Chinese "Trademark Trolls"

There have been many recent articles about “patent trolls.” We previously noted Professor Epstein’s article “Trolling for 'Patent Trolls'” here. But in China, there are also “trademark trolls.” In the 21 June 2013 issue of New Hampshire Bar News, Attorney Teresa Tucker writes:

[The] “first to file” trademark system in China has allowed for a growing trend of “trademark trolls” – Chinese companies or individuals who strategically register trademarks belonging to others who have delayed or failed to register their marks in China. By registering, these trolls become the lawful owner of the hijacked trademark. As a result, they can then demand large sums of money to sell the mark back to the original owner, or worse, bring an infringement action to enforce their rights as the lawful owner of the registration against the original owner, who has made plans to use its mark or has already invested in using the mark in China.

Tucker’s advice for US companies:

Entities and individuals that do business in China, either by selling or sourcing products, should be aware of the advantage of promptly registering their trademarks in China, including in Chinese characters. Ideally, this should be undertaken before products are sold or manufactured in China.

If is it discovered that a trademark has already been registered by a third party, steps to obtain the cancellation of that registration, to the extent available, should be considered. Until the law is reformed to quell the abusive practices of trademark trolls in China, the best offense remains a good defense.

Apparently, China is working to address the problem by amending its current trademark law. But Tucker warns:

The new law is not expected to go in to effect for many months and may be amended before promulgation. It is not expected to be retroactive. Nor is it expected to have a great impact on the “trademark troll” situation, unless the troll has had some kind of relationship with or resides in close proximity to the trademark user.

The entire article is available here.