In a fashion law first, luxury men’s wear label, Michael Bastian, has won the right to use its trademark in China despite the trademark being registered by a ‘trademark squatter’ back in 2007. China is a ‘first to file’ trademark jurisdiction meaning whoever registers the mark first is the owner. However a new law, which came into effect in 2014, states that applications for registration and use must be made in good faith. In its ruling, the Chinese Trademark Review and Adjudication Board in Beijing found that the defendant had filed many applications for other brand names and that the behaviour amounted to an abuse of the honest and good faith provision and thus violated the trademark registration requirements.
Bastian is far from being the only celebrity or brand to discover that its name has been trademarked in China by an unrelated party. As many designers expand into China, they are discovering that their names have already been registered as trademarks by individuals hoping to extort money from them. The cost of registering a trademark in China costs in the region of £2000 but many designers are paying between £100,000 and £150,000 to buy their name from squatters. Previously, if a designer could not demonstrate that they have a sufficient global reputation in China to supersede the third-party trademark, or prove the trademark had not been used, then they either had to consider using a different name in China or pay to regain their rights to the name. It is notable that in this instance Michael Bastian produced little evidence it had used the trademark or that it had a presence in the Chinese fashion market.
The Kardashian sisters don’t sell their clothing and perfume in China, yet their names are already trademarked by Chinese businesspeople looking to profit from enterprises that want to tap China’s booming retail market. Similarly, although Hermès had filed its French brand name in China back in 1977, it did not register the Chinese character equivalent and it has recently lost a court case against a clothing company which was found to have validly registered the Hermès Chinese brand name.
Further problems suffered by designers can arise if a Chinese firm has registered the name in a different category, resulting in designers facing the prospect of sharing its name. One Chinese business is reportedly making underwear under the label of Theo Fennell, the name of the renowned London jewellery designer.
Bastian has stated; “This is a huge decision that provides a sense of confidence for foreign celebrities entering the Chinese market. Specifically, it allows me to freely use my name and IP to build out my brand in China. The fashion conscious public in China will now know that Michael Bastian apparel and accessories offered through my channels are the real thing. I hope this sets precedent and makes it easier for other fashion designers and members of the creative community to regain and protect their IP in China.”
The decision will be met with delight by all those fashion designers who now won’t have to pay trademark squatters to use their own brand names! Remember, if you have plans for international expansion, registering your brand’s trademark across a range of jurisdictions is paramount! For more information on trademarks, see our seven most frequently asked queries on trademarks here!