China has made moves towards discouraging companies that have been exploiting China’s current trademark laws, allowing them to misuse branded names in a manner that the government has deemed ‘malicious’. The decision to make modifications to these laws has come to light after China received complaints from international companies and agencies.
Issues regarding branded names have largely been caused due to the vague nature and poorly articulated phraseology in current laws, which have triggered a number of lawsuits. One of the more popular cases have been the case regarding the Chinese company, Proview, which sued Apple for the use of the name ‘iPad’. The company, which owned the rights of the name in China, had sold the rights to a subsidiary of Apple. In the end, Apple agreed to finally settle the dispute and pay Proview $60 million.
In other similar incidents, Michael Jordan sued a Chinese sportswear company for the use of his name, and Hermes International, a French luxury brand, had also lodged complaints regarding trademarks. China has proactively decided to prevent this messy explosion of lawsuits by amending current trademark laws. One proposed amendment has been to shift the power balance towards the trademark holder and permit them to ban the unauthorized use of their logos or names, both similar and identical, if they so choose to. While nothing has been absolutely confirmed as yet, Reuters has reported that the country legislature will be congregating in order to discuss the proposed amendments this week.
While these proposed changes will serve to prevent frivolous lawsuits in the future, analysts are questioning the subtler motives behind the move. China has long suffered a reputation of harbouring an environment supportive of piracy and trademark infringement. It is possible that this move is China’s statement to cleanse its reputation and establish itself as a more legitimate business destination for globally recognized companies. Aside from this, the move may also serve to encourage international companies to approach China for business and, consequently, boost China’s economy on that front.
These amendments need to be carefully evaluated, however, and must ensure that they work towards repairing the equilibrium established between trademark holders and those seeking to use those trademarks. The case between Apple and Proview continues to be debated with some supporting Proview’s stand against Apple for stripping its right to discriminatory pricing, and some supporting Apple, pointing out that Proview was at fault for not properly researching who it was selling its trademark to.
