INSIGHTS
As China’s trade mark system operates on a ‘first to file’ basis, foreign brand owners that do not register their own marks can often come up against ‘trade mark squatters’ who secure a registration before the brand owner, and who sometimes seek to sell it to the brand owner at significant cost.
Treasury Wine Estates, owner of iconic Australian wine brand Penfolds, recently enjoyed a major win over a trade mark squatter in China.
Back in 2009, the squatter had registered the Penfolds transliteration BEN FU in relation to wine and wine-related services. This registration was secured despite Penfolds being known to Chinese consumers as BEN FU, due to the ‘first to file’ system and the fact that Treasury had not obtained registration of BEN FU in China before 2009.
Treasury rightly objected to this. In 2012 they challenged the registration, arguing the squatter had registered BEN FU in bad faith and had not genuinely used it in relation to wine or wine-related services. In January, the Beijing High People’s Court ruled the squatter’s mark should be cancelled.
This significant victory will allow Treasury to continue marketing its wine in China under the BEN FU mark. But this type of success has been the exception rather than the rule for foreign companies in China.
For Australian businesses exporting to China, it is critical to get on the front foot with brand protection. The key to any effective brand strategy is securing effective trade mark protection, and this includes protection in languages other than English where foreign countries are concerned. In China, this would mean securing protection of a brand in both English and Chinese characters. Those who don’t proactively register their own marks in China leave themselves vulnerable to brand hijacking.
- Stuart Green is a partner specialising in branding and trade marks at DibbsBarker. This article contains general commentary only. It is not legal advice and must not be relied upon as such. Readers should obtain specific advice relating to their circumstances.
