More than four years ago, we did a post, entitled, China: Do Just One Thing. Trademarks. In that post, we emphasized the absolutely critical importance of registering your trademarks in China, not later but now:

From time to time I get calls from start-up companies about to embark on manufacturing in China. They are calling to ask what they need to do “to protect themselves.”

I tell them about NNN Agreements and important those are to help prevent potential manufacturers from replicating their product. And I tell them about how important it is that they have an OEM Agreement to define and “regulate” their relationship with their Chinese manufacturer.

Then I tell them how if they do nothing else, they should immediately register their trademarks in China. This one usually surprises them and they often think I have misunderstood what they are planning for China. They at first do not understand why I am emphasizing the need for their filing a trademark in China when they have no plans to sell their product in China. I then explain the following to them:

China is a first to file country, which means that, with very few exceptions, whoever files for a particular trademark in a particular category gets it. So if the name of your company is XYZ and you make shoes and you have been manufacturing your shoes in China for the last three years and someone registers the XYZ trademark for shoes, that other company gets the trademark. And then, armed with the trademark, that company has every right to stop your XYZ shoes from leaving China because they violate its trademark.

Then they understand.

A Quartz Magazine (a great magazine put out by The Atlantic) article from earlier today does a great job nailing this point home. The article is entitled, In China, Michael Jordan does not hold the rights to his own name, and it illustrates the importance of you (and Michael Jordan) registering any and all trademarks in China (right now) important to you now or that may be important to you later. Because — as our China lawyers are always telling our clients — if you don’t do it, someone else will.

Please do read the Quartz Magazine article because the key to it is all that Michael Jordan has done and will continue to do in an effort to get back various trademarks important to him. To summarize, Jordan has already lost at least two Chinese court lawsuits against Qiaodan Sports, a now large Chinese company alleged by Jordan to be using 78 of his trademarks, including Qiadon, his name as commonly used in Chinese, and at least one of his images, as per the below.

Photo of a Qiadon store from the Quartz Magazine article.
Photo of a Qiadon store from the Quartz Magazine article.

The article makes clear that Jordan is not done suing Qiadon and that he plans on taking his case next to China’s Supreme People’s Court. Some of you who read the Quartz article will no doubt be outraged about Qiadon’s actions and believe the Chinese court rulings against Jordan have been wrong. Others may read it and think that the Chinese court has properly followed China’s trademark laws as written. I read it and recognize that unless I were to spend tens of hours reviewing the court transcripts and more, I would not have a good sense of who between Jordan and Qiadon is legally correct/entitled and I am not going to do that.

Because in the end the way I see it is that this article is just yet another example of how easy the calculation should be for any company doing business in China or contemplating doing business in China. Are you better off spending thousands of dollars now protecting your brand(s) and your trade-names in China by registering them in China, or are you better off spending hundreds of thousands of dollars (maybe even millions of dollars) later in litigating against those who are using your brand(s) and/or your trade-names in China?

Michael Jordan may eventually prevail on some or even all of his trademark infringement claims against Qiadon in China, or he may not. But either way, he will have paid a big price to get there, both out of pocket for the litigation and in the harm his brand has incurred in China from Qiadon as a competitor. Those costs dwarf what it would have cost Jordan to have filed for trademarks in China early on.

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Photo of Dan Harris Dan Harris

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

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network.  His 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.

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

Dan is a frequent writer and public speaker on doing business in Asia and constantly travels between the United States and Asia. He most commonly speaks on China law issues and is the lead writer of the award winning China Law Blog. 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 Dan regarding various aspects of his international law practice.

Dan is licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at his firm, Dan focuses 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.