As reported by Reuters, China has announced plans to amend current laws to prevent companies from misusing world renowned trademarks and brands. The new measure is perhaps intended to restore the faith of the International business community with regard to dealing in China, which has long been considered a haven for intellectual property infringement and piracy.
The announcement of the new legislation follows several recent high profile disputes in China regarding the use of trademarks. Perhaps the most widely reported was Apple, Inc.’s dispute with Chinese company Proview Technology regarding the right to use the “IPAD” trademark in China. Proview, which had been teetering on the edge of bankruptcy, had used the “IPAD” trademark in the past for a product that is no longer sold. Nevertheless, Apple ultimately paid Proview $60 million for the right to use the trademark in China.
Apple has also reportedly encountered a number of fake “Apple” retail stores in China, which mimic authentic Apple retail locations and sell authentic but unauthorized Apple products, which have been smuggled into the country in order to avoid taxes.
Another recent high profile dispute involved Michael Jordan, who filed suit against a Chinese sportswear company that had purportedly built its business around Jordan’s Chinese name, “Qiaodan,” and his jersey number 23, without authorization. The company went so far as to even use the Chinese names of Jordan’s children on jerseys and other sportswear. The company allegedly brought in $270 million in revenue during the first half of 2011.
The proposed amendments to existing Chinese law will target “malicious” trademark registrations designed to misuse famous trademarks and brand names. The new law will reportedly give owners of well known International brands greater ability to prevent others from registering and using their trademarks, or similar trademarks, in China, even if such trademarks are not registered in China. The details of the proposed legislation remain murky and are to be debated by China’s legislature in the near future.
The United States and other countries have pressured China for intellectual property reforms for years. The latest announcement appears to be part of a recent trend of the Chinese government to begin to address rampant infringement and counterfeiting. For example, in a recent blog post, we reported regarding a joint effort by the United States and China to crack down on counterfeit bags. It remains to be seen, however, whether the latest measure will result in true reform, or whether it is merely intended to provide assurance to International businesses of their ability to operate fairly and successfully in China.
