Translating Chinese Trademark Squatting Disputes

Chinese Translation Services for Trademark Squatting Cases

We’ve blogged about the ongoing need for Chinese to English and English to Chinese legal translation services for intellectual property rights (IPR) infringement in the form of trademark squatting. One of the most difficult problems that multi-national companies confront when getting into the Chinese marketplace is that their brand has been appropriated by a Chinese company and already registered as a trademark by that Chinese company. That is the essence of trademark squatting. A squatter is typically the multi-national company’s former agent or distribution entity in China, or it could simply be a professional “trademark squatter.”

The goal of trademark squatting in China is to take a trademark before the foreign company that created the brand comes to China. Then, when the foreign company comes to China, the squatter will sell the trademark back to the foreign company for a huge sum of money. The practice is similar to those who buy up website domain names of famous people or famous brands, before the legitimate person or entity is able to get the domain name, with the purpose of selling the domain to the legitimate entity for a huge sum.

Under current Chinese trademark laws, it is possible for a foreign company that rightfully owns a brand to take a trademark from a squatter. However, the process is long and complicated, leaving the rightful owner of a trademark with the option of simply developing a new brand, or paying the ransom set by the squatter.

The current state of affairs, however, might be changing. Accordingly, this article will take a moment to focus on the changes proposed in China, and how they will help multi-national companies keep their hard-earned brands in the Chinese market.

Of course, under the current Chinese law or if the proposed changes take effect, your company will need to be able to translate any legal documents to prosecute a challenge to a trademark squatter in China. That means that you need a professional, reliable legal translation service to help you with the documents you file in Chinese courts. Consider contacting us at All Language Alliance, Inc. We are a premier legal translation service that can help you fight for your trademarks in China. Call us for more information today at 303-470-9555.

Cutting Trademark Squatters at the Source – Proposed Legislation in China

The China National Intellectual Property Administration (CNIPA) has developed a new initiative that cleverly goes at the problem of squatters at the source. Rather than allowing legitimate trademark owners the only option of clawing back their trademarks in China after they have been registered to a squatter, the CNIPA suggests rejecting “bad-faith” trademark applications at the front end.

On February 12, 2019, the CNIPA issued a draft of the Several Provisions on Regulating the Application for Registration of Trademarks, which fleshes out the idea of rejecting bad-faith trademark applications. The elements in Several Provisions are as follows:

• Applications for a Chinese trademark must have an actual need, and cannot prejudice the previous rights of others.
• The applicant and the trademark agent must follow the principles of good faith and fair dealing.
• If a trademark application is considered irregular, or appears to be a possible trademark squatting attempt, an applicant can be required to provide additional evidence. If the evidence that accompanies the application is insufficient, then the trademark application can be rejected.
• Any organization or individual who discovers an irregular trademark registration may report it for further investigation to the CNIPA.

The main provision is Article 3, which gives helpful guidance on what types of application are “irregular” and therefore require additional investigation. The guidance suggests that irregular trademark applications are those that:

1. Imitate brands or trademarks that are already familiar to the public;
2. Are exactly the same, or substantially similar, to the prior trademark rights of others, and the applicant knows of those prior rights;
3. Are filed along with many other applications filed by the same applicant, over a relatively short period of time;
4. Are not intended to be immediately used;
5. Violate good faith and fair dealing, infringe on the legitimate rights of others, or disrupt the market order.

The proposed provisions by the CNIPA are, indeed, stronger powers than currently available in China. They make good common sense as well because they allow trademark squatters to be “nipped in the bud” rather than give a squatter a legal trademark that needs to be unwound later by the legitimate trademark owner. Provided that it can be enforced appropriately, the provisions will likely save a great deal of money in litigation costs and or “ransom” payments for a legitimate trademark owner to wrest the trademark away from a squatter.

Will the New CNIPA Initiative Really Help?

The CNIPA’s provisions acknowledge the obvious problem that something needs to be done about trademark squatters, given that squatters distort and impede entry into the Chinese market. The provisions are, thus, a good step in the right direction. But, enforcement is where the “rubber meets the road.” Can trademark examiners really enforce the provisions once implemented?

In 2018, a staggering 7 million trademark applications flowed through the Chinese system. It is estimated that the figure gives each trademark examiner about 10 minutes with each application. Such high volume does not allow for much investigation of irregular applications. Thus, it may still be a challenge to enforce the new provisions.

That means that the best way to protect a trademark in China is still to file first. Therefore, multi-national companies should focus resources on registering their trademarks as early and completely as possible.

Ensuring that trademark applications are properly filed in China, and assisting with any dispute surrounding a trademark in China, requires competent English to Simplified Chinese legal translators and Mandarin legal deposition interpreters for remote video depositions and for on-site depositions who can get the job done accurately the first time. Accordingly, we welcome you to contact our legal translation service. Our English to Chinese legal translation services will help you protect your trademarks in China.

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