The Problem with Online Trademark Services for China
Once or twice a month, my law firm’s international trademark lawyers are contacted by companies whose China trademark registrations were mishandled by online trademark services.
In all instances, the registration problems stem from online services claiming they can register trademarks globally, including in China. These claims are often misleading.
Incompetence and Deception
Without naming names, most botched trademark filings come from a few companies. These services give the impression of having lawyers on staff in every country they operate in, but they do not, and they are not law firms. They are inexpensive but usually incompetent, or worse.
Frequent Failures
These online services take your money and do only what you ask, regardless of whether it will succeed. They underpay local agents and lawyers to submit your application, or sometimes they fail to submit it at all. While it is impossible to know the full extent of their failures, the consistent mistakes we see suggest it is frequent.
Common Trademark Filing Mistakes
Common mistakes include filing trademarks that any competent China trademark lawyer would know would be rejected. Despite the predictable outcome, these services take the money and submit the application. We have seen rejections for trademarks that are too sexual, religious, or generic, and for including place names, all of which are not allowed in China. A competent lawyer would have identified and corrected these issues beforehand.
Higher Overall Costs and Other Damages
Some companies only lose the cost of the failed trademark, but others face higher costs. One American company only discovered its rejected trademark when a Chinese company registered its brand name. This forced the American company to either stop manufacturing in China or fight a likely losing battle for its trademark.
We also see trademarks rejected because they are already taken. This means companies pay for unnecessary applications instead of conducting a cheaper initial search. The delay in discovering the issue wastes time that could be spent finding a new name or a workaround, and companies risk trademark infringement lawsuits or having their products seized at the border.
In two cases, trademark applications were never submitted. In one, the service admitted the mistake after six months and offered a refund for confidentiality. In the other, the service falsely claimed the application was rejected.The financial consequences of relying on online trademark services can extend far beyond the cost of a failed application.
One Of Many Stark Examples
While many companies merely absorb the loss, others face significantly more severe repercussions. Consider an American apparel company (this is a true story, but the names have been changed to protect the innocent), “Bountiful,” which produces a popular line of men’s casual shirts. After entrusting an online service with securing a Chinese trademark for “Bountiful Shirts,” the company received a rejection due to the generic nature of “shirts.” Unbeknownst to Bountiful, a rival capitalized on this oversight by successfully registering the trademark “Bountiful” in the relevant class. Bountiful eventually concluded that it needed to cease Chinese production rather than change its brand name for its made-in-China shirts, and it spent a small fortune moving its production to Vietnam.
This stark example underscores the critical importance of professional trademark guidance, as the potential loss of intellectual property can have far-reaching and financially crippling consequences.
Protect Your Brand from China
Protecting your brand or logo with a China trademark is one of the most important things you can do, and it requires a legitimate law firm capable of doing more than just following your instructions.
Many companies make the mistake of assuming that registering a trademark in their home country or other major markets automatically protects their brand in China. This is not the case. China operates on a “first-to-file” system, meaning the first person or entity to register the trademark owns it, regardless of prior use elsewhere. This makes it crucial to secure your China trademark before entering the Chinese market or even starting negotiations with potential partners or manufacturers in China.
More Lawyer Scams and Incompetents
For more on lawyer scams and incompetents proliferating online, check out China Contract Drafting Scams: From Bad to Much Worse. I will also soon be writing about how service of process companies (not lawyers!) charge small fortunes to accomplish Hague Service of Process in China (and elsewhere), but have little to no clue on how to actually accomplish that.
