China is the world’s leading manufacturing market but trademark infringement is the most common problem many foreign companies face over here. It has been noticed that trademark squatting has been a profitable and low-risk activity in China for many years. Under Chinese trademark law, only a registered trademark enjoys protection and the first person or entity to register it becomes its lawful owner, even if that trademark has already been used by others in China. Aware of the very strict “first to file” principle, they identify, apply and register trademarks belonging to competitors who have forgotten or not yet taken steps to register them. That is the primary reason China lawyers advise their clients to give utmost importance to register their trademark in China.
China’s Trademark Law is not Weak–
Many people think that weak Chinese trademark law is responsible for the growing number of infringement incidents, but the reality is China’s trademark law already has a number of provisions to combat squatting. The truth is, when a foreign company comes to conduct business in China, either they don’t take trademark registration seriously or they take wrong steps on battling the trademark infringement legal disputes.
However, the good news is over the last couple of years, several foreign firms especially from the USA have won many trademark infringement cases giving hope to other overseas companies that a tougher line from Beijing is adapted to act swiftly and appropriately to the long-existing trademark squatting practice.
Here is a list of foreign companies won the trademark cases in China:
>> Alfred Dunhill– This year, British luxury label Alfred Dunhill—which specializes in menswear, leather goods, and accessories—won its trademark infringement lawsuit against Chinese brand Danhuoli.
>> New Balance– Boston, MA-based athletic shoe and apparel company New Balance had won a victory in a trademark infringement case in China against three defendants that had used the firm’s signature N logo to sell footwear under the brand name New Boom. A Chinese court has ruled that three domestic shoemakers must pay New Balance $1.5 million in damages. It the is largest trademark infringement award ever granted to a foreign business in China.
>> Michael Jordan– In 2016, China’s supreme court has ruled in favor of US basketball legend Michael Jordan in a trademark dispute.The People’s Supreme Court ruled a Chinese sportswear company must stop using the characters for Jordan’s name, read as Qiaodan in Chinese. In a ruling by the Chinese supreme court, Qiaodan Sports Co, based in south-eastern Fujian province, must stop using the Chinese characters for Qiaodan on its merchandise.
All these verdicts could help set a precedent for foreign companies seeking to protect their intellectual property rights, more legal action is needed for global brands to capture the upper hand in their fight against China’s copycats. According to the trademark lawyers in China, winning a legal dispute regarding your trademark in China is not as overwhelming as it may seem. The only thing foreign companies need to do is to follow the right legal steps at the right time.
The US and the European firms need to keep in mind that doing business in China is an entirely different ball game compared to do business in their home country. China is a communist country with its own sets of rules and regulations for the overseas companies. As a foreign business owner, you simply need to follow the Chinese rule.