In 1995, a Chinese company registered the name Ai Ma Shi, which is what Chinese call Hermès. Hermes has for a long time sought to take away the Chinese company’s trademark registration of Ai Ma Shi and secure it for itself. Chinese courts have consistently ruled against Hermès and a Chinese court did so again last week.
How might this impact your business? Well, the Chinese Court decision should not impact your business at all, because the Chinese Court’s ruling was strictly pursuant to existing Chinese law so it did not pave any new ground. But it did reinforce exactly what foreign companies must consider in determining what trademarks they need for China. If you are going to sell your product in China, you need to think long and hard about what you are going to call it and what others are going to call it. If you will be selling a widget in China under the Ace brand name, you should, of course, register the name “Ace” (in English) in China under the proper classification/category for widgets. This part is simple.
But what else should you be thinking about registering as a trademark in China? A lot depends on the deepness of your pockets. If you are a Fortune 50 company, you might want to consider registering any and all Mandarin (and maybe Cantonese and Shanghainese) translations (both loose and tight) of the word “Ace.” You also might want to register any Mandarin or Cantonese or Shanghainese, words that even sound like “Ace.” And then you should keep your ear to the ground and if you find people in China are calling your widgets by a name you have not yet registered as your own China trademark, you should register that too. Smaller companies with less money have to be more nimble.
In In China: Nomen Est Omen, IP Dragon sets out the alternatives companies face in deciding what to trademark in China, using Shell Oil Company as the example:
If Shell wants to sell its products in China they can do three things:
1. Register only its non-Chinese name, this is unwise, because it invites Chinese counterfeiters to jump into the vacuum.
2. Register a translation of the meaning of the mark — shell — into Chinese.
3. Register a transliterated or phonetic translated mark.
After you choose between these options or a combination thereof, you have to decide whether you want to register traditional Chinese characters (mostly used in Hong Kong, Macao and Taiwan) or simplified Chinese characters (mostly used in Mainland China and Singapore).
There are four primary considerations that go into deciding what to trademark. First, there are the legal issues, which should be handled by a lawyer. What is/are the best categories in which to file and what exactly should be filed? Second, there are the marketing issues, which should be handled by the marketing team of the company seeking the trademark. Thirdly, there are the Chinese linguistic and cultural issues that should be handled by someone both fluent in Mandarin (or maybe even Cantonese or whatever other language is being considered) and knowledgeable about Chinese marketing and culture. Lastly, there is the question of money as every additional filing will cost money.
In situations where a company is making product in China for export only and their product has the trademark on it only in English, securing just an English language trademark is usually enough. In situations where a company intends to manufacture its product in China and eventually sell in China, the company should weigh the costs and benefits of securing a Mandarin (or other language) trademark now, or just wait.
In almost all instances where our client’s trademark has actual meaning (such as the word “Shell”), they have chosen to trademark both the English and the Mandarin of the word. Rarely do our clients seek a China trademark in a language other than either English or Mandarin. Around 25% of the time our clients seek to secure the trademark for a transliterated or phonetic version of their English language trademark. Most of the time, they choose to wait and see how their product does in China and then, if it proves successful, they will come back and register more trademarks on it. Waiting also allows them to see exactly what the Chinese will call their product. The downside to waiting is that someone else may register the desired name in the meantime.
It is also important to remember that registering your trademark in the PRC does not protect you in Hong Kong, Macao or Taiwan, or any other country for that matter.