Not sure why, but I have been dealing a lot lately with China trademarks. I think it might be because in the last year or so, we have seen an increase in the ratio of our clients seeking to sell product into China as opposed to manufacturing it.
The key to understanding Chinese trademark law is to understand that the first to file for the trademark virtually always gets it. There are some exceptions to this rule and I might win the lottery tomorrow.
U.S. trademark law is based on first use. This roughly means that the first person/company to use a trademark for a particular category of product or service gets it. Most countries, including China, grant their trademark rights based on who files first. This roughly means that if I am using "my" trademark in China for a few years and someone else goes off and registers that same trademark for themselves, they will almost certainly get it. And once they get it, it is theirs and that means they have every right to stop me from using it.
U.S. based manufacturers tend not to think in trademarks because to a large extent they have never had to do so. U.S. based consumer product companies are more focused on brand names and so even though they too can generally (please note the use of the word generally here because there definitely are advantages to filing your trademarks in the United States) able to get away with not filing trademarks in the United States, they do tend to be knowledgeable on the benefits of doing so.
China does have a well known trademark exception to its first to file rule, but since the odds of anyone prevailing on that are so slim and the legal costs so high to even try, it is never a good idea to forsake a filing in reliance on that. Earlier this year, China's Supreme Court issued an explanation of the issues arising in disputes relating to well known marks here [in Chinese only]. In its explanation, the Court defined the term “well known mark” to mean a mark generally known by the public within China. This means the mark must be known to the general public, not to a restricted group of experts, and it also must be well known within China. United States, Europe and elsewhere simply do not count.
Oftentimes when I stress to my clients the necessity of registering their trademarks in China, they respond by asking what the point is when "everyone knows China does not protect intellectual property." To which I always respond by talking about how the protection of copyrighted material (like books and software and movies) in China is bad, but its protection of patents is not all that bad and its protection of trademarks is actually pretty good. Certainly China is rife with trademark violations, but the bottom line is that the enforcement of trademarks in China has gotten pretty good and it is continuing to get better.
For more on trademarks in China, check out "Which Comes First, The China Trademark Or The China OEM Contract?" and "Hey Sucker, We've Got Your China Trademark And Your're Goin' Down."