Doing business in Asia – Trading on your good name

What do Jimmy Choo, Michael Jordan and Elon Musk have in common? Not much it would seem, apart from being male and rich. But they do share a common bond: their company brands have all come under serious attack in the huge Chinese market.

doing-business-in-asia

Elon Musk honoured the memory of 19th century Czech engineer, Nikolas Tesla, by naming his luxury electric car after him. Musk had big expansion plans for Tesla in China, but entrepreneurial businessman Zhan Baosheng saw him coming.

In 2006, Zhan set up his own ‘virtual’ electric car company under the Tesla brand, and was able to register many Tesla brands and domain names in China. This was possible because of the ‘first to file’ principle under Chinese trade mark law. Zhan then offered to sell the rights back to Tesla for US $3.85 million.

Eight years of litigation and an undisclosed cash settlement later, Zhan released the rights and the real Tesla car company was finally clear to enter the Chinese market.

Referred to as ‘Qiaodan’ (pronounced: Chee-ow dahn), former Chicago Bulls superstar, Michael Jordan, remains the most famous international basketballer in China.

Well before Jordan’s entry into the Chinese retail marketplace, a sportswear company set up in Fujian under the name Qiaodan Sports Co. It registered the pinyin version of ‘Qiaodan’ as its trade mark, together with a logo very similar to Jordan’s ‘jumpman’ and used Jordan’s playing number, 23. The business grew to run 6000 shops throughout China.

This would appear to many business people to be an open and shut case of brand and identity theft, but that’s not how it played out in the Chinese legal system.

Since 2012, Michael Jordan has been trying to have Qiaodan Sports Co’s now more than 60 trademarks revoked, without notable success. Qiaodan‘s lawyers argued that ‘Jordan’ is a common American name and therefore the pinyin version is not protectable, and that the face on the Chinese ‘jumpman’ logo did not look like Jordan. The matter is now before the Supreme People’s Court and a decision is imminent.

Jimmy Choo Ltd has just fought a cyber-squatting dispute at WIPO over domain names jimmy…choo.org and jimmychoooutletsale.org. Websites owned by a Chinese resident known as Panluzhong were operating under these domains, selling items closely resembling genuine Jimmy Choo products, at heavily discounted prices. But Jimmy Choo was prepared for this sort of problem in China and had previously registered its ‘Jimmy Choo’ trademark there.

The WIPO (World Intellectual Property Organisation) arbitrator ruled that the jimmy…choo.org and jimmychoooutletsale.org domains were confusingly similar to the ‘Jimmy Choo’ registered trademark and, accordingly, revoked the domain registrations. A good result in comparison to the China experiences of Elon Musk and Michael Jordan.

The lesson here is clear – a little time and money spent on strategising about brand protection for the future can go a long way, especially if you are planning to trade in Asian markets. This applies to businesses of all sizes, not just mega businesses such as the foregoing examples.

There’s nothing more frustrating (and expensive) than seeing competitors profit illegally from your brand-building efforts!

If you have any questions or would like further information, please feel free to get in touch with us at info@battersby.co.nz.

Contributed by Mike Battersby and Lyn Pham of Battersby and Co Business Lawyers (www.battersby.co.nz )

 

One Comment

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