Our advice to all our clients is to register their trademarks in China before they go there. China is a first to register country and this means that whoever registers the trademark first gets it. Yes, there is an exception for famous trademarks, but unless you are Coca-Cola, it is lunacy to bank on a Chinese court holding your trademark is famous when just going ahead and registering it costs so little. Most firms charge less than $5,000 for this. So even if the Chinese Court rules your trademark is famous, you will almost certainly have spent well over $5,000 in making your case.
Ferrari, the famous Italian car manufacturer, just proved my point.
China Business Law Blog recently posted on Ferrari’s having lost out on the horse logo in China. The post is entitled, “Ferrari is Famous, But Is the Horse Too?” The post relates how after more then ten years of legal wrangling (anyone think that cost less than $5,000?), The Beijing 1st Intermediate Court ruled Ferrari’s horse is not famous enough in China to be considered a famous trademark.
In 1996, White Clouds Sports Merchandise filed for trademark protection of a horse logo to go with a clothing line. Ferrari filed a timely opposition to this registration, claiming granting White Clouds the trademark would confuse consumers. “The Chinese Trademark Office did not buy Ferrari’s argument, citing that White Clouds registered the graphic of the horse first.”
Undaunted, Ferrari appealed to the trademark review board, claiming “both the Ferrari with the horse graphic trademark and the horse graphic alone constituted famous trademarks.” The review board denied Ferrari’s appeal and Ferrari then took its case to court.
Before the court, Ferrari again claimed the graphic of the horse is closely tied to the Ferrari mark, and it should be considered a famous trademark because the Ferrari trademark has become well known around the world, including in China. The court rejected Ferrari’s claim for the following three reasons:
- Ferrari failed to provide sufficient evidence regarding its use of the horse logo in China.
- China has a system in place for recognition of famous trademarks. The recognition of the name “Ferrari” as a famous trademark does not constitute recognition of the Ferrari horse graphic.
- The issue in the case is the horse logo, not the Ferrari trade-name. The horse cannot be bootstrapped to the Ferrari trademark for like protection.
China Business Law Blog concludes its post with some good advice:
After more than ten years of trekking in the Chinese legal system, Ferrari got a disappointing verdict. Hopefully, Ferrari got something else too, a lesson to register its trademarks, [and] related trademarks as early as possible.
Or, as my friend Dan Hull, over at the perennially enlightening What About Clients, puts it, “Dude, register your IP in China.”
For more on registering your trademarks in China, check out this article I wrote for ALM’s China Trade Law Report, entitled, “China’s Trademark Laws – Simple and Effective.“