Trademark issue in UK and China

30-04-12

Many well known brand in the UK have had the rights to their names in China snapped up without their permission by trademark "squatters". The Daily Telegraph did a investigation and they revealed that very few British companies own the Chinese rights to their names, posing a potential hurdle to attempts to expand their business in the country. China's trademarks operate on a "first-to-register" basis, which means whoever registers their brand first has the rights to it.

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Lawyers claim that subsequent attempts to win back a brand name through the Chinese courts only have a small chance of success and companies can end up paying to take back the rights. Many brands, such as for example Dixons, John Lewis, Waitrose, Asda and Sainsbury's are registered to Chinese businesses and individuals, some of whom may be "squatters", registering the brand in order to hold companies to ransom.
"It is certainly a problem if somebody's warehousing or sitting on marks that are well known in the UK," said Paul Jordan, partner in the brands group at the law firm Bristows. He also mentioned that if companies could not demonstrate that they had a sufficient global reputation in China to surpass the third-party trademark, or prove the trademark had not been used, then companies would have to consider to options, either using a different name in China or pay to regain rights to their name. Unfortunately it has happened quite often is that business had to open up their cheque books. According to a lawyer in the US who’s frim specializes in China, stated that the cheapest and easiest thing to do is to set up in China by using a new brand name.
There are also cases where other companies face the prospect of sharing their brand, and possibly even their logo, with a Chinese firm that has registered it in a different category.

Source: The Telegraph

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