Translations for Trademark Squatting in China

Chinese Translations for Trademark Squatting Litigation

There is a growing need for legal translation services for trademark squatting cases in China. In the real property world, “squatting” is defined as occupying an uninhabited building or settling on a piece of land that does not belong to the “squatter.” Once a person has occupied the building or settled on the land for some period of time without being chased off, the squatter begins to have some actual legal rights to the building or land.

The property-law rationale that allows squatters to gain property rights comes from the principle that land should be productively used rather than left unoccupied for long periods of time. Thus, squatters will, over time, gain legal rights on a piece of property if the true landowner allows the property to sit unused.

While that rationale may make sense in the real property world, it does not have as much persuasive force in the intellectual property world. That is why you and your company should know a little bit about “trademark squatting” and how English to Chinese legal translation and transliteration services can help protect your valuable brand overseas.

What Is Trademark Squatting?

Analogous to squatting on real property, there are people who seek to gain economic advantage in bad faith by registering a trademark in another country before the actual owner of the trademark can do so. Therefore, such “trademark squatting” or “trademark hijacking” gives those bad faith actors the ability to profit from another company’s trademark without doing any of the work that led to adding value to the trademark.

China is one of the worst, if not the worst, market when it comes to trademark squatting. In fact, trademark squatting in China has emerged in recent years as a serious business problem for many multi-national companies. That is due, in part, to the fact that an English brand name is often not the name that is commonly used in China. Rather, the English brand name is transliterated using Chinese characters.

Chinese Transliteration – And Why U.S. Companies Sometimes Fail To Register A Popular Trademark in China with Its Chinese Translation

To give an example regarding the difference between an English trademark and a transliterated one, let us take a look at McDonald’s. There is no question that McDonald’s is one of the most recognized names in fast food throughout the planet. Yet, McDonald’s needed to be careful not just to register its trademark in Roman letters to protect its brand. Indeed, most Chinese consumers recognize non-Chinese brands through their Chinese translation or transliteration, rather than through trademarks in Roman letters.

So, even though McDonald’s only uses the Roman letters “McDonald’s” on any signage in China, the Chinese consumer knows the company primarily by the transliterated Chinese characters for “Mai Dang Lao,” which is a rough phonetic translation of McDonald’s. Most likely, that is because it is difficult for Chinese consumers to read and pronounce non-Chinese names.

Had McDonald’s failed to understand that most Chinese consumers do not refer to the company as “McDonald’s” but rather as “Mai Dang Lao,” and had McDonald’s failed to register the Chinese characters for “Mai Dang Lao” as a trademark, then a savvy trademark squatter may have tried to register it first, to McDonald’s detriment.

That is precisely what happened to several internationally famous brands. Here are some examples.

A. New Balance v. Zhou Lelun

The New Balance case is a study in the serious consequences of a multi-national company failing to secure the Chinese transliteration and translation that is most recognized by Chinese customers. For years, the American sportswear company, New Balance, had used the Chinese characters for “Xin Bai Lun” as the Chinese transliteration of “NEW BALANCE.” The New Balance company, however, never registered those Chinese characters as a trademark in China.

Meanwhile, Mr. Zhou Lelun, who already owned the trademark to the Chinese characters for “Bai Lun” and had opened up his own shoe and clothing factory, applied for the trademark “Xin Bai Lun” in 2004. When New Balance learned that Zhou’s trademark application had been approved, New Balance sued in China to oppose the registration of that trademark for Zhou. New Balance’s opposition was denied. China’s “first-to-file” rule provided the basis for the denial.

New Balance, however, continued to use the Chinese characters for “Xin Bai Lun” anyway when promoting its products in China, because that is how Chinese consumers came to know the product. Zhou then sued for trademark infringement – and he won!

The Chinese court found that “Xin Bai Lun” is not the only way to translate “New Balance,” and New Balance simply failed to register the trademark first. Something that hurt New Balance’s case was the fact that it knew Zhou had an approved trademark application, yet it continued to use “Xin Bai Lun” in its promotional materials anyway. New Balance ended up having to pay Zhou $16 million dollars (US).

B. Pfizer’s Viagra Trademark

Pfizer’s Viagra case in China is one of the earliest, and still most notorious, examples of a Chinese transliteration invented without the knowledge or consent of the brand owner.

When Pfizer first filed a trademark application for Viagra, the Chinese media created the transliteration “Weige,” which cleverly means “Great Older Brother,” for the brand name “Viagra.” The term “Weige” became a sensation in the entire Chinese-speaking world.

Once Viagra was launched in the U.S. in 1998, several Chinese companies filed trademark applications in China for the Chinese transliteration “Weige” before Pfizer did. After four years, the trademark “Weige” was registered for the Chinese company that was the first to file, not Pfizer.

Following a long protracted lawsuit – primarily on the grounds that “Weige” should be given to Pfizer under the “famous marks doctrine” – Pfizer in 2009 lost its bid to get the trademark for the transliteration “Weige.” To this day, a Chinese company owns the rights to the term “Weige,” which is still the name by which Viagra is best known in China.

Legal Translation Services Can Help Prevent Losing the Trademark Squatting Battle

As the examples demonstrate, multinational companies, and even small to mid-size companies, with valuable brand names must be ready to take ownership over the Chinese transliterations and translations of their brand names before squatters can swoop in. The way to do that is by employing a professional, experienced, qualified legal translation service before the product or brand is registered anywhere.

A good Chinese legal translation service can ensure that an international company or a celebrity is aware of the “lay of the land” when it comes to the Chinese transliteration of a particular trademark or name early. Thus, by employing a professional legal translation service prior to your international expansion to China your brand name can stay with the company and out of the hands of trademark squatters.

We welcome you to contact our translation company with expertise in translating legal documents from English to Chinese to help you prevent trademark squatters in China. We also provide certified Mandarin Chinese interpreters for depositions in trademark squatting cases. We have the skill, know-how, and business acumen to help translate or find proper transliterations for your products in any language, including Mandarin Chinese, Korean, Spanish, Russian, Portuguese.

**This legal translation blog post should not be construed as legal advice. You should always consult an attorney regarding your specific legal needs.

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