Anyone with even a remote interest in intellectual property will have observed that, on the same day President Trump whispered into Chinese President Xi Jinping’s ear while eating ‘the most beautiful piece of chocolate cake you’ve ever seen’ to inform him of a missile strike on Syria, the Chinese Government announced that his daughter Ivanka Trump’s trade marks had been preliminarily approved for registration in China.
Such a public announcement is unusual, to say the least, for most applicants for IP rights in China. A Chinese Government spokesman has indicated that there was nothing untoward about this, as ‘we consistently follow the principle of equally protecting legal trade mark rights of trade mark owners of foreign companies and handle the process of relevant trade mark registration in accordance with the law and rules’.
However in our experience this type of public announcement is a somewhat out of the ordinary!
IP practitioners will in any event probably have smiled wryly because, for Ms Trump, the trade mark battle has now only just begun. Trade mark and domain name squatting, attempts to misappropriate brands and their heritage and provenance, are all a daily part of the IP scene for IP rights holders in China.
It is a commonplace business model for the brands, get-up of products and promotional materials, and the genuine websites of well-established companies to be duplicated by Chinese entities, and for the Chinese entity to effectively hold itself out as, or stand in the shoes of, the established company.
It is also common practice for Chinese companies and individuals to establish business models which revolve around filing applications and securing registration for the trade marks of others, and then negotiating the sale of the true owner’s property back to the true owner.
This sort of conduct inevitably leads to the erosion of, or worse, the destruction of the equity in a brand and in a company’s standing in the Chinese market, and a mistrust by consumers as to who is purveying the genuine product.
As a civil law country, the concept of prior user rights and reputation count for little in these circumstances, and well-advised, well-funded (and nimble) Chinese entities can take advantage of the law for financial gain in this way. In order to try and guard against such outcomes, it is imperative that, at the very least, early trade mark registration for both English language and Chinese character versions of key brands is pursued, and that trade mark watching programs are established in respect of key brands. Taking court action for copyright infringement and breach of unfair competition law is also essential in clear cases of misappropriation of heritage, provenance or other proprietary elements of one’s business.
It can often feel like attacks on key brands and the DNA of a business are never ending, and it requires discipline, determination and money, and a preparedness to take action at an administrative level or through the Chinese courts.
A failure to act will inevitably result in the brand being lost and the business’ value being written down.
The problem is exacerbated when this disease starts to infect the trade marks Register of the true owner’s country of origin. Whilst more sophisticated legal systems may provide some relief from such conduct, active trade mark filing and monitoring programs are still necessary to prevent similar brand equity erosion in home markets.
Welcome to the weird and wonderful world of IP rights in China!