The Australian wine company has been selling wine in China through local distributors for several years without incident. This week, they found that a Guangzhou-based company has registered their trade mark in China, and is suing two of their Chinese distributors for trade mark infringement. The distributors have been ordered to appear in local court this week.
As if this wasn’t bad enough, the squatter has also recorded the trade mark with Chinese customs, which could allow them to seize shipments of the Australian company’s wine entering Chinese ports.
Why is the Guangzhou company doing this? Most likely to build leverage to sell the trade mark back to the Australian company for a huge sum, or to use the trade mark on their own counterfeit or copycat wine products.
A situation like this is much harder to fix than it is to prevent.
There are two main lessons to take away from all this.
First, if you’re contemplating doing business in China, register your trade mark in China as early as you can – well before you enter the market. China has a first to file trade marks system, which means the first person to file for a trade mark gets it. A registered Australian trade marks attorney can help you apply for your trade marks in China and other overseas markets.
Second, using your trade mark in Australia doesn’t necessarily mean you can use it in China without problem. You should check for similar or identical existing registrations that could pose a problem for your business. Our Guide to searching the Chinese trade marks register can help you do a preliminary check yourself, and a trade marks attorney can do a professional search.
Operating in China without a registered Chinese trade mark is risky, but operating when someone else has registered your trade mark is just dangerous.