Wednesday07 December 2022

China against trademark trolls

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China intends to change some of their legislation to prevent local businesses from maliciously appropriating the commercial names of world famous companies and products. The owners of global brands have the right to prohibit the unauthorized registration/use of their names and logos in China. [It is not just world famous brands though as it is a common practice to try and register almost any name that is not registered globally – Ed]

Before it used to be popular to register a domain with one's brand name or brand commercial and then blackmail the legal brand owner. Today this kind of person has been replaced by the “trademark trolls” that operate with brands (commercial brand names) that have been registered. However, many of them actually do not use it or have no intention of using it, they prefer waiting for an opportunity to pop up when the brand will be well worth it.

One of the most famous cases is the one in which a Chinese manufacturer of monitors and other devices Proview sued Apple for $ 1.6 billion to make it impossible to use the iPad brand in the Chinese market. The whole thing started when the Taiwanese subsidiary Proview sold Apple the rights to use the name iPad in 2006 through a third-party company for only $55,000. However, the Chinese subsidiary later said they did not formally transferred rights. Apple sued Proview claiming that they conspired to later get financial compensation. The Chinese court has decided that the Chinese subsidiary is not required to transfer the rights to the name IPAD so Apple first offered $ 16 million. Proview said that that is not enough, because they already had debts of up to $400 million. In the end they settled the lawsuit for $60 million.

[Ed – Although the Proview case was unusual it also needs to be noted that Apple used a shell company that claimed they only wanted the Trademark because it matched their name (Intellectual Property Application Development). They further claimed that the trademark would not be used to make any product or to compete with Proview in anyway. This was a false claim as the name was going to be used for Apple’s personal device.  Proview’s Taiwanese subsidiary also did not own the rights to the trademark in China so Proview’s claims against Apple were actually quite valid. In the end Apple paid simply because they knew they would not win the case. Now the laws are being changed to favor companies like Apple that are often just as unethical and dirty as the cyber squatters were at cheating people out of what they are due…]

Do you think these laws are going to change things for the better? Tell us in our Forum

Last modified on Wednesday, 26 December 2012 21:24

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