5 Feb 2016
Protection of Intellectual Property Rights: Trademark Registration
Management of intellectual property rights is an important starting point for brand management. It involves using legal safeguards to prevent right infringement. Ultimately this helps protect the profitability of the enterprise.
- Trademark registration in Hong Kong: Trademark registration is subject to regional limitations. However, trademark registration in Hong Kong has a number of features that make its protection measures internationally effective.
- Blocking of rights infringement: Every year Hong Kong organises a number of internationally renowned trade exhibitions during which the latest products are displayed. If the trademark, design or other patents of these products are registered in Hong Kong beforehand, they will enjoy legal protection during the period of the exhibition, infringement activities will be blocked from the source, and fake products will not have any chance of being shown to buyers. The owner of the intellectual property rights can consider himself as having won a battle in the war against infringement.
- Sound legal system: Hong Kong has a sound legal system under which deterrent and other actions can be taken against infringement. If and when a property rights owner finds that his rights are being infringed, he can take the following actions through Hong Kong lawyers:
- International network: Hong Kong has built up extensive contact and information networks through years of experience in international trade. This can help mainland enterprises in obtaining licences from international brands and managing their intellectual property rights. Even the external aspects of intellectual property rights registration in the mainland are best handled by Hong Kong organisations. The charges for such services are relatively high.
- Help winning more orders: Foreign buyers have greater confidence in Hong Kong’s legal system and the way things are done in Hong Kong. Under Hong Kong’s legal system, they feel that they are in better control of the situation. They are more comfortable placing orders with companies, brands and products registered in Hong Kong.
- Tax incentives: Hong Kong attaches great importance to intellectual property rights, and provides the following tax incentives for the following related commercial activities:
(1) Intellectual property rights items can be included in the fixed assets of limited companies incorporated in Hong Kong. According to Hong Kong laws, profits from the sale and purchase of fixed assets are not subject to profits tax.
(2) To encourage innovation and invention, Hong Kong provides tax incentives for the following expenses:
- Research and development expenses;
- Tools, machinery and equipment for research and development purposes; and
- Expenses incurred in registration of trademark, design and other patents of the products.
- Strategy in trademark registration: In trademark registration, the principle of one trademark and one application for one category of product is internationally adopted. This has made registration the most expensive part of the brand development process. Under such a system there is the potential problem of the brand being pre-empted, or pre-registered, by others for the product category. To prevent this problem from occurring, companies can adopt the following strategy:
- Same category: A company whose main product is watches should apply for trademark registration for jewellery at the same time, to prevent other companies using its trademark for other products in the same category. Watches and jewellery belong to different sub-categories of the same category.
- Related category: A company whose main product is cooking utensils (such as pots, forks and spoons) should normally have already registered for Category 21. However, Category 21 does not cover electrical cooking utensils. It is advisable for the company to also register for Category 11 covering electrical cooking utensils and electric kettles.
- Planned category: If a company has plans to develop products of other categories in addition to its main product, it should also register for the categories being planned. For example, a watch trader may also register for Category 16 (pens) and Category 25 (garments).
HKTDC Tips (on intellectual property rights)
- Solutions for SMEs: more effective use of capital
- Incremental registration: Begin by registering the trademark in a region where the cost involved is relatively low. After testing the demand of the market for the product, work out the strategy for developing the market and the product categories, and set out the order for development. Based on the priorities thus set out, apply for trademark registration one by one in an orderly manner.
(1) Hand drawings
(2) First editions
(3) Technical drawings
- Make good use of Hong Kong legal services
- Employ professional lawyers: Their strengths include the following:
(1) They have a good understanding of international procedures for registering intellectual property rights and evaluating such applications.
(2) They can draft licensing agreements that are effective in helping the brand owner monitor the licensee, and fair to the interests of both parties.
(3) In the event of infringement, they have good knowledge of the litigation requirements and can take action for the brand owner.
(4) For mainland enterprises, they can develop brand strategies and provide consultancy and agency services.
- Intermediary service organisations: These intermediary organisations are engaged mainly in handling registration of intellectual property rights for their clients. Their services cover other countries and regions as well as Hong Kong. They do not only provide advice to clients but can also take up operational matters related to registration. Quite a number of small and medium-sized law firms handle registration matters for their clients through these intermediary organisations.
- Support of the Hong Kong Special Administrative Region Government:
In order to promote awareness of intellectual property rights, many Government departments in Hong Kong provide advisory services and even assistance in this area. These include the Intellectual Property Department and the Hong Kong Productivity Council. However, Government departments provide services mainly to companies incorporated in Hong Kong.