China is the final destination for the majority of Australia’s exports. A growing population and increasing demand for Tasmania’s Bridestowe Lavender Estate bear and Ugg Australia’s Ugg boots present clear opportunities for Australians in the Chinese market. However, intellectual property theft including trade mark squatting is still a real risk for businesses selling products in China. The recent experiences of Australian brands, ‘Farmer Brown’s Dairy Company’ and ‘Penfolds’ illustrate the pitfalls of the ‘first to file’ trade mark system in China. We go through these below.
Farmer Brown’s Dairy
Within the next few years, Farmer Brown’s Dairy cow logo aims for the same notoriety and recognition in households and supermarkets worldwide as Dairy Farmers’ blue canola flower logo.
Their company strategy included an ambitious expansion into China selling ice-cream and milk products. Farmer Brown’s Dairy were in for an unpleasant shock when they discovered ‘Putian City Federation Trading Company’ had registered an identical logo as a trade mark in China. Because of China’s first to file system, Farmer Brown’s Dairy could not register their trade mark, halting their expansion plans.
With China the second largest wine drinking nation (per capita) after France, Australia is well positioned to supply their population was a quality and internationally renowned drop.
Penfolds naturally agreed and tried to register the Chinese transliteration of Penfolds, ‘Ben Fu’ meaning ‘Dashing Towards Prosperity’. However, notorious wine trade mark squatter, Li Daozhi, who was recently awarded millions of yen in a judgment against a French vintner, owned Ben Fu. Penfolds, consequently, could not register their trade mark. Litigation is ongoing.
Could the Real Justin Beiber, Please Stand Up?
So how does Bieber fit into all this? A man in Guangzhou reportedly owns the right to own the Canadian singer’s name. One then wonders how Bieber would promote his concerts if he ever visited China.
Trade mark squatting has forced brands to:
- Pay for the use of their trade mark in China (Apple reportedly paid $USD60 million to use the name ‘iPad’ in China);
- Re-brand; or
- Spend millions in Court to demonstrate that they should have the right to use their trade mark.
Help Me! I’m Bieber!
If you’ve discovered that another brand or business has trademarked your brand in China, your options for recourse are unfortunately limited. The Chinese first to file system means that whoever files first has the right to use a trade mark. Other than seeking advice from a trade mark lawyer, the adage ‘prevention is better than the cure’ has never been more relevant. You should apply for a trade mark as soon as you contemplate breaking into the Chinese market, and ensure that you avoid the same problems as Farmer Brown’s Dairy and Penfolds.
If doing business in China is on your radar, file a trade mark. Penfolds and Farmer Brown’s highlight how important it is to file a trade mark in China as early as possible. If you don’t file early, Tardis’ are in short supply. So are businesses with a dispensable $USD60 million to pay to use a trade mark.
Make the most of the opportunities presented by the Chinese market, but ensure you do your research first and check you can trade on your most valuable asset – your brand!
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