The word on
the street is that the IP community
is becoming increasingly concerned
by a worrying trend in trademark
squatting in China. It has long been
known that copyright owners are
susceptible to unscrupulous copying
of successful designs in China (view
the Van Neder case here) but
trademark owners are now also being
attacked.Successful
companies are increasingly suffering
the effects of international
trademark squatters taking advantage
of the “first to file” system for
trademark registration in China.
This means that some Chinese
companies and individuals who
understand the system well have been
registering trademarks in China and
then sitting back until foreign
companies wanting to expand their
business into Chinese markets
realise that they have been beaten
to it and are left with a choice
between negotiating with the
registrant for use of the mark or
re-branding.
Under the UK system, opposition
could be raised on the basis that
there had been no use of the mark by
the Chinese registrant but in China
Article 31 of the Trademark Law
requires an opponent to show
reputation in the trademark in
dispute prior to the filing date of
the contested application.
"Reputation" is considered to be
some degree of recognition within
the relevant Chinese public, which
is notoriously (and statistically)
difficult to show – more opposition
proceedings based on reputation are
lost than won.
How can this be avoided?
Anticipation is key if you intend to
operate in the Chinese market. China
has no common law rights for
unregistered trademarks and
businesses should therefore take the
pre-emptive step of applying now to
register their trademarks in China.
The cost is relatively small and
failure to register, as can be both
very costly and disruptive to
business (as market leaders such as
John Lewis, Sainsbury’s, Asda and
Dixon have already found).
For further information contact
Tony Catterall – (01254 297900) or
tony.catterall@taylors.co.uk. |
