One would think that based on the Intellectual Property treaties that United States (“US”) has with several other countries, that their brands would be offered at least some sort of reciprocity protection overseas. However, this is not the case. Marks that are considered registered trademarks with the United States Patent Trademark Office (“USPTO”) are offered substantial amount of protection nationwide, but not abroad because trademarks are considered territorial. In order to obtain protection abroad, US trademark owners need to file for trademarks in each specific country. Contrary to some people’s belief, a worldwide trademark does not exist.
The main treaty, which is associated with trademarks between the US and other countries, is under the World Intellectual Property Organization called the Madrid Agreement. There are currently 121 countries that are members. This treaty allows for foreign trademark owners to apply for trademarks abroad (only to member countries) through a unified system for a specified fee.
Many brand owners fail to see the value in obtaining foreign trademarks until a problem arises. A common issue that occurs on a daily basis is the hijacking of trademarks abroad by foreign “squatters”. Individuals within countries such as China can register your trademark(s) in their country without the necessity of showing actual use. China’s “first to file” trademark law means that a rapid filing by locals can stop the actual brand owners from doing business in China. Essentially, these hijackers register the trademark(s) for the hope of being paid out by the rightful owner(s) or using the likeness of these brands in order to build their own profitable brands in China.
If an American company chooses to manufacturer its goods in China and they
have not obtained trademark registrations for their marks/brands in China, but a local “squatter” has, the American brand owner would not be able to sell its products in China because they would technically be counterfeiting, as well as, would take the risk of having their goods seized in customs before the goods ever leave for the US. For the foregoing reasons, several American known companies have paid large sums in order to regain the rights to their trademarks in China.
For example, in 2012 Apple paid $60 Million Dollars to retrieve the right to use its iPad trademark in China. On the contrary, Michael Jordan currently has not been able to retrieve his marks, “23” and Air Jordan’s “jumpman” logo, back in China regardless of all his legal efforts and lawsuits. A Chinese company constructed its entire brand around Michael Jordan’s identity, going as far as using the names of his sons, Jeffrey and Marcus, in Chinese. In 2016, Michael Jordan was able to win the rights to his name in Chinese script but court ruled that the Chinese company can still use the phonetic version of his name in English. Hence, the legal system and rules in China seem to be part of the big problem. To take it to the next level, such imprudent trademark laws make it possible for counterfeit goods to be manufactured in and exported from China without any ramification.
So if a brand owner wants to truly protect their brands and logos, they shall file for trademarks in all the countries they wish to do business in. Long-term vision always wins.
If you have any questions, please feel free to contact me at:
The Law Office of Biana Borukhovich, PLLC