Trademark Squatting in China: Michael Jordan and Hope for Other Brands

Earlier this month, China’s Supreme People’s Court passed down a decision in favor of basketball star, Michael Jordan. Jordan had been waging a four-year battle with a Chinese sporting goods company, Qiaodan Sports Company, Ltd. (“Qiaodan”). In finding for Jordan, China’s Supreme People’s Court held that “Jordan” in its Chinese character equivalency still referred specifically to Michael Jordan, and as such, the Supreme People’s Court declined to maintain protection of the Qiaodan’s trademark that had been registered for use in multiple classes in connection with Jordan’s surname. In finding for Jordan, China’s Supreme People’s Court overturned the previous ruling of a lower court that had granted the protection to Qiaodan.

Despite this, however, China’s Supreme People’s Court declined to extend protection of the mark to Jordan’s phonetic Chinese equivalency, “Qiaodan,” stating that Jordan had not established any link between himself as the star athlete and the Chinese phonetic spelling.

As such, while Jordan has achieved victory in his trademark claims, the win can only be considered a partial win, and as a result, many other famous brand owners that are facing current situations may not automatically rely on this recent verdict as finite change in the Chinese trademark system. Because the Chinese trademark law favors “first-to-register” as opposed to the “first to use” trademark registration system used in the United States, trademark squatting has become rampant in China.

Many famous brand owners, including President-elect Donald Trump, have often had difficulty with the Chinese trademark office once they begin waging with trademark squatters. As such, many legal practitioners have begun to counsel clients in the necessity of registering not the original mark in its native language, but suggest also registering the mark in both its Chinese character and phonetic equivalencies.

While many applaud this recent legal victory, experts in the field note that the case does not provide much guidance in terms of deterrence or damages. Because China’s Supreme People’s Court declined to announce any penalties for the violation, many experts feel that the holding will have little impact on curbing the overall practice of trademark squatting. As trading off or palming off a famous trademark’s goodwill can be incredibly lucrative, the lack of penalties may do little to deter would-be trademark counterfeiters or pirates.

While this victory is a win for Jordan, the basketball superstar is still embroiled in other Chinese trademarks concerning his famous brand, and as such, must continue pursuing rights of exclusivity to his name in the Chinese trademark arena. As Jordan and the appeal of other famous brand owners’ continue to make their way through the Chinese appeals systems, legal practitioners should counsel their clients regarding the new fees structure and changes in it equivalences of their brand names when the budget permits.

For more information on this topic, please visit our Trademark Protection service page, which is part of our Trademark Practice.

Klemchuk LLP is an Intellectual Property (IP), Technology, Internet, and Business law firm located in Dallas, TX.  The firm offers comprehensive legal services including litigation and enforcement of all forms of IP as well as registration and licensing of patents, trademarks, trade dress, and copyrights.  The firm also provides a wide range of technology, Internet, e-commerce, and business services including business planning, formation, and financing, mergers and acquisitions, business litigation, data privacy, and domain name dispute resolution.  Additional information about the trademark firm and its trademark attorneys may be found at www.klemchuk.com.

Klemchuk LLP hosts Culture Counts, a blog devoted to the discussion of law firm culture and corporate core values with frequent topics about positive work environment, conscious capitalism, entrepreneurial management, positive workplace culture, workplace productivity, and corporate core values.

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