Trade Marks vs Enterprise Names In China: What’s The Difference?

29 August, 2016

 

Should I only register my trade mark in China or should I also register my enterprise name? What’s the difference? In today’s blog post we will take a closer look at the difference between SMEs’ enterprise names and their trade marks and give advice on how to adequately protect both in China. 

 

What do trade marks and enterprise names look like?  

 

Both trade marks and enterprise names are commercial marks. They function as signs, through which businesses and their products can be identified by their consumers.

 

Trade marks are used specifically to distinguish commercial products from other products on the market. They come in many varieties, including words, images, colour combinations and sounds.

 

Take the familiar case of an iPhone. Everything from its name to its message tone is trademarked. This prevents other companies from copying the brand, so that consumers can easily identify genuine iPhone products from other products in the sector.

 

On the other hand, an enterprise name is a company’s legally-registered name. ‘Apple inc.’, ‘Starbucks Corporation’, ‘Amazon.com Inc.’- each of these registered enterprise names is owned exclusively by its respective company. No two companies can legally hold the same enterprise name.

 

Again, this enables consumers to distinguish between different market actors, and to tell the genuine from the fake. They will tend to refer to a company using a refined version of its enterprise name, for example ‘Apple inc.’ becomes ‘Apple’, and ‘Starbucks Corporation’ becomes ‘Starbucks’. These shortened, everyday versions are known as a company’s ‘trade name’.

 

How do trade marks and enterprise names help a company’s reputation? 

 

Given that trade marks and enterprise names are the means by which consumers identify companies and their products, both are vital to forming and maintaining any business reputation.

 

In the event that your business does not own these commercial marks, other companies are liable to (and legally justified in) adopting any element of your brand name, packaging, and other distinguishing features.

 

If this happens, consumers will struggle to tell you apart from these competing market forces and could come to judge your brand according to the standards of the latter’s products. It is likely that any copycat company will be producing goods of a lower quality to your own, so this could prove extremely damaging to your business reputation.

 

It is therefore important to protect your brand using both trade marks and enterprise names.

 

Where can I register a trade mark or enterprise name?

 

Trade marks can be registered through the China Trade Mark Office (CTMO), whilst enterprise names can be registered at the State Administration of Industry and Commerce (SAIC).

 

In order to obtain an enterprise name, you can go first to your local Administration of Industry and Commerce. The name will ultimately be approved by the SAIC.

 

Both processes are separate and involve different regulating authorities. As a result, enterprise names will not be checked against existing trade marks, and vice versa.

 

What to watch out for

 

The problem with this is that it can allow businesses of malign intent to coopt the reputations of already-established companies in order to bolster their own profits. Such companies seek to exploit the disconnect between enterprise name and trade mark registration processes by applying for trade marks which are similar to pre-existing and popular enterprise or trade names, and vice versa.

 

In order to prevent this from happening, lots of companies operating in China have begun to take the precaution of registering their enterprise name also as a trade mark, unifying the two and thereby stopping copycat companies from stealing their brand.

 

When doing this, however, it is important to ensure you’ve covered all bases. This is especially true of brand names, as there are multiple ways in which Chinese companies can rework these using Chinese characters. It isn’t always as simple as registering the existing version of your trademark or enterprise name as the other.

 

Consequently, in order to better protect the IP rights, a lot of enterprises filed applications for registering their trade names as their trade marks so as to unify them, thereby obtaining a dual protection of trade name and trade mark. This is a worthwhile strategy of IP right protection.