Firms vulnerable in trademark protection overseas

Updated: 2011-09-09 10:02


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BEIJING -- As Chinese enterprises pick up the pace to go global, they find themselves frequently challenged in protecting trademarks overseas.

In Sept 2004, Hisense Group, a leading home appliance maker in China, reported having its trademark registered by German industrial giant Siemens AG.

Beijing-based Wangzhihe Food Group discovered in July 2006 that its trademark and logos had been pirated by German food company Okai.

The increasing number of trademark infringement cases demonstrates Chinese firms' vulnerability in protecting trademarks abroad, experts said.

Wang Binying, deputy director general of the World Intellectual Property Organization (WIPO), called on Chinese firms to actively file international trademark applications through WIPO's Madrid system of international registration of marks, which allows a single international application for trademark protection.

"It is an important channel for Chinese enterprises to cope with the rising infringement crisis," he said at the ongoing 4th China Trademark Festival in Chengdu, capital of the southwestern Sichuan Province.

"Despite a rapid increase in Chinese trademark applications over recent years, Chinese firms still face rampant trademark violations in the overseas market," said Shen Chunxiang, who works with a Beijing-based law office.

ANTA Sports Products Chairman Ding Shizhong estimated that at least 15 percent of Chinese trademarks have been pirated abroad and that more than 100 infringement cases occur each year.

"Chinese firms have certain difficulties in protecting their trademarks in foreign countries as they are unfamiliar with local laws, cultures, and languages, and legal expenses are high," Shen said.

Chinese firms are also less aware of trademark protection, said Yuan Qi, an official with the Trademark Department of the State Administration for Industry and Commerce (SAIC).

SAIC figures show that foreign companies filed 154,000 trademark applications in China by 2010, while Chinese firms applied for 11,400 trademarks overseas.

China currently has 5 million effective registered trademarks. Though the country has the world's most registered trademarks, only one in every ten domestic firms possess one.

"It indicates that Chinese firms haven't realized the importance of trademarks and taken no count of their contributions," Yuan said.

He said few Chinese firms can successfully tackle malicious trademark infringements on the overseas market. They often give up their trademarks in local markets, or pay handsome fees to buy them back.

Nevertheless, some firms have gained valuable experiences from combating trademark infringement abroad.

Chen Lin, general manager of China's leading liquor maker Wuliangye Group, said taking legal action against intellectual property rights (IPR) disputes has protected the brand and won it fame on the liquor market.

The company is famous for winning a trademark infringement case in 2007, in which the manager of a pirated "Wuliangye" brand distributed in Incheon, Republic of Korea was sentenced to one year in prison.

"The price we have paid and successes we have gained all tell us that we should file international trademarks as early as possible. The sooner the filing, the sooner the benefit," Yuan said.

Shen urged Chinese firms operating abroad to register their trademarks as a preventative measure against trademark or IPR infringement, form specialized teams of both Chinese and local lawyers when managing IPR disputes, and seek as much government support as possible.

The Chinese government will strengthen cooperation with its foreign counterparts to help Chinese firms settle IPR disputes overseas and assist them in establishing IPR disputes institutions, Yuan said.