Protecting your intellectual property can be a challenge in China – and even in Hong Kong. Last month Gucci discovered that Hong Kong vendors were selling paper replicas of its handbags to be burned as offerings to the dead. Its parent company Kering issued a warning for infringing its trademark, but was soon criticised for behaving with cultural insensitivity. In a volte face, Gucci issued an apology, stating it had the “utmost respect” for local funeral rites. It will now turn a blind eye when paper versions of its bags go up in flames.
Apple also had a setback in a trademark case this month, when a Chinese court ruled that a firm named Beijing Xintong Tiandi Technology owned the right to sell leather products under the iPhone trademark, says Legal Daily.
Apple first registered its iPhone trademark for computer-related goods in China as early as 2002. But the registration didn’t cover other categories of products like leather goods. Xintong Tiandi, meanwhile, had registered the “IPHONE” trademark with the authorities under Class 18 (a category for leather products) in 2007, at a time when the first generation of the smartphone was being released in the US.
The court sided with the local firm, saying that Apple had failed to prove that the “iPhone” brand was famous in China – given that the smartphone wasn’t released there until 2009 – i.e. after Xintong Tiandi applied for its own trademark.
“The huge victory brings esteem to Xintong Tiandi’s promise to protect the IPHONE trademark,” the company crowed in a press release that thanked the tech giant for popularising the iPhone and contributing to its own success.
Apple was less thrilled about the outcome and it says it will appeal.
American sportswear maker Under Armour is also having trouble with its trademark in China. Early this month, a Fujian-based company debuted a new line of athletic gear called “Uncle Martian”. The logo of Uncle Martian is nearly identical to Under Armour’s (the letter “U” on top of an upside-down “U”) and the American firm is vowing legal action.
Compared with New Balance, Under Armour might consider itself lucky. Last year the sports shoe manufacturer had to pay almost Rmb100 million ($16 million) to a local businessman for improperly using his trademark. The man, surnamed Zhou, had registered the names “Bai Lun” (the Chinese transliteration of balance) and “Xin Bai Lun” (Xin means new) in 1996 and 2004, respectively. And although New Balance claims that it had long been selling shoes in China under the same identifier, the court sided with Zhou saying he was the first to file.
Legal experts say foreign firms are often at a disadvantage when it comes to intellectual property disputes in China, especially if they haven’t sought to protect their brands from the outset. That’s because the country’s legal system generally protects whoever registers a trademark first. In the past, enterprising businessmen like Zhou were quick to file for trademarks that were well known overseas but not registered locally, hoping that the foreign firm would pay up further down the line.
Still, some of the other verdicts in trademark cases have provided more hope for foreign brands. Last week the high court in Beijing sided with Facebook by ruling that a local firm that makes potato chips and canned vegetables should not have been allowed to register the “face book” trademark in 2014.
Another dispute between representatives of the basketball legend Michael Jordan and the sportswear company Qiaodan Sports (the Chinese transliteration of Jordan) has been rumbling on since 2012. After multiple appeals, the case is now being heard at the Supreme People’s Court, the highest court in the country (see WiC188). Legal experts say the final ruling, which could come within days, will set a precedent for other foreign companies seeking to protect their intellectual property rights.
“It’s an extremely influential case, and the final verdict from China’s top court would play a leading role in future similar cases,” Li Shunde, a research specialist in intellectual-property law, told Bloomberg.
“China has been consolidating IP law over the past years and apparently the authorities want to use this case to show that the country takes the IP issues very seriously and is devoting resources to protect the rights of foreign businesses.”
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