It's a brand owners worst nightmare. After all the careful planning and preparation for market entry, creating a brand and voice that connects with your customers is China, finding that your labor of love has been taken from you can be a distressing and anger-inducing experience to say the least...
Discovering that someone has already registered your trademark in China can at first appear to put the brakes on your market entry plans, but with a clear head and some practical tips, the situation can be managed and resolved effectively.
First of all, it's best to understand that we're currently at an intense nexus point of various different elements influencing the Chinese trademarking environment (Get yourself up to speed with our related article on this), giving rise to the nefarious 'Trademark Trolls' (We covered them in this article)
It's also important to note while it may appear that the cards are stacked in favour of the trademark squatter, the Chinese governments' approach is slowly starting to change.
Taking back control isn't quite the brutal fight to the death it once was, but you still need to prepare, prepare, prepare.
The steps you need to take
1. Understand who has registered your trademark.
This will give you a clue as to their motivations (see our related article highlighting most likely people to steal your trademark in China). This will then give you a firmer understanding of what it might take to get back control. Are they:
- A disgruntled employee looking for some settlement?
- A distributor looking for leverage in a deal?
- A professional troll, committed to driving the highest price?
Before doing battle, know your enemy.
2. Don't be deterred from market entry
The first reaction we often see can be, understandably, to halt any market entry moves for fear of further claims of trademark infringement.
However it is possible to continue your market entry and negotiate back at the same time.
If the squatter then threatens to sue for trademark infringement, and it's proved they they have only registered the trademark with the intention of selling it back to you, they may be guilty of blackmail, an illegal act.
3. Partner with a local, trusted agent to help negotiate
Unfortunately, as proud as your legal team may be with their strongly worded communications as they deliver it to your nemesis, it often doesn't carry quite the impact you'd expect.
However, when it's clear that there is a local company involved in the dispute with in depth knowledge of Chinese regulation, able to pay them a visit in person and speak the local language, the challenge you present becomes much more effective and the less likely they are to try to flummox you with half-truths and faux-legal jibber jabber.
3. Ensure your trademarks are up to date in other territories.
When making legal claims in China, if your trademarks aren't up to date for territories such as the EU, and differ from what you're trying to claim ownership of, this little chink in the armour could help your adversary claim that you have no ownership elsewhere.
Ensure all aspects of your brand that can be trademarked are registered and give as little wriggle room as possible for anyone to claim that you don't have ownership of any part of your brand.
4. Be persistent - Keep your focus on reaching a deal at all times
It's very easy to let emotions take over and rule your approach, with every fibre of your being telling you 'not to deal with these types of people' or feeling like you're giving in to demands from pirates.
If you approach this with the understanding that no laws have actually been broken, and the ultimate aim of a trademark squatter is to reach a deal, with a cool head and a little persistence, it is possible to achieve a palatable result.