How do you prevent your Chinese trademark from being pirated abroad?

Companies should pre-register the trademark before selling protected products abroad.

The international department should coordinate with the legal department at a Chinese company to ensure that trademarks are registered before products are sold elsewhere.

When signing sales contracts with foreign agents or foreign trade companies, enterprises should include specific stipulations to avoid later disputes.

In daily management and foreign trade activities, enterprises should keep correspondence about trademarks to serve as evidence when encountering trademark pirates.

Companies also should choose distinctive or unique words as trademarks.

Some Chinese trademarks such as Si Tong (Stone), Lian Xiang (Legend) and Fang Zheng (Founder) are not distinctive, especially if the English word used in the trademark is a word used frequently in daily life.

This is why Lenovo spent lots of money to switch its name from Legend to Lenovo.

Choosing unique words as trademarks like Microsoft, Sony, Intel and Lenovo might make it easier to retrieve a trademark if the trademark is pirated.

The goal also must be to respond quickly. Enterprises should file the necessary paperwork with the National Intellectual Property Office or court without delay when trademark piracy is discovered.

Victims also should hire an appropriate IP (intellectual property) counsel or local law firm.

A professional IP counsel or law firm can assist the Chinese company to avoid troublesome situations or defend the company during IP disputes.

Last but not least, the Chinese company should set up an international trademark protection and monitoring system abroad.

The enterprise should be aware of the importance of IPR (intellectual property rights) and incorporate IP strategies into business management policies and practices.

Trademark recovery

If a trademark is pirated abroad, the following steps might assist companies in efforts to recover their trademarks.

Generally speaking, if the pirated trademark is registered by the distributor or local agency, the Chinese trademark owner will have a greater chance to get it back if sufficient evidence and supporting materials are provided.

It is crucial to keep original evidence such as invoices, contracts, advertisements and customs export declarations.

Second, the company should analyze the regulations and laws of the countries where the trademark has been pirated, and also the costs of administrative versus judicial remedies.

Generally, while each region will follow the rule of law, each region also might have different requirements for evidence.

The cost and time spent pursuing trademark protection also can differ from region to region.

For example, the cost of seeking administrative or judicial remedies is considerably higher in Western countries such as the United States, Germany and United Kingdom versus countries such as Japan and South Korea.

The company also should consider the time spent pursuing judicial remedies.

Sometimes a Chinese enterprise can recover the exclusive right to use a trademark via litigation, but instead will sit down and negotiate due to the time-consuming nature of defending a trademark.

For example, this becomes an option when it might mean missing crucial market development time.

In these cases, marketing and profits become the decisive factors.

According to the different circumstances in each case, the legitimate owner can file for bad-faith cancellation and or cancellation as leverage to negotiate with the counter-party to recover the trademark.

The best way to prevent trouble is to file trademarks in advance as early as possible, even before commencing business operations in that region.

Robert Li is a trademark lawyer with Beijing Unilaten Attorneys at Law

Editor's note: The IPR Special is sponsored by the State Intellectual Property Office and published by China Business Weekly. To contact the Intellectual Property Office, the IPR Special hotlines are 8610-64995422 or 8610-64995826, and the e-mail address is ipr@chinadaily.com.cn.

(China Daily 09/07/2009 page9)