Every few months, my law firm gets contacted by a Western company that wants us to pursue a bad faith trademark case against a company in China. Typically, the Western company wants to pursue litigation against a Chinese company for having trademarked what the Western company perceives to be their tradename or trademark. These cases usually range from very difficult to just plain impossible.
Here are some examples as to why.
Someone Registers “Your” Well-Known Mark in China.
China considers a trademark to constitute a well-known mark if it is well known in China. Coca Cola and maybe now Starbucks would qualify under this standard. AT&T might not. Your trademark almost certainly does not. If you really have a well-known mark and someone in China registers it, you have a bad faith filing. I cannot even imagine what company would think it better to sit back and wait for someone to register “its” trademark in China and then sue that registrant for bad faith filing, as opposed to simply going ahead and registering that trademark in China.
Your Agent Registers “Your” Trademark in China.
China’s trademark law states that when “any agent or representative registers, in its own name, the trademark of a person or entity for whom it acts as agent or representative, without an authorization therefrom, and the latter raises an opposition, the trademark shall be rescinded and prohibited from use.”
China’s Trademark Office states that “agent or representative” should be very broadly construed and that the authorization must be unambiguous and in writing. This all sounds good and the problem here is not the law itself. The problem is proving that the person who registered “your” trademark in China was your agent.
The most likely person to register “your” trademark in China is someone on the inside. The person best positioned to know the value of your trademark is going to be someone at your China OEM manufacturer, someone at your joint venture partner, or one of your own employees. Under the law, none of these people should be allowed to register your trademark on their own behalf and it is very likely none of them did. This law has now been around long enough so that if your OEM manufacturer, joint venture partner or employee has any brains at all, they will not register your mark in their own name; they will instead have their cousin in Xi’an or in register it, leaving you with the near impossible task of showing the linkage. It will always be cheaper, easier and more certain to register your trademark than to bank on being able to prove that the person who now legally owns “your” trademark in China secured it illegally.
Someone Preemptively Registers “Your” Trademark in China in Bad Faith.
China’s Trademark Law also provides that a trademark application shall not be allowed if it is being done to “preemptively register by unfair means a trademark that has already been used by another person where such mark has achieved some degree of influence.” China’s Trademark Office states this provision applies to trademarks that have not yet been registered in China and it defines “some degree of influence” to mean that the mark has been used on a product in China and Chinese consumers have come to identify that mark with a particular product in China. This means this provision will probably never apply to foreign marks used outside China. China’s Trademark Office defines “unfair means” as having a motive for filing that violates the principle of good faith and fair dealing, as defined in China’s civil code.
Factors for determining bad faith in this situation are:
a. Whether the parties had prior business dealings with each other.
b. Whether the parties have had past disputes.
c. Whether the registration was for an unfair motive, such as to force the other party to enter into a business relationship, to force the other party to assign over its mark or to force the other party to pay for having allegedly infringed on the mark.
Again, the law sounds good, but the proof problems are certain to be substantial. And again, it will always be cheaper, faster and more certain just to register your mark in China.
In every single instance when someone has sought to retain my law firm to pursue a bad faith trademark claim in China, we have counseled them against it as the costs are too high as compared to the likelihood of success. And in every single instance when someone has sought to retain my law firm to pursue a bad faith trademark claim in China, about all I can think about while I am telling them of how difficult their case will be is “why the heck didn’t they just register their trademark in the first place?”
As we have said many times, the only real solution to protecting your mark in China is to register it in China early and to, at minimum, register every mark that you will be using in China, in both any foreign language and Chinese language you will use. If you wait to file, you are simply inviting a competing registration that will cause you major problems in China. China is a first to file jurisdiction and most be approached that way. If you wait to file until after your brand is already established in China, you are just inviting trouble. There is a good chance someone else will have registered your mark and it is almost certain you will not be able to do anything about it.
Do you feel lucky? Do you?

Dan Harris

I am a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

I mostly represent companies doing business in emerging market countries. It has taken me many years to build my network and it takes constant communication and travel to maintain it. My work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

I was named as one of only three Washington State Amazing Lawyers in International Law, I am AV rated by Martindale-Hubbell Law Directory (its highest rating), I am rated 10.0 by AVVO.com (its highest rating), and I am a SuperLawyer.

I am a frequent writer and public speaker on doing business in Asia and I constantly travel between the United States and Asia. I most commonly speak on China law issues and I am the lead writer of the award winning China Law Blog (www.chinalawblog.com). Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed me regarding various aspects of my international law practice.

I am licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at my firm, I focus on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.