUMBER OF APPLICATIONS


Looking at all trademark applications filed by Chinese applicants outside of mainland China, it is possible to compile a list of the applicants that filed the largest number of foreign trademark applications.

In 2016, Huawei Technologies (Telecommunications) was the leading Chinese brand in terms of foreign trademark applications. Huawei Technologies filed more than 1,800 foreign trademark applications around the world, more than 1,000 applications ahead of the LeEco group of companies in second place.

Some well known Chinese brands do not appear in the list as their trademarks are owned by an offshore holding company: Internet giants Alibaba (722 foreign trademark applications in 2016) and Tencent (345 applications) both use Cayman Islands based holding companies and would otherwise feature in the Top Five entries.

Applicant / Owner

1 Huawei Technologies Ltd2 Le Shi Holdings Ltd3 China Tobacco4 Beijing Xiaoju Technology Ltd5 Geely Holding Group Ltd6 Nextev Ltd 7 Shandong Weifang Tainbow Chemical Ltd8 Baidu Online Network Technology Ltd 9 Sanliuyidu (China) Ltd 10 Shenzhen Meixixi Catering Mananagement Ltd11 Great Wall Motor Company Ltd12 China Ocean Shipping (Group) 13 SZ DJI Technology Ltd 14 Beijing Qilin Hesheng Network Technology Ltd 15 Hangzhou Hikvision Digital Technology Ltd16 Country Garden Estate Development Ltd17 Saic Motor Corporation Ltd18 China International Captial Corporation Ltd19 iCarbonX Ltd 20 Tianjin Lovol Heavy Industry Group Ltd21 CRRC Corporation Ltd22 Beijing Jingdong 360 Du E-Commerce Ltd23 YIWU Prudential Network Technology Ltd24 Reach Best Technology Ltd25 Shanghai Shangmei Cosmetics Ltd

1,878741366311267223222221201198191179175155150144144139139132124121120118109

2016 Applicant / Owner

26 China Resources Snow Breweries Ltd27 Zhejiang Supor Ltd28 Guangdong Alpha Animation and Culture Ltd29 Qingdao Sentury Tire Ltd30 Heilan Home Clothing Ltd31 Sichuan Haidilao Catering Ltd32 Quanjian Science & Tech Development Ltd33 ZTE Corporation 34 Gionee Communication Equipment Ltd35 Anhui Jianghuai Automobile Ltd36 Guilin GES Monk Fruit Corporation37 Zhejiang Junbao Communication Tech Ltd38 BYD Company Ltd39 Xiamen Meitu Network Technology Ltd40 Beijing Wangjiu Electronic Commerce Ltd41 Guangdong Saiman Investment Ltd42 China National Heavy Duty Truck Group Ltd43 Beijing Wangjiu Electronic Commerce Ltd44 CNNC Huayuan Titanium Dioxide Ltd45 East Shineray Holdings Ltd46 Postal Savings Bank of China47 Bestway Inflatables & Material Corp48 China National Petroleum Corp49 UC Mobile Ltd50 China Unionpay Ltd

108106104100

979088877776747372676462585757565554535352

2016

TOP CHINESE APPLICANTS – FOREIGN TRADEMARK APPLICATIONS IN 2016


2 : Country / RegionAnalysis


Looking at foreign trademark applications filed by applicants from mainland China in 2017, the global picture shows three key markets in order of importance:

WHERE DID CHINESE APPLICANTS FILE TRADEMARK APPLICATIONS IN 2017?

Higher Lower

1. USA 2. Europe 3. Countries and registers in

close geographical proximity to mainland China

Figure 8 : Top filers of foreign trademarks — 2017


In 2017, applicants from the United States continued to file more foreign trademark applications outside their domestic market than applicants from other countries/regions around the world. Applicants from mainland China are in second place (up from 10th place in 2014), with applicants from Hong Kong taking third place.

If foreign trademark applications from mainland China continue to grow at their current rate, mainland China is on course to overtake the USA as the world’s leading source of foreign trademark applications by 2020.

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

US

Mainland China

Hong Kong

Germany

UK

Japan

France

Switzerland

South Korea

Italy

Spain

Canada

Australia

Netherlands

Taiwan

National IR

WHERE DID CHINESE APPLICANTS FILE TRADEMARK APPLICATIONS IN 2017?

TOP FILERS OF FOREIGN TRADEMARKS BY OWNER COUNTRY/REGION

Figure 9 : Top filers of foreign trademarks — 2017


YEAR TRADEMARKS

Hong Kong Applicants

2010 32,5972011 44,6262012 60,2672013 73,805 2014 77,7932015 74,918 2016 63,232 2017 76,319

Germany Applicants

2010 67,2832011 73,4532012 70,7022013 68,374 2014 66,7902015 67,395 2016 74,076 2017 54,488

Mainland China Applicants

2010 32,0592011 38,3172012 42,9512013 48,5262014 54,3532015 67,2382016 94,6222017 119,126

United States Applicants

2010 169,7102011 197,8452012 208,9212013 200,459 2014 192,3622015 198,322 2016 188,447 2017 163,357

TOP FILERS OF FOREIGN TRADEMARKS BY OWNER COUNTRY/REGION – TRENDS

Figure 10 : Top filers of foreign trademarks by owner country/region


Japan Applicants

2010 57,8072011 65,2052012 80,5742013 62,1432014 58,2232015 56,8542016 53,1252017 43,234

Korea Applicants

2010 8,1382011 10,8392012 23,3672013 20,5822014 21,1762015 22,9662016 16,9662017 10,416

FranceApplicants

2010 41,2802011 49,0032012 47,9782013 46,7002014 43,5922015 43,9612016 42,4222017 32,884

Taiwan Applicants

2010 8,1382011 10,8392012 23,3672013 20,5822014 21,1762015 22,9662016 16,5272017 10,416

UnitedKingdom

Applicants

2010 44,1182011 50,1632012 53,6922013 55,2432014 54,6832015 54,4712016 54,1252017 43,234

Figure 10 : Top filers of foreign trademarks by owner country/region


The Madrid System – administered by the World Intellectual Property Organisation (WIPO) in Geneva – allows brand owners to file a single trademark application internationally covering over 110 countries. Although mainland China became party to the Madrid Protocol in 1995, Chinese applicants have been reticent to use the International trademark system, preferring to file foreign applications directly with national registries.

In 2017, mainland China remained in fourth place (their 2016 position) among the leading filers of IR applications. While growth has been slower than for foreign trademark applications via national offices, mainland China is likely to overtake France and claim third place in 2018 among users of the International system.

Figure 11 : TOP IR (WIPO) applicants by owner country — 2017

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

US

Germany

France

Mainland China

Switzerla

nd

AustraliaIta

ly

JapanUK

Netherla

nds

RussiaSpain

South Korea

INTERNATIONAL REGISTRATIONS (WIPO) – TOP APPLICANTS BY OWNER COUNTRY


Mainland China was the number one country designated by International Registrations filed at WIPO in 2016, just ahead of the EUIPO register and the USA. Over 22,500 IR applications designated mainland China in 2016, representing an increase of 5% compared with 2015.

Figure 12: Most designated registers — international registrations 2016 vs 2015

25,000

20,000

15,000

10,000

5,000

Mainland China EU US

RussiaJapan

South Korea

Australia

India

Switzerla

nd

Mexico

Singapore

Turkey

Vietnam

Norway UK

Italy

Germany

France

2016 2015

INTERNATIONAL REGISTRATIONS (WIPO) – MOST FREQUENTLY DESIGNATED COUNTRIES


3 : Classification and Industry Analysis


Trademarks around the world are filed using the Nice Classification system, where all physical products are divided into 34 goods classes (Nice Classes 1 to 34), and all services are divided into 11 service classes (Nice Classes 35 to 45).

By examining the most frequently used classes used by Chinese brands when filing foreign trademark applications, it is possible to build a picture of the most important types of products being exported from mainland China.

In 2017, Class 9 was the most frequently used class for foreign trademark applications filed by applicants from mainland China. Class 9 includes electronics and electrical equipment. Chinese applicants filed nearly 30,000 foreign trademark applications in 2017 in Class 9.

The second most frequently used class was Class 25, which covers clothing, footwear and headgear. The three most frequently used classes were all from the goods classes for physical products:

Class 9 – Electronics/electrical equipment (19.9% of all applications)

Class 25 – Clothing/fashion (9.6%)Class 11 – Lighting, heating, cooking,

refrigerating apparatus (5.9%)

NICE CLASS DISTRIBUTION – FOREIGN APPLICATIONS BY CHINESE APPLICANTS

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Figure 13 : Foreign Trademark applications by Chinese applicants in 2017

— Nice Class Count

29COMPUMARK CHINA TR ADEMARK REPORT 2018

CLASS 9

19.9%CLASS 11

5.9%CLASS 25

9.6%

23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45


There is a clear distinction between which classes of trademarks from mainland China are being filed domestically versus globally. While foreign trademark applications from mainland China mainly reflect physical products, the Chinese domestic register shows a higher proportion of service related brands.

Class 9 (electronics and electrical items) accounted for nearly 20% of all trademark “exports” in 2017, but only 6% of Chinese domestic trademark applications in the same period.

Each of the eleven service classes (Nice Classes 35 to 45) appeared at a lower rate on foreign applications than they appeared on the Chinese domestic trademark register.Trademark applications covering agricultural products and food and drink (Classes 29 to 33) were also “exported” at a significantly lower rate than they appear on the domestic register.

Figure 14 : Trademark applications by class. Chinese applicants, domestic vs foreign — 2017

25%

20%

15%

10%

5%

0%

Domestic Foreign

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

CHINESE TRADEMARKS – COMPARING FOREIGN AND DOMESTIC APPLICATIONS


26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45


Construction

CLASSES

6 17 19 37 40

Health

CLASSES

3 5 10 44

Household EquipmentCLASSES

8 11 20 21

Leisure & EducationCLASSES

13 15 16 28 41

Agriculture

CLASSES

29 30 31 32 33 43

Business ServicesCLASSES

35 36

Chemicals

CLASSES

1 2 4

Clothing

CLASSES

14 18 22 23 24 25 26

The Nice Classification system for trademarks can be arranged so that classes that relate to specific industry sectors can be grouped together to allow analysis on an industry level.

Research & TechnologyCLASSES

9 38 42 45

Transport CLASSES

7 12 39

INDUSTRY SECTOR DISTRIBUTION


40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

Research & Technology

Clothing

Household Equipment

Leisure & Education

Transporta

tion

Constructio

n

Business Services

Agricultu

re

Health

Chemicals

Applying this grouping to foreign trademark applications filed from mainland China, the research and technology sector filed the most foreign trademark applications in 2017, followed by the clothing sector, and household equipment. While Class 9 was used far more frequently than other classes, once the other industry related classes are considered, the gap between the two leading industry sectors is relatively small.

Figure 15 : Foreign trademark applications by Chinese applicants in 2017 — by industry sector


The top three industry sectors for Chinese applicants filing overseas in 2017 have also been the three fastest growing industry sectors in recent years in terms of trademark application numbers.

Since 2013, foreign trademark applications from the research and technology, clothing, and household equipment sectors have been growing at 30% to 40% per year; in contrast the construction sector and the chemicals sector have seen very little growth since 2013 suggesting differences between the ease of export and access to external markets between industry sectors.

The research and technology, clothing, and household equipment sectors have been growing at 30% to 40% per year.

INDUSTRY SECTOR GROWTH – FOREIGN TRADEMARK APPLICATIONS 2012 TO 2017

COMPUMARK CHINA TR ADEMARK REPORT 2018 35N

UM

BER

OF

APPL

ICAT

ION

S (0

00’S

)

5

2012 2013 2014 2015 2016 20170

10

15

20

35

30

25

40

Figure 16 : Chinese foreign trademark applications by industry sector 2012-2017

Research & Technology

Clothing

Household Equipment

Transport

Health

Business Services

Agriculture

Construction

Chemicals

Leisure & Education


Using the Nice Classification split between physical goods (Class 1 to 34) and services (Classes 35 to 45), it is possible to make a comparison of the ratio between trademark applications for goods and for services on trademark registers.

Although service classes are less than 25% of the overall number of classes available (11 out of 45), around the world 40% of all trademark applications in 2017 were for services.

On the Chinese domestic register, the proportion of applications for services was just over 30% in 2017, lower than the global average. This suggests that the Chinese economy is predominantly based on physical goods rather than services.

When Chinese brand owners filed foreign trademark applications in 2017, the difference was even stronger. Less than 20% of the applications were for services, indicating that mainland China’s exports are mostly physical goods. Chinese service related brands are not yet exporting in significant numbers.

Less than 20% of the applications were for services, indicating that mainland China’s exports are mostly physical goods.

NICE CLASS DISTRIBUTION 2017 – GOODS VERSUS SERVICES


GLOBAL

All trademark registers around the world

Mainland China trademark register

DOMESTIC

Foreign applications filed by Chinese applicants

FOREIGN

Goods

Services

40% 60% 32% 68%

16% 84%

Figure 17 : Goods vs services 2017


4 : Mainland China by Region


Guangdong Province (Shenzhen and Guangzhou) dominates foreign applications by mainland Chinese applicants – nearly half of all foreign trademark applications in 2016 (46.7%) were filed by applicants using an address in Guangdong Province.

Zhejiang Province (Hangzhou and Ningbo) was the second largest source of foreign trademark applications in 2016, with 11.8% of all foreign applications filed by Mainland Chinese applicants. Beijing Municipality was third, with Shanghai Municipality fourth.

SOURCE OF FOREIGN TRADEMARK APPLICATIONS BY MAINLAND CHINESE APPLICANTS

Jiangsu 2,554 3.9%

Fujian 2,479 3.8%

Tianjin 1,375 2.1%

Sichuan 937 1.4%

Hunan 800 1.2%

Anhui 758 1.2%

Henan 758 1.2%

Hebei 738 1.1%

Hubei 691 1.1%

Jiangxi 569 0.9%

Chongqing 496 0.8%

Jilin 325 0.5%

Liaoning 316 0.5%

Guangxi 269 0.4%

Shanxi 235 0.4%

Yunnan 188 0.3%

Shaanxi 155 0.2%

Heilongjiang 132 0.2%

Inner Mongolia 100 0.2%

Guizhou 81 0.1%

Hainan 75 0.1%

Gansu 67 0.1%

Tibet 40 0.1%

Xinjiang 36 0.1%

Ningxia 16 0.0%

Qinghai 10 0.0%


1. GUANGDONG

30,36046.7%

2. ZHEJIANG

7,68811.8%

3. BEIJING

5,7288.8%

4. SHANGHAI

4,0336.2%

5. SHANDONG

2,9394.5%

Figure 18 : Top 5 sources of foreign trademark applications 2016

1

2

3

4

5


5 : Trademarks Around the World


Mainland China continued to be the fastest growing major trademark register in 2017, with growth of nearly 50% compared with 2016 filing numbers. The UK also saw signif-icant growth in 2017, due to the uncertainty of “Brexit” for brand protection in the UK.

The strong growth in the number of applications filed on the Chinese trademark register in 2017 was partly driven by a significant reduction in the cost of filing a domestic trademark application in mainland China in April 2017.

ANNUAL GROWTH OF MAJOR TRADEMARK REGISTERS

-20%-10% 0% 10%

20%30%

40%50%

Mainland China

United Kingdom

Japan

U.S. Federal

Mexico

Brazil

Turkey

Taiwan

EU trade marks

Germany

France

Argentina

South Korea

India

2016

2017

Figure 19 : Annual growth in application numbers — major registers


Figure 20 : Monthly filing volume — Mainland China and India

600,000

500,000

400,000

300,000

200,000

100,000

0

Jan ‘16

Feb ‘16

Mar ‘16

Apr ‘16

May ‘16

Jun ‘16

Jul ‘16

Aug ‘16

Sep ‘16

Oct ‘16

Nov ‘16

Dec ‘16

Jan ‘17

Feb ‘17

MAR ‘17

Apr ‘17

May ‘17

Jun ‘17

Jul ‘17

Aug ‘17

Sep ‘17

30,000

25,000

20,000

15,000

10,000

5,000

0

Jan ‘16

Feb ‘16

Mar ‘16

Apr ‘16

May ‘16

Jun ‘16

Jul ‘16

Aug ‘16

Sep ‘16

Oct ‘16

Nov ‘16

Dec ‘16

Jan ‘17

Feb ‘17

MAR ‘17

Apr ‘17

May ‘17

Jun ‘17

Jul ‘17

Aug ‘17

Sep ‘17

MONTHLY FILING VOLUME

-16% India

+74% Mainland ChinaMONTHLY FILING VOLUME

This is in contrast to the Indian trademark register which saw a significant decline in filing numbers over the same period, after the official fee was increased significantly in March 2017.


Mainland China continues to dominate world trademark filing numbers, with the Chinese register accepting more than 5 million new applications in 2017. The USA and India fill the next two positions, but neither of these registers are growing at the same rate as the Chinese register. Among Asian registers, Japan and South Korea also made the Top 10 in 2017.

Mainland China was the world’s largest trademark register for new applications in 2017, with more than 12 times as many applications than the second placed US register, and nearly 20 times as many applications than India in third place.

Mainland China continues to dominate world trademark filing numbers, with the Chinese register accepting more than 5 million new applications in 2017.

LARGEST REGISTERS BY ANNUAL FILING VOLUME


Figure 21 : Annual trademark applications — top registers by filing volume

NU

MB

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F AP

PLIC

ATIO

NS

(MIL

LIO

NS)

8

7

6

5

4

3

2

1

0

MAINLAND CHINA1,581,533 1,785,355 2,090,957 2,629,170 3,603,746 5,270,801

US300,060 309,986 327,879 358,951 377,406 425,791

INDIA191,678 202,491 216,449 275,395 296,324 263,732

BRAZIL109,102 161,496 154,157 156,860 161,912 177,005

JAPAN106,931 103,601 111,355 130,882 147,679 173,331

SOUTH KOREA128,709 135,992 142,609 163,131 162,381 160,758

MEXICO101,306 104,330 109,039 118,681 126,034 138,403

EUTM81,953 85,401 92,349

105,280 113,670 118,762

ARGENTINA80,478 80,047 76,579 89,692

101,139 102,643

TURKEY91,216 87,910 91,861 93,293 92,541 99,668

FRANCE81,947 84,307 87,207 91,575 88,329 90,299

TAIWAN65,409 66,421 74,743 78,830 79,489 83,279

UK36,723 46,317 51,037 54,282 61,636 75,010

GERMANY44,700 44,900 49,540 69,035 68,910 71,561

20122013 2014 2015 2016 2017

20122013 2014 2015 2016 2017

20122013 2014 2015 2016 2017

2012 2017201620152013 2014

Mainland China

Rest of the World


Figure 22 : Top trademark registers — annual filing volume

MAINL AND CHINA

USA

MEXICO

EUTM

ARGENTINA

BRAZIL

JAPAN

SOUTH KOREA

UNITED KINGDOM

INDIA

TURKEY

FR ANCE

GERMANY

TAIWAN

Even adjusting for population – mainland China is the world’s most populous country – the Chinese register led the world in 2017, with more than 3,500 trademark applications filed per one million people, ahead of the Taiwanese trademark register and South Korea:

Mainland China was the world’s largest trademark register for new applications in 2017, with more than 12 times as many applications than the second placed US register, and nearly 20 times as many applications than India in third place.

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0

Mainland ChinaUSA

IndiaBra

zil

Japan

Argentina

MexicoEUTM

South Korea

Turkey

United Kingdom

France

Taiwan

Germany

Figure 23 : Top trademark registers 2017 — trademark applications per million population

= 400 Applications


The one measure where mainland China still lags behind other major trademark registers is GDP per trademark application (in $US million). This is an indicator of the relative economic value of each application. On this measure, the German

trademark register led the world in 2017, with GDP per trademark application of $US 47.8M. The USA was second at $US 45.6M per trademark application. Mainland China was in last place among major registers, with GDP per trademark application of $US 2.2M.

Figure 24 : Top trademark registers 2017 — GDP per trademark application ($US thousand)

60,000

50,000

40,000

30,000

20,000

10,000

Germany

USA UKJapan

France

Mexico

South Korea

IndiaBra

zil

Taiwan

Argentina

Mainland China

SOURCE: International Monetary Fund April 2017 forecast http://www.imf.org/external/pubs/ft/weo/2017/01/weodata/weorept.aspx


6 : Success Rates


CompuMark™ uses a metric called the CompuMark Success Index to measure the registration vs failure rate of trademark applications. The CompuMark Success Index indicates how many applications are registered for each unsuccessful application; the higher the score, the better the success rate. Applications to register a trademark can be expensive investments for brand owners, so maximizing the chance of an application leading to a registration is a valuable strategy.

Chinese applicants filing trademark applications on major trademark registers in 2016 achieved a CompuMark Success Index that was significantly higher than the register average in each major register. In the EUIPO, Japanese and UK registers, Chinese applicants were two to three times more successful in having applications reach registration than the market average.

This success is likely to be due to the distinctive and relatively unique nature of the marks being applied for – particularly if they use Chinese words or Chinese characters – which means they are unlikely to conflict with existing rights already on the register. However, as more Chinese marks reach foreign registers the likelihood of conflict will undoubtedly increase, and success rates may fall as a result.

COMPUMARK SUCCESS INDEX – SUCCESS RATE ACHIEVED BY CHINESE APPLICANTS


COMPUMARK SUCCESS INDEX

30

25

20

15

10

5

0

US EU AustraliaJapan Korea UK

Chinese applicants

All applicants

CompuMark Success Index = Registration Rate / Failure Rate

Figure 25 : CompuMark Success Index — 2016 applications


Do your homeworkGlobal brand owners usually screen (simple online checks) and search potential marks before they file applications to avoid expensive mistakes.

They check for existing records on each register that might stop them using their mark locally – existing marks that are too close will act as a block.

Understand the local rulesWestern registers have different rules.The USA has special requirements regarding proof of use. These requirements are quite specific, and the United States Patent and Trademark Office has recently announced a pilot scheme to target fraudulent specimens of use. The EU and UK Trademark Offices do not require proof of use, but a mark may be cancelled after five years if someone challenges it and you can’t prove that it is in commercial use.

Some registers will reject an application if it is too close to existing marks on the register (e.g. USA); other registers will not check for similar records and rely on other owners to file an opposition. It is important to be aware of deadlines for responding to examination reports and oppositions.

Protect your brandSome registers (e.g. USA) will stop other applicants from registering marks that are too close to your brand.

Other registers (e.g. EU, UK) will NOT stop other applicants from registering marks that are too close – you need to constantly check for possibly infringing applications and file an opposition if necessary to stop them. The best way to do this is to have a trademark watch service – this will automatically tell you if someone tries to file an application that is too similar to your brand.

Get local helpEven before filing an application, try to find a law firm in each country who can help you if you have a problem. If a problem happens, often the deadline for responding is very short and if you don’t know someone locally who can help, you might not have time.

Consider using the international (WIPO – Madrid Protocol) systemMany international brand owners use the International (WIPO – Madrid Protocol) system. The Madrid Protocol International system has a number of very important advantages:

• Very cost effective – no law firm fees for filing

• Simple administration – one form can cover over 100 countries

• The international system is quick as it requires countries to meet rules about examination times; if an application is not examined quickly it can become registered automatically.

TRADEMARK BEST PRACTICES – FILING INTERNATIONALLY


NATIONAL

115,469

WIPO-IR

3,563

While filing through the Madrid Protocol international system has a number of advantages, less than 3% of foreign trademark applications filed by

Chinese applicants were filed via WIPO.

Figure 26 : Foreign trademark applications filed by Chinese applicants — 2017


7 : Best Practices From Mainland China


How do you decide in which jurisdictions to protect your brands?

COFCO: We will select target overseas countries/regions based on our strategic operation plan and the local policies relating to intellectual property rights in these countries/regions. Generally, in addition to the areas in which our businesses operate, some other areas of strategic significance will also be selected.

BEIQI FOTON: In terms of trademark protection, we have always stressed that “trademark registration comes before product selling.” For a new brand, we will first of all list the countries to file the trademark according to the product plan and anticipated market demand proposed by our business department, and then we will investigate the trademark’s availability in the listed overseas countries to confirm the risks of conflict. In this way, we will decide whether the name is available and in which countries we will register it.

How do you advise on strategies for filing trademarks overseas?

WANHUIDA PEKSUNG: We recommend that trademark applicants consider the following:

• The trademark requirements in the countries where the products will be exported, the classification and specifications of the products per se, and the company’s competitive strength are all crucial in making a well-targeted registration plan

• Trademark registration should be obtained locally before exporting the products to that country. Since the registration requirements vary from country to country, filing strategies may need to be adjusted to meet local requirements

• A comprehensive plan should be developed by considering the representation and language of the trademark, the goods/services, and the sequence of filing in different countries and regions

• The registration is advised to cover the goods per se as well as the services relating to the goods, which is effective to protect against squatting

• The name and address of the applicant should be consistent or else its own prior registration or application may cited as an obstacle to a later application, incurring unnecessary expenditure to reply to the refusal

• Take advantage of regional trademark registration systems such as the EUTM, the Madrid/IR system, OAPI and ARIPO in Africa to control the budget

• Carefully select the timing for registration and utilize prior rights if they exist. Familiarise yourself with the provisions of international or regional treaties, agreements, laws and regulations, combine them with your own practice and file your trademark application overseas without delay

To better understand how Chinese brand owners approach filing foreign trademark applications and managing a global portfolio, CompuMark™ spoke with Mr. Haifeng Qian, General Counsel & Director at Beiqi Foton Motor Co. Ltd., Mr. Hui Huang, Senior Partner and Ms. Jianping Li, Trademark Consultant at Wanhuida Peksung IP Group, and Mr. Bing Zhu, General Manager (Legal Department) at China National Cereals, Oils and Foodstuffs Corporation (COFCO).

BEST PRACTICES FROM MAINLAND CHINA

Bing ZhuHaifeng Qian Hui Huang Jianping Li


How do you research trademark availability when filing outside China?

BEIQI FOTON: Before 2013, we entrusted trademark agents and/or law firms within each specific country to investigate trademark availability. However, since 2014, we have used the SAEGIS® global database to locate potential conflicts and to clear new trademarks around the world, which has significantly shortened our screening time and saved our costs.

What difference do you see when filing overseas compared to in China?

BEIQI FOTON: When filling overseas, each country has its differences compared to China in terms of legal environment, cost and efficiency. Firstly, the cost of overseas trademark filling can be relatively high. Before a brand hits the market, its global trademark registration arrangements require a significant investment, and if there are subsequent objections or lawsuits, the cost can be higher. Secondly, the time for trademark authorization in overseas countries is quite long.

Some countries have low inspection efficiency so that it may take seven to eight years to get the certificate. If there is lawsuit or some other complexities, the time of filling is more unpredictable. Thirdly, the inspection procedures vary from one country to another. In China, substantive review for trademark filling is employed, while in other countries (EU for example), formal review is adopted which indicates that the trademark will be registered three months after publication without any objections, and this means global trademark monitoring is particularly important.

WANHUIDA PEKSUNG: Apart from an array of differences in costs, examination periods and grounds, there are also significant procedural differences. For instance, it is not unusual that evidence of use or a statement of use is required to be filed in order to obtain registration, and the voluntary submission of trademark use is mandatory even after the registration of trademark in many jurisdictions. Such practice requires that the registration of a trademark is only sustained by voluntary and continuous filing of evidence of use or statement of use.

It is rather common practice in China to file a trademark in respect of as many similar subgroups under one class in order to maximize its scope of protection. The use of such practice in outbound trademark applications may risk the application being rejected in some countries/regions (such as Hong Kong, Japan and South Korea), where in the absence of a partial rejection mechanism, the overlapping of or conflict between some goods or services may result in total refusal of the application. In such circumstance, the applicant needs to choose wisely and precisely which goods or services he chooses to seek for the protection of his trademark. Moreover, it would be advisable to run a rough check on one’s own overseas trademark portfolio to avoid filings being obstructed by and refused on the basis of an own prior mark.


What challenges do you see when filing trademarks overseas?

COFCO: Countries in different geographic locations often have differences in legal systems and languages, and as a result, we feel it is best to work with local agencies, which has significant negative impact on efficiency as it is after all a kind of indirect communication.

Do you use the WIPO Madrid International Registration system? If so, why? If not, why?

BEIQI FOTON: We usually register international trademarks through Madrid system, because it’s very convenient. Under this system, one filling can be applied in more than 100 countries. The Madrid system also has time and cost benefits after registration with simplified processes for owner changes and renewal.

COFCO: We use the Madrid system in our overseas filing, but also file national applications. The decision on which registration system to use is primarily made according to the actual needs of our business. National applications are the only option in countries which are not part of the Madrid system.

How do you select partners to help with your overseas filings?

BEIQI FOTON: Generally, we choose our partners based on considerations of professionalism, experience, promptness of feedback and effectiveness of problem solving.

COFCO: We generally select our partners based on the following factors:

1. Their clients, which can be a useful indication of their capabilities and reputation

2. Their position in industry rankings and the honors they have gained

3. Their experience and size – experience and stability are very important

WANHUIDA PEKSUNG: When selecting partners, we adhere to the principle of “reliable + efficient.” Commission fees will be considered but it’s not the decisive factor. We care more about the partner’s professionalism and credibility. More specifically, the partner selection can be categorized into easy cases and complicated cases. For straightforward cases, we will search for agencies which can offer reasonable price, quick feedback and fair quality. Overseas agencies can be found from INTA membership list. We will review the firm’s website to understand its date of establishment, the scale and scope of

business and its domestic ranking. In addition, information about the agencies can also be found in professional activities and on professional media platforms. For complicated cases, we normally choose well-known law firms with a good reputation. After the strict inspection of the law firm’s history, its international reputation and agent’s working experience, we will have a careful preliminary communication with the law firm on the case and then make the best choice according to specific situations.


Mainland China has featured prominently on the radar of global brand owners for a number of years, with its allure as the world’s largest single market and over 1.3 billion consumers each with growing purchasing power and relatively untapped access to global markets.

While the primary focus within mainland China has been to build a strong domestic trademark register – with unrivalled success in terms of filing numbers – Chinese brands are now looking outward. Chinese brand owners need to develop a strategy when building a global brand, including how to overcome the challenges posed by different

trademark registers around the world, how to build a network of partners around the world, and how to protect and enforce their brand once it is registered.

If recent trends continue, trademark registers outside of mainland China – particularly in the US and Europe – are likely to see Chinese applicants playing a significant role in their markets, with the very real possibility that these registers could look very different in terms of their make-up and volume within the next four-year cycle.

CONCLUSION


CompuMark™, a business unit of Clarivate Analytics, enables trademark professionals worldwide to launch, expand and protect strong brands through unmatched global content, expert analysis and tools, and best-in-class service.

We are devoted to helping IP professionals – both in-house and law firm counsel – meet the challenges of brand creation and protection in today’s rapidly evolving, global, digital landscape.

We provide the entire clearance and protection process – with the added advantage of choice – including SAEGIS® – a self-service screening tool to narrow down the choice of a trademark; TM go 365 ™ – a self-service clearance tool that enables you to finalize the choice of a trademark yourself; and the analyst-driven Full Availability Search, the industry’s gold standard for finalizing the choice of a trademark.

SAEGIS® on SERION®

TM go 365TMFull Availability

SearchWatch on SERION ®

Global online “knock-out” search

Innovative, self-serviceclearance solution

The gold standard trademark clearance search

Protection trusted by the world’s most valuable brands

SCREENING CLEARANCE PROTECTION

Self-Service Solutions Analyst Solutions

COMPUMARK – HELPING BRAND OWNERS GO GLOBAL


Trademark ScreeningIs your proposed trademark unique? In today’s global marketplace, potential conflicts could be lurking in jurisdictions around the world. Eliminating these marks early in the clearance process with a “knock-out” search saves time and money, allowing you to focus resources on the most promising candidates. The solution is SAEGIS® on SERION®, which provides instant access to 186 trademark registers covering over 200 countries and over 70 million trademark records.

Trademark ClearanceTM go 365™ Why take chances trying to clear important brands using web searches or inaccurate online tools? CompuMark™ has a better solution: TM go 365™. It’s the ultimate self-service clearance solution that gives you the power to search word and image trademarks instantly and globally, without compromising quality. So you can minimize brand risk while keeping pace with the digital economy.

TM go 365™ combines our deep trademark search expertise with advanced machine learning and image recognition technology to deliver results you can count on to make critical brand decisions, quickly and cost-effectively.

Full Availability SearchWith hundreds of thousands of new brands entering the global marketplace annually, the risk of infringement has never been greater. Performing a thorough search of any new trademark, business name or domain name is essential to reduce the risk of a conflict that could cost millions in litigation costs, delayed market entry and lost marketing investments.

Our Full Availability Search is the solution. Performed by our expert Search Analysts, it’s the industry gold standard, providing unparalleled coverage and quality to give you the certainty to make trademark investments with confidence.

Trademark Watching Rising global trademark filings. Proliferating online and offline channels. Exploding social media and web content. Valuable brands are more vulnerable to infringement than ever before. CompuMark™ helps you meet the challenge with the broadest, most reliable global watch coverage and the most efficient watch management tools.

Custom & Managed SolutionsSome trademark challenges just don’t fit existing services. That’s where our Custom & Managed Solutions come in. Our trusted and experienced team develops innovative, practical solutions tailored to your precise needs. From complex project management to trademark data analytics for competitive and business intelligence needs. No matter what the challenge, we’re committed to a single mission: achieving your trademark research, clearance and protection goals.

The Next Generation of Trademark Research and Protection SolutionsThe trademark landscape is always evolving—and so is CompuMark™. We are continually developing innovative new solutions, leveraging advanced technologies and our global expertise to help our customers meet whatever challenges come their way.


ABOUT COMPUMARKCompuMark ™ is the industry leader in trademark research and protection solutions. We enable trademark and brand professionals worldwide to launch, expand and protect strong brands through the highest quality global content; expert analysis; superior trademark screening, search, and watch tools; and best-in-class service. Key products include: SAEGIS® Trademark Screening Tools; TM go 365 ™ DIY Clearance Solution; Trademark Full Search; Trademark Watching; Copyright Searches; and Custom Solutions.

To learn more about how CompuMark ™ can help with your trademark search and protection needs, visit us at compumark.com

To contact CompuMark™ regarding the information in this report, or for general enquiries, please visit compumark.com/contact-us/

ABOUT CLARIVATE ANALYTICSClarivate Analytics is the global leader in providing trusted insights and analytics to accelerate the pace of innovation. Building on a heritage going back more than a century and a half, we have built some of the most trusted brands across the innovation lifecycle, including CompuMark, Web of Science, Cortellis, Derwent, MarkMonitor and Techstreet. Today, Clarivate Analytics is a new and independent company on a bold entrepreneurial mission to help our clients radically reduce the time from new ideas to life-changing innovations.

For more information, please visit clarivate.com

AMERICASMain office (USA) : +1 (800) 692 [email protected]

CANADA +1 (800) 561 [email protected]

EMEAMain office (Belgium) : + 32 2 200 89 [email protected]

UK+44 020 3564 [email protected]

FRANCE +33 01 57 32 47 [email protected]

ITALY +39 02 23 33 [email protected]

GERMANY +49 69 153 253 [email protected]

ASIAJapan: +81 03 [email protected]

CHINA+86 [email protected]

AUSTRALASIA+61 2 8587 [email protected]

Clarivate and its logo as well as CompuMark™, SAEGIS®, SERION® and TM go365™ are trademarks of the Clarivate Analytics group. All other trademarks used herein are the property of their respective owners.

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