China Law Blog

Just came across a great post on the benefits of using lawyers before you encounter a problem.

The post is entitled, "Cautionary Tale: Hire Trademark Attorney or Change Name -- Three Times," and it rightly bills itself as "a cautionary tale for business owners who adopt a trademark before talking to a trademark attorney." The tale is as follows:

Zenith Vineyard in Oregon’s Willamette Valley might win the viticultural prize for having the most names in the shortest period. D.A. Davidson food-industry analyst Tim Ramey settled on Zenith after trademark disputes over his vineyard’s two other names.

Two years ago, London-based Diageo opposed the first name, Belle Provenance Vineyard, saying it was too close to that of Provenance Vineyards in Napa Valley. Ramey then tested the name Belle Orgine Vineyard but ran into trouble with Albertsons over its private-label wine called Origin. Finally, last year he changed the name to Zenith Vineyard.

“We were never willing to hire a trademark attorney for $10,000, so that’s why we got all this wonderful on-the-job education," Ramey said.

The post then goes on to point out that Mr. Ramey could easily have retained a trademark lawyer for less than $10,000 and then lists what he lost by his unwillingness to pay for legal services:

For one thing, it doesn’t cost $10,000 to talk to a trademark lawyer. But even if it did, think of all the goodwill that Mr. Ramey built up and then lost in his first brand, then built up and lost in his second brand, then had to build up again in his third (and hopefully final) brand. Not to mention all the money he invested in advertising, marketing, signage, and labeling for all three brands. I’m sure to Mr. Ramey, $10,000 now sounds like a bargain.

Learn from this gentleman’s mistakes. Invest in strategic trademark advice up front so you don’t waste precious resources later on.

I am always saying that my firms' best clients are those who have already been involved in litigation. Having been in litigation, these clients know how truly horrible and expensive it is and they are usually game for doing just about anything to avoid it. I analogize seeing a lawyer to changing the oil in your car: it costs money every time you do it, but it saves money in the long run.

Last month, a US company called me about suing a Chinese company for having "stolen" the US company's trademark. Further discussion revealed the Chinese company had registered the trademark the American company puts on its products and was now seeking to get the American company to pay a six figure yearly licensing fee for the American company to use it. We get similar calls every few months.

The American company had never registered its trademark in China. Though the company does around $100 million in yearly business, it had never retained a lawyer to assist it in China. I talked about the possibility of our suing the Chinese company for bad faith filing, and told the company that such a lawsuit would be difficult and expensive. I asked them whether they had used a China lawyer to assist with their China IP and their response was that they had "gone into China to save money not spend it."

I bit my lip but kept my mouth shut.