Trademarks In China – How Difficult Is It To Protect Intellectual Property?

Trademarks in China are among the many difficult challenges for businesses operating internationally. Chinese intellectual property legislation has been notoriously difficult for Western companies to deal with as we outlined in our previous blog post trade mark registration and brand extension in China

Michael Jordan and his sneaker brand is the latest to be caught in the snare.

A Beijing court has dismissed a trademark opposition brought by Michael Jordan against a company using the name ‘Qiaodan’, which is the Chinese version of Jordan’s name, but also one with a similar pronunciation and uncreative similar logo. The Chinese company had effectively constructed an entire brand based on the Nike-produced brand.

A Reuters’ article reported that a Chinese sportswear company had built around the world-famous basketball player’s Chinese name and even his famous basketball jersey, number “23”, without his permission. However, it seems that the battle is set to continue according to Advertising Age who reported that Michael Jordan’s legal counsel confirmed last week that they plan to file for retrial by November.

Big Names And Their Trademarks In China

Unfortunately, this tends to be quite a common occurrence in China, whose system gives favour to those who are first-to-file, unlike in the USA, where favour is given to those who are first-to-use. In 2012, the tech giant Apple Inc. had to settle a $60 million lawsuit to a Chinese firm, Proview, in order to use the ‘iPad’ name. A steep price for not getting in early, and, recently, one which is set to be even steeper for the new Apple iWatch as we wrote about in our earlier blog post “iWatch Trade mark – Apple In Multimillion Dispute”.

However, Apple was not the only victim with their trademarks in China. Pfizer has not registered the Chinese equivalent for the name ‘Viagra’ which it had trademarked and consequently ended up losing it to a local Chinese company that had claimed ownership over it. Luxury fashion brands Burberry and Hermes have also run into similar problems. The importance of your company’s name has never been as important as it is today.

Our Intellectual Property Advice

Here are some tips when it comes to your trademarks in China or in other parts of the world:

1.     Move Fast

Most people tend to see intellectual property as a burdensome cost at the beginning of an entrepreneurial venture. Whilst it is true that intellectual property registration can be a costly exercise, investing in your intellectual property early will save you thousands, if not millions down the line. This is true especially if you intend to take your brand to ‘first-to-file’ jurisdictions like China. There is no end to those who will try and appropriate from you, make sure they do not appropriate your intellectual property by registering before you do.

2.     Have An Intellectual Property Strategy

Intellectual property is territorial, meaning that where it is registered it is a valid right. It would be expensive and also impractical to be registered in every corner of the world, no matter how ideal that would be. Having a strategy means having the foresight about what your product is, what your brand encompasses, who are those that are likely to invest into your brand and what markets they are operating in. Before you set foot in that territory and gain large exposure, seek to register your company name and branded products so that the foundations for your commercial operations are already set.

3.     Know Your Name

For long, many creative and branding agencies and the like, have been churning out names based on a few online checks. The reality of what is a good name and what can be a valid trademark are two completely separate issues. For example, Pfizer not knowing what the Chinese equivalent name for “Viagra” cost them dearly.

Recently, last April, a New Balance affiliate ordered to cough up $16 million in compensation to a Chinese show manufacturer who had registered the Chinese brand name “Xin Bai Lun.” New Balance knew about the trademark but continued to operate under the impression that there would be no consequences. If you are going to places such as China, undertaking the correct international searches and working with intellectual property lawyers and translators are crucial in this process.

Visit our Trademarks services page to learn more about trademarks. We can help whether you need an international name search, want to know more about registering your trademark overseas, or want to brainstorm a solid IP strategy to leverage your brand and prevent others from using your trademarks in China or in any part of the world.