It’s better to be safe than sorry when it comes to registering trademarks — in any country where a brand could potentially do business.
And when it comes to China, the sooner, the better. So say the lawyers who are helping brands get back their names because of bad-faith trademark registrations.
Joe Simone, a Hong Kong-based intellectual property attorney, said, “The number-one message is this: The only way to avoid a lot of costs is to file in China at the same time you file in the U.S.”
Simone is also the founder and director of Simone Intellectual Property Services Asia Ltd., which helps firms manage their IP portfolios, from registration to enforcement to the licensing of IP assets.
So why the specific focus on China?
According to Simone, “Chinese consumers all care about the new brands, and that has created a thriving trade in the gray market in fashion. The pirates are looking at all the new brands very early [in their life cycle], focusing on what’s been sold [for example] in Bloomingdale’s, online, what is advertised on Taobao. They do a quick search and find that a brand registration has not been filed in China and think, ‘I’ll do it first.’”
The issue of bad-faith registrations isn’t a new one for brands, but it certainly has become a very expensive one for firms trying to get back their name.
While pirates in many countries are seeking $30,000 to give back a name, the ask in China is far steeper. “In China, the pirates want $150,000, $200,000 and sometimes 1 million in U.S. dollars. They are willing to wait years to get their price, and in some cases, you can’t even get a price from the pirate because they are waiting for a final legal decision. Some brands will decide it’s worthwhile to pay up since they are losing money from not being able to sell in China,” Simone said.
Jessica Cohen-Nowak, an IP associate at Hunton Andrews Kurth, said that even if a brand, such as a U.S. company, preemptively files in China for a certain class of goods, it wouldn’t protect the company if an infringer files the same name for a different category. An example would be a firm selling apparel that forgets to file a registration for use of its name on handbags or footwear.
“My advice is to file preemptively for the marks in the classes that one is doing business in or foresees selling in over the next five years,” she said, adding that firms should consider Chinese characters for the brand name and any transliterations. She also advised that firms should file a copyright registration in China for any logo, and then register that with customs in China.
Cohen-Nowak said one big plus on the horizon is the interest by the Chinese government in trying to get a “better understanding” of what are the issues facing overseas brands.
An initiative of the Council of Fashion Designers of America earlier this year was a trip to China for a series of meetings about the IP challenges facing American fashion brands. The meetings detailed the CFDA’s report and findings based on a survey of its membership base. As expected, megabrands such as Ralph Lauren and Michael Kors garnered much of the attention from pirates. Smaller and highly popular brands such as Rebecca Minkoff, Brian Atwood and Mansur Gavriel also got their fair share of the attention. All three brands declined comment. Separately, public records indicated that Mansur Gavriel has been successful in at least registry dispute cases in 2016 in getting back its name from infringers.
Steve Kolb, president and chief executive officer of the CFDA, described a seminar that included attendance by Chinese government officials as an “open dialogue.” He noted another meeting with China’s Trademark Review and Adjudication Board, which looks at trademark issues in China.
“The meetings were well attended and the officials were respectful,” Kolb said.
Also attending was Doug Hand, a law partner at Hand Baldachin Associates and a member of CFDA’s Business Advisory Committee. “I think the biggest achievement in making the trip was to be able to sit across the table from people we had corresponded with. Before that, they were nameless and faceless bureaucrats. We were probably the same to them,” he said.
According to Hand, “I definitely got the sense they were listening [and] I did get the sense there were bits of information that were completely new to them.”
The CFDA is Hand’s client, and he said one of his recommendations after the meeting was to “keep and maintain those dialogues. Perhaps there’s a spark that won’t catch flames, but might need to be fanned a bit.…Keeping the channels of communication open is important.”