Originally posted 2014-08-08 11:00:31.

By Diana Chan | amdlawgroup.com

TM Squatter

Because of the sheer number of people (and potential consumers), businesses are often drawn to the idea of expanding their brand and marketing their products in China. But businesses should be wary when taking their brand to China especially if they have not yet registered their trademark in China.

Several big name companies such as Apple, Pfizer, Hermès, Burberry and more recently, Tesla, have struggled to successfully win trademark disputes in China. China, unlike the United States, follows a “first to file” system. Recently, the car manufacturer, Tesla, has encountered several issues because someone else, Zhan Baosheng, had registered the name in China before Tesla.  Zhan had wanted Tesla to halt all sales and marketing in China and to pay him $3.9 million although Tesla now reportedly claims that it has come to a resolution with Zhan over the Tesla trademark dispute.  In the past, Apple was involved in a trademark dispute over the iPad trademark with Proview International Holdings Ltd., a company that applied to block local shipments of the tablet.  After two years, Apple paid $60 million to settle the dispute. Hermès is another example of a well-known company battling to protect its brand.  Although Hermès had registered “Hermès” in 1977 and thereafter had been using 爱马仕(“Ai Ma Shi”), the Chinese language version of Hermès, it failed to immediately register “Ai Ma Shi” as a trademark in China. Instead, another company, Dafeng Garment Factory, had registered a similar sounding “Ai Ma Shi” in 1995. Since then, Hermès has struggled in the fight to cancel Dafeng Garment Factory’s registration of the mark.

Here are just a few of the many factors to consider:

  1. Register the mark or logo before using your mark in China. Marketing and selling products that bear a brand without trademark registration in China is risky. Since China runs on a first to file system, whoever files the mark first generally gets the rights to use the mark.
  2. If you have a word mark, don’t just trademark the English language version of the mark. Consider the possibility of registering the Chinese translation and phonetic translations.
  3. Remember that if you do successfully register your brand in China, those rights do NOT extend to Hong Kong, Macao, or Taiwan.

If expanding your brand to China is in the future for your business, don’t wait to register your brand as a trademark. Otherwise, someone else could swoop in and register your brand as a trademark—and you could end up tackling trademark disputes that could hurt your brand and leave a hefty financial dent.

Sources:
http://www.saic.gov.cn/sbjenglish/sbcx_1/
http://www.businessinsider.com/r-tesla-resolves-trademark-dispute-in-china-2014-05
http://www.bloomberg.com/news/2014-07-07/tesla-sued-in-china-for-trademark-infringement.html

Image Credit: http://www.uspto.gov/inventors/independent/eye/201302/assets/images/SQUAT_large.jpg

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AMD LAW
www.amdlawgroup.com
(800) 650-1559
contact@amdlawgroup.com

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