Many companies attempting to enter the Chinese market quickly reach a roadblock due to trademark “squatters.” These individuals target thriving brands in other countries and register them as a trademark in China.

When these companies then expand to China, they discover someone else holds the trademark rights. These companies may have to pay large sums to buy the trademark, rebrand their product, or enter a lengthy legal battle.

Penfolds Wine
One company that faced this is was the popular Australian wine brand, Penfolds. They are in an ongoing legal dispute over their own name in China, as Ben Fu has claimed the ownership of the Penfolds name in that country.

Treasury Wine Estates, the owner of the wine in Australia, has taken legal action against Ben Fu in hopes of protecting the integrity of the brand.

Ben Fu
Ben Fu, which translates to “chasing prosperity” is notorious for trademark squatting; his real name is Li Daozhi. He has won similar cases in the past, including one against a French winemaker.

First to File
In China, they follow the trademark law of “first to file.” This means whoever files for the trademark first is the owner.

This is quite different from other countries. Many follow a common law system. This means that those filing for a trademark have to show their business intents. The “first to file” law creates an issue for foreign companies.

These companies cannot object to trademarks already registered in China. Instead, they can attempt to prove the trademark was intentionally claimed for blackmailing purposes, or that the trademark was claimed when the brand was well known.

Other Companies Facing Issues
Penfolds is not the only company to face trademark squatting issues. Some other prominent cases include:

  • The electric car manufacturer Tesla was taken to court by Zhan Baosheng who owned the “Tesla” trademark in China. He was seeking 23.9 million yuan.
  • Pfizer, the pharmaceutical brand, fought for the rights to Viagra. They won the patent rights and 3-D trademark rights but lost the trademark case because they could prove it was well-known to those in China.
  • Hermes, the luxury retailer.
  • Chivas Regal, the whisky brand.
  • Singers and sports stars are also being trademarked in China. One man owns the right to use the name Justin Beiber and some World Cup stars have also been trademarked.
  • Castel Frères, the French winemaker, had to completely rebrand after losing a trademark battle.

Improvements Ahead
New laws were passed in China which could make things easier for companies in the future, but things still remain unclear for foreign companies wishing to enter the Chinese market.

Trademark Issues?
If you feel you have been a victim to trademark infringement, or desire more information to register a trademark, contact the intellectual property attorneys at JacksonWhite.

Call JacksonWhite at (480) 464-1111 to discuss your Intellectual Property case today.

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