China’s trademark system is a minefield of murky rules and opportunistic “trademark squatters” that even the world’s biggest companies and their highly paid lawyers find hard to navigate, as Apple Inc and Facebook Inc are the latest to find out.
While Apple is embroiled in a legal wrangle over the right to the “iPad” brand, Facebook has to contend with a slew of applications for more than 60 variations of its name as it weighs up whether to enter the China market.
The technology giants’ struggles strike a cord with entrepreneur Ben Walters.
New Jersey native Walters launched his OSPOP sneakers, based on a shoe design popular with Chinese workers, in 2007.
After generating a buzz in international and local media, he decided to enter the world’s fastest-growing consumer market in 2010 — to find pirated copies of his product already on the market and four Chinese companies tussling over his trademark.
“These are people who are out there snatching up intellectual property [IP] with no related interest, strictly from the standpoint of owning IP as an investment,” Walters said, adding that the lack of a trademark has hampered his business.
Lawyers said trademark squatting was a problem in China, aided by agencies that register hundreds of trademarks in the hope of turning a profit.
Chinese intellectual property consultancy East IP says it has found a myriad of variations on the “Facebook” name, in English and Chinese, since being hired by the US social networking phenomenon to handle its trademark issues in China.
“We found out that many of the trademark names in Chinese have already been registered,” an executive from East IP said. “We are gathering evidence now and we hope we’ll get the trademark rights to the Facebook brand.”
Facebook, which is preparing for a US$5 billion initial public offering, said recently it was contemplating re-entering China, after being blocked nearly three years ago.
Walters said a food company in Guangzhou demanded 1 million yuan (US$158,700) in return for the OSPOP trademark. The 36-year-old, who is now based in Shanghai, declined the offer.
“I’m an entrepreneur through and through, just struggling with limited resources. And taking on this market with its zillion IP questions is really challenging,” he said.
Legal experts say the onus is on companies looking to do business in China to understand how its trademark law works, as it differs greatly from that of the US.
China uses a “first to file” system when it comes to trademarks, meaning that the party who files for registration first gets the trademark, while the US uses a “first to use” system, meaning a party filing for a trademark has to show that it’s either used the mark in business or intends to use the mark in the future for business.
This crucial difference can make life in China hard for even the biggest foreign companies. For example, drug company Pfizer Inc fought a long battle in Chinese courts over the Chinese name of Viagra, which was first registered by a Chinese company. Pfizer eventually lost the suit.
Apple’s current trademark woes with Proview Technology (Shenzhen) (深圳唯冠) do not stem from a “first to file” or “first to use” issue. Rather, it could be because of poor due diligence, legal experts said.
Apple says it bought the worldwide rights to the name iPad from Proview International’s Taiwanese unit, but a court in Shenzhen ruled that Proview Technology (Shenzhen) actually owned the trademark.
“When you are buying something from someone, make sure they own it, if not you could be buying the Brooklyn Bridge,” said Dan Harris, a lawyer with Harris & Moure and co-author of the China Law Blog.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last