President Trump’s IP battles in China

President Trump’s recent trademark applications in China have sparked a new wave of ethical concerns in the US. But like many foreign businesses and global brands, The Trump Organisation needs to come up with a sound trademark protection strategy.

Chinese IP specialist firm Chang Tsi & Partners has assisted US president Donald Trump with the application of 42 new trademarks in China, 38 of which have received preliminary approval.

The 38 trademarks of Trump’s Chinese and English names cover a wide range of business sectors, including financial services, hotels, insurance, real estate, restaurants, golf clubs, childcare and aged care.

The website of China’s Trademark Office of The State Administration shows that it granted provisional approvals to nine applications on 27 February followed by 25 more on 6 March 2017.

Under China’s trademark law, all applications are subject to a 90-day public notice period following provisional approvals. If no one objects in that time-frame, these trademarks can be formally registered.

It is understood that Chang Tsi & Partners founding partner Spring Chang was the lead lawyer working on the applications, which were filed in April 2016 and have only just received preliminary clearance. The firm has 12 partners and 200 fee-earners, providing a full range of IP related legal services. The main bulk of its clients being foreign companies and global icons, with Lady Gaga and Linkin Park are among a list of well-known celebrity clients.

“The trademark applications by Trump and his family’s business group have caused serious political debate in the US over potential conflicts of interest under his presidency.”

The wide range of trademarks gives away the great business interest of Trump’s family enterprises in China. It is particularly controversial in the context of Trump’s public accusation against China of “raping” the US during his presidential election campaign and his policies under an “America First” strategy.

In addition, US ethics lawyers are reportedly concerned that China could have fast-tracked Trump’s applications as a favour to potentially help the government gain leverage over the US president.

But political issues aside and from a legal point of view, Trump’s rush to register trademarks in China also highlights foreign businesses’ long struggle with effective IP protection in China.

It has emerged that Trump lost a lawsuit in China in 2015, relating to a 10 year dispute over the “Trump” trademark in the construction and real estate sectors.

In the administrative litigation against the China Trademarks Office’s decision to grand the mark to the Chinese individual, Trump instructed another Chinese IP specialist firm – Unitalen Attorneys At Law. Beijing-based Partner Zhou Dandan led the firm’s legal representation for the plaintiff. Unitalen is thought to have also helped Trump with trademark filings in China in the past.

The dispute started in 2005 when a Chinese individual, Dong Wei, applied for the Trump trademark in that specific category two weeks before Donald Trump’s application. China’s trademark law adopts the first to file principle, which grants trademark rights to the party that applies to register the market first in China.
This strategy has led to widespread trademark squatter and infringement issues for well-known global companies and celebrities, threatening future businesses in China. In response, foreign trademark owners are advised to file trademarks in China even before the actual business expansion as well as in none-core business areas as a defensive strategy.

According to statistics found on Trademark Office’s website, despite Trump’s effort in filing trademarks in China, there are a considerable number of trademark registrations relating to Trump’s English and Chinese names that are owned by Chinese individuals and companies, including a toilet manufacturer.

A short history of Chinese trademark battles

Apart from President Trump, US tech giant Apple and sports star Michael Jordan were also embroiled in high profile, lengthy trademark litigations.

Apple had to pay a $60m settlement after losing its iPad trademark litigation against Chinese company Proview in 2012. Apple was represented by King & Wood Mallesons while Proview instructed Grandall in the appeal case before Guangdong’ High Court.

American basketball legend Jordan had better luck. Last year, he won a Supreme Court case against Chinese manufacturer Qiaodan Sportsware, marking an end to a four-year legal battle to obtain the trademark rights to his name in Chinese characters. He sought out China’s elite firm Fangda Partners to advise him on the litigation.

The SPC decision, although not a complete victory for Jordan, is far more positive for trademark proprietors looking at China as a jurisdiction to do business, according to international IP lawyers.

But instead of waiting for disputes to arise, like Trump’s Chinese IP legal counsel Chang told the media, she advises clients to take out marks defensively, even in categories or subcategories of goods and services they may not aim to develop.

According statistics published by The Guardian, Trump’s companies have filed for at least 126 trademarks in China since 2005. That’s a part of a vast portfolio of trademarks around the world.

Trump’s IP protection awareness is also well documented in the US. For example, most recently, the US president instructed New York-based IP lawyer Patrice Jean from Hughes Hubbard to file trademark applications for his slogan for the 2020 re-election campaign, “Make America Great” and “Make America Great Again!”.

It will be interesting to see (and surely highly scrutinised in the near future) if the commercial potential of all the Chinese trademarks will materialise during his presidency.