A hot red sports car that bleeds sex and speed ambles past Tiananmen Square. Perched on the hood is a logo of a horse rearing on two feet. Everyone who has fantasized about buying a dream car knows the name Ferrari and could pick out its horse logo faster than Seabiscuit.

However, China’s 1st Intermediate Court and the Review Board were apparently deprived of such decadent daydreams. Ferrari was unsuccessful when it opposed and later appealed a merchandiser’s registration of the Ferrari horse emblem. Both levels of court ruled that the horse emblem was not a famous trademark warranting protection. Notices by the Supreme Court in recent years have explained that well known trademarks are evaluated on the basis of whether they are well known within China, not worldwide.

In China, the first to file is the one who wins the trademark, unless a contesting party can prove that the trademark is famous or well known. Ferrari could have protected its prancing thoroughbred if it had beaten the enterprising Guangzhou merchandiser to the trademark office. For non-Chinese brands, the lesson to take away is that unless you are at the same level of recognition as Coke or McDonald’s, you are probably not well known in China and you better register your trademark quickly.

In case the foregoing story is not sufficiently compelling to scare you into registering your trademark, consider the following. You are outsourcing production of silk handkerchiefs to China, but are going to sell exclusively in Monaco, France. You do not register because you are not selling anything in China. Just as you are about to start cranking out thousands of silk snot rags, Chinese authorities bust down the door and push that giant red button on the production line. Apparently an 18 year old girl trademarked your handkerchief’s logo of a flower for her website, and happened to register it in the same class as your handkerchief. It is within her rights to stop your commercial use of the flower logo in China.

Thus, the question is not whether you should register your trademark in China, you should, but rather, when is it appropriate. The simple answer is, the earlier the better. Registering one’s trademark is generally not a complex endeavor, but instead is a time consuming one. Understanding the whole process is important when considering whether now is the time to act. The start of the process is very much like it is everywhere else, you submit a mark or a name, or a combination of both, and designate which classes you want to register in. A licensed agent must submit the application, which means you are going to have to find a Chinese law firm to work with or some other middleman with access to a licensed agent. If you have never worked directly with a Chinese law firm or agent before, you should probably get some advice from someone who has, as doing business in different countries always has its quirks.

Once you start asking around, you might hear that your Chinese friend is being charged half of what you are being charged. This is not because your application takes more work (except for a little translation work, which is often very minimal). Instead, it is because you are a foreigner. If you have good Chinese then by all means negotiate, but do not be overly discouraged when you hear that that is just the way it is. Do not get frustrated. Just be happy that China’s trademark laws have developed as quickly and as comprehensively as they have. Intellectual property is one area where China’s laws and enforcement are generally developing with both speed and quality. Furthermore, the registration process is relatively cheap in the first place. Government fees are RMB 1,000 for one mark, and agent fees can be less than RMB 1,000.

Your agent should do a preliminary search for you, which is included in the overall registration price. Barring any hiccups, like your name is already taken or is overly similar to an existing name or mark, your application will be filed in a little over a week. Then you wait about two and a half months, after which the government will contact your agent. The government will tell you whether your mark is in conflict with any existing marks. If you pass this hurdle, then you are in good shape. All you have to do now is wait another 20 months or so. Take a deep breath. The number of trademark registrations in China has increased exponentially in the last couple years. Like in most governments, administrative efficiency is not the China Patent & Trademark Office’s forte. There is an enormous backlog. Accept it, move on.

Once you make it through the two year waiting period, the government then publishes your mark. At this time your mark may be contested. This is the point when Ferrari jumped in. Unless there are legal grounds for the contesting party’s objection, your trademark will be registered in three months. Once your trademark is registered, you are golden. It does not matter if someone used the mark for fifty years before you or if the contesting party’s mark is as famous as David Hasselhoff in Germany.

Registering your trademark is a long process and involves working with an agent, which may be difficult. But, with some patience and perspective, and a bit of luck, you will come out of the process with an iron clad trademark. So remember to start the process early, because like Reese Bobby said in his eternal wisdom, “if you’re not first, you’re last.”