French luxury group Hermès lost its longstanding trade
mark dispute in China this February. Back in 1977 Hermès
registered the name "Hermès" and its pattern in
China, but failed to register the Chinese translation of
Hermès. In 1995, a Guangdong based menswear company
registered the name "爱玛
仕" (Ai Ma Shi). The problem was that Hermès
has been using "爱马" (Ai Ma Shi) as
its Chinese name (the same pronunciation with very similar Chinese
characters to "爱玛"(Ai Ma Shi),
where "玛" and "马" are
very similar) and which is also the way the Chinese public
pronounces Hermès in Chinese. Hermès has since 1997
been trying to take back ownership of "Ai Ma Shi".
However, the Chinese trade mark authorities and Chinese courts
ruled against Hermès' claim on the basis that
Hermès failed to present evidence proving Hermès was
a well-known brand among consumers in mainland China prior to
"Ai Ma Shi" being registered by the Guangdong
Chivas Regal, the Scotch whiskey brand is also facing a similar
situation. In March 2012 a Chinese court ruled against Chivas Regal
by permitting a Zhejiang garment maker to use Chivas Regal as a
brand for its clothing, on the basis that Chivas Regal had failed
to register its trade mark under the relevant clothing class and
was also unable to prove its well-known status prior to the
Zhejiang maker's registration.
Similar trade mark disputes include pop star Britney Spears and
a Chinese clock manufacturer which registered "BRITNEY
布兰 妮" (BRITNEY in Chinese)
and NBA legend Michael Jordan and a Chinese sports appliance
manufacturer which registered "乔" (Jordan in
Chinese, and which is how the Chinese public refers to Michael
Jordan), and many others. Companies like Hermès and Chivas
Regal are losing the battle against local companies who file trade
mark applications for similar sounding names.
The problem of trade mark squatter in China is the direct result
of the implementation of a "first to file" trade mark
registration system, where the party who files for registration
first obtains the trade mark. This is comparatively different from
the "first to use" system, where a party filing for a
trade mark has to prove that it either has used the mark in
business or intends to use the mark for future businesses. Although
there are remedies in China for recovering the trade mark from the
squatters, it is a long, difficult and uncertain process.
The Hermès case also demonstrates that registration of
the English name alone is far from sufficient to protect the brand
owner because it is possible that another company may register a
Chinese phonetic translation of the English name before the
legitimate owner does so.
The following illustrates considerations that a brand owner
should be mindful of when filing a trade mark registration in
China. For example, if a foreign company intends to sell a gadget
in China under the brand name "Hero", it has the
to register the English name "Hero" under a relevant
to register Chinese translations of the meaning of the brand
name (conceptual translation), such as "英
罗" (Ying Xiong) which translates to
"Hero" in the Chinese language; and/or
to register the Chinese phonetic translations, such as
"希" (Xi Luo which transliterates to
It is advisable to adopt a combination of all three options as
listed above. In addition, the brand owner may also consider
whether to register simplified Chinese characters (which are used
as the standard writing script for mainland China and Singapore)
and/or traditional Chinese characters (which are used widely in
Hong Kong, Macau, Malaysia and Taiwan). The only setback for such a
combination of registration is that the costs involved are
definitely higher than that of a simple registration of only one or
two of the options. However, the risk of damage and the
corresponding costs to recover the trade mark may outweigh such
Further, it is vital for brand owners to keep proper
documentation to support a claim of well-known status prior to
squatters' registration. Such evidence should include other
trade mark registrations, examples of usage of trade mark,
marketing, promotional and advertising materials, consumer surveys
and records of money spent on promoting brand awareness. Brand
owners that keep good records, and enjoy management continuity may
prevail, but if a brand owner is unable to come up with sufficient
documentary evidence of prior use, the squatters' rights may
In summary, brand owners are advised to:
apply for registration as soon as practicable;
register the trade mark in more classes which could potentially
be of interest to the company;
keep proper and complete records;
monitor trade mark registers for similar marks; and
be prepared for a lengthy and difficult battle when faced with
This update is provided to you for general information and
should not be relied upon as legal advice.
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