Currently, preemptively registered trademarks become a hot topic reported by the media and discussed by the public, including iPad trademark disputes between Shenzhen Proview and Apple and the lawsuit concerning the infringement of basketball superstar Jordan's name right.
Nevertheless, the cases of rush registration by some enterprises could not distinctly reflect the status quo of domestic enterprises in terms of trademark development. Enterprises in China have also been bothered by the same problem when doing business in foreign countries. For instance, the trademark HiSense (海信) was preemptively registered by Siemens in Europe in September 2004; the trademark WANGZHIHE (王致和) owned by Beijing Second Business Wangzhihe Food Co., Ltd. was preemptively registered by a German cybersquatter; Lenovo China was also forced to change its trademark from Legend to Lenovo as Legend was extensively registered in foreign countries and the company had to spend heavily on promotion of Lenovo. Of course, far more than the above three Chinese companies have suffered from rush registration.
Furthermore, fewer enterprises have paid enough attention to trademark protection in domestic market. Take furniture industry for example, a survey of 2011 indicates that in Guangdong, where furniture industry flourishes, of all the 2,000 sample enterprises, less than 30% have ever submitted trademark registration applications to the administrations of industry and commerce; only 221 have obtained approved trademarks to date.
In stark contrast to enterprises with weak trademark awareness, some businesses wish to make profit from speculation in trademarks. In Jinjiang, a city of Southeast China's Fujiang province where a large quantity of sports shoes and sportswear are manufactured, besides Jordan, there are a lot of contentious trademarks such as Kobe, Yaoming and Yijianlian which have no relationship with those sports stars. In addition, a number of pseudo trademarks parodying some famous brands emerge in the market.
As a business competitive strategy and a business model, rush registration, to some degree, has its own rationale, but it is not suitable for Chinese enterprises whose trademark development is still at an immature stage. On one hand, "cottage" may make a negative impact on made-in-China products and restrains innovations; on the other hand, the short-sighted approach might bring potential risks to enterprises in the process of listing and overseas expansion.
The author of the article believed that Chinese businesses should take defensive actions and file trademark registration applications domestically and internationally to avoid being cybersquatted and suffering economic losses once a brand is set up.
Owning a legitimate trademark is the first step to build a brand, but not the last. The word "brand" comes from the ancient Norwegian word "randr" which means mark and impression. At that time, western nomad put different marks on horsebacks to distinguish his own property. When talking about the concept of modern brands, brand holders need to put the mark and impression into consumers' minds. To ultimately impress consumers and win their trust, preference and loyalty, trademark owners have to make persistent efforts.
To sum up, many Chinese companies are not capable of building self-owned trademarks due to a lack of such experiences, and they have been relying on the OME business model for quite a long time. In the process of brand building, businesses might make mistakes such as ignoring the trademark rights and neglecting trademark protection, copying foreign famous marks, selling similar products and designs at lower price to compete in the market, gambling on distributors' support, lacking systematic trademark strategies and schemes and depending on advertisement promotion.
Trademark issues are closely related to brand building. Chinese enterprises are facing restructuring when brand building becomes the mainstay of competitiveness in domestic and international markets. At the same time when trademark cybersquatting is mentioned, many problems occurring in the process of brand building should be duly considered.
(Source:IPR in China)
