In today's market economy, trademarks, as crucial identifiers distinguishing the source of goods or services, play a pivotal role in market competition and brand building. China implements a trademark registration system, where registered trademarks are comprehensively and robustly protected by law. However, unregistered trademarks are also widely present in commercial activities and play an important role in economic development. In China's intellectual property legal system, the Trademark Law and the Anti-Unfair Competition Law both contain provisions on the protection of unregistered trademarks.

I. Necessity of Protecting Unregistered Trademarks

Unregistered trademarks carry the commercial reputation of enterprises. Many enterprises failed to register their trademarks in a timely manner, due to capital, awareness and other factors in their early stages. However through long-term use and operation, these trademarks have established close associations with the enterprises, gaining a certain level of recognition and goodwill within specific regions or consumer groups. Without legal protection on unregistered marks, malicious preemptive registrations or use by others could damage the goodwill accumulated by the enterprises over the years, rendering their initial investments futile.

The use of unregistered trademarks is also conducive to the maintenance of fair competition in the market order. When an unregistered trademark gains consumer recognition in the market by virtue of its uniqueness and the business efforts of the enterprise, allowing other operators to freely use identical or similar trademarks would not only mislead the consumers, but also weaken the competitive advantage of the user of the unregistered trademark, and cause confusion in the market, thereby violating the fundamental principle of fair competition.

II. Basis for legal protection

(i) Provisions of the Trademark Law

Article 13: Where the trademark of an identical or similar kind of goods is a reproduction, imitation, or translation of another person's well-known trademark not registered in China and is liable to cause public confusion, no application for its registration may be granted and its use shall be prohibited.

This article protects well-known trademarks that have not registered in China, requiring the trademarks have achieved a level of recognition and influence that is familiar to the relevant public.

Article 15: Where an agent or representative, without authorization of the client, seeks to register in its own name the client's trademark and the client objects, the trademark shall not be registered and its use shall be prohibited.
An application for registering a trademark for the same kind of goods, or similar goods shall not be approved if the applied trademark is identical with or similar to an unregistered trademark used in prior by another party, the applicant is clearly aware of the existence of the trademark of such another party due to contractual, business or other relationships with the latter other than those prescribed in the preceding paragraph, and the registration shall be refused if the another party raises an objection.

This article prohibits malicious squatting under special relationships. The first paragraph requires a preexisting agent or representative relationship between the applicant and the rights holder, without requiring the trademark’s use or influence. The second paragraph expands the scope of “special relationships” to include “contractual, business, or other relationships” and adds the condition of “prior use” of the trademark, though it similarly does not require the trademark to have “influence.”

Article 32: An applicant for trademark application may not infringe upon another person's existing prior rights, nor may he, by unfair means, preemptively register a trademark that is already in use by another person and has certain influence.

The latter half of this article protects trademarks that have been used and gained a certain influence, but have not yet reached the level of “well-known”. “Unfair means” refers to situations where the trademark applicant, knowing or should have known of the existence of the prior unregistered trademark, proceeds to register it in bad faith.

Article 59: Where, before a trademark registrant applies for registration of a trademark, another party has used a trademark that is of certain influence and is identical with or similar to the registered trademark on the same kind of goods or similar goods, the holder of the exclusive right to use the registered trademark shall have no right to prohibit the said party from continued use of the trademark within the original scope of use, however, the holder may require the latter to add a proper mark for distinguishing purposes.

This article grants prior users of unregistered trademarks the right to defend their prior use against other’s registered trademarks. The main purpose is to protect the rights and interests of unregistered trademark owners whose marks have already gained influence in the market.

(ii) Relevant Provisions of the Anti-Unfair Competition Law

Article 6: A business entity shall not commit any of the following confusing acts to mislead people into believing that its own goods is another entity's goods or has a certain connection with another entity: (a) Using, without authorization, any mark identical or similar to the name, packaging or decoration, etc. of another business entity’s goods which has certain reputation;

The term “any mark” here includes unregistered trademarks. When an unregistered trademark has acquired market reputation, its owner may rely on this provision to defend its rights if others imitate the trademark and cause confusion among consumers.

III. Conclusion

Although China's trademark registration adheres to the principle of “first to file”, the IP legal system also provides a certain degree of protection to unregistered trademarks that are well-known or have a certain influence.

When enterprises use unregistered trademarks, they should pay attention to brand cultivation and preservation of evidence. In the event of infringement, they shall take up legal weapons in time to defend their legitimate rights and interests. On the other hand, the legal protection of unregistered trademarks is still limited. It requires the trademarks have influence, and the scope of protection is limited to identical or similar goods and the level of protection is far less than that of registered trademarks. Therefore, from a long-term perspective, timely registration of trademarks remains the best choice for enterprises to protect their brands, and provides a more solid guarantee for their commercial development.