Comments on the Trademark Squatting of HERMES

Another Lesson from the Negligence of Trademark Localization

It’s reported (note: the link is in Chinese) that the well-known luxury brand HERMES INTERNATIONAL has registered its international trademark of HERMES in China as early as in 1985, while its official Chinese name 爱马仕 is unregistered. While, on the other hand, Dafeng Garment (the “Dafeng”), a clothing company admitted in Foshan City of Guangdong Province registered the Chinese trademark of爱马仕 in September of 1995, though it was disputed later in 1997 and 2001, Dafeng still owns the right of the trademark. In 2009, HERMES INTERNATIONAL registered爱马仕 in the class of tie manufacture, which was refused by the trademark office and remained rejected by the Trademark Review and Adjudication Board (the “Board”) after the review procedure. After that HERMES INTERNATIONAL filed the lawsuit against the Board, but finally the court supported the decision made by the Board.

It’s another trademark dilemma of international brand after that encountered with iPad. What’s more similar is that the administration and the court did not choose to stand with the international brands, then could it be kind of discrimination of China laws and regulations? Or the consequence mainly results by the poor trademark strategy of the company? Here’s our analysis on it.

I. the right decisions made by China courts

The application of trademark in China shall subject to the principle of “first application”, which means the first one applying the trademark shall be normally first granted the trademark right. Surely, it otherwise regulates in the Trademark Law that a well-known trademark may against the first registered ones.

In HERMES INTERNATIONAL’s opinion, the doctrine shall also apply to it for the Chinese trademark of爱马仕 was earlier used than Dafeng and could also be established as a well-known trademark. Nevertheless, it’s legally provided in the Trademark Approval Standard (the “Standard”) promulgated by the Trademark Office that the well-known trademark shall be established for its reputation before the application of the disputed trademark, otherwise it could not against any first application, just like that of HERMES in the case.

Dafeng registered爱马仕 as early as 1995, regardless of its motivation, the trademark is effectively registered by law and has thereby granted the exclusive right. Therefore, HERMES INTERNATIONAL’s only option is to demonstrate the well-known of爱马仕 in the mainland China before 1995. However, as researched by us, the first HERMES boutique was set up in 1998 in Beijing, before that in 1995, the brand is only noted in a small circle for the economy in the mainland China is less developed. And for this reason we think the sentence by the court is right. Surely, the laws in China may be uncertain, for instance the court in Shanghai once supported Starbucks in a lawsuit against a café using the Chinese translation name of Starbucks but set up earlier. The conclusion of us is to bring the lawsuit to Shanghai court, where Bridge IP Law Commentary is situated. However, to HERMES case, for the domicile of the Trademark Office and the Trademark Review and Adjudication Board in Beijing, it’s less possible to file the lawsuit in Shanghai.

II. The strict enforcement of trademark law may make the laws impracticable

Actually, it’s not a sole case for many international brands or big names have met with the same strait. Such as “布兰妮”, the Chinese translation of Britney, or “乔丹”, the Chinese translation of Jordan (note: both links above are in Chinese), for Britney Spears could not stop the first one’s application and neither could Nike who owns the trademark of Air Jordan to the latter one, and they both lost their actions to protection the legal rights.

Why international brands have encountered their Waterloo in China concerning their trademark? In our opinion, it may come from the over-strict application of the law to foreign objects. To take the trademark of 乔丹 as the example, the Standard says promulgated by the Trademark Office says that any trademarks as same as others’ names and have damaged other’s name right or with such capability shall not be registered as a trademark unless written approved by others. Moreover, it’s further regulated in the Standard the “same” shall refer to “the same words with others name or the translated name of others which may lead to the confusion of the recognition”. But even as famous as Michael Jordan could make the Board take the article, for the Board has determined that 乔丹 is not exclusively corresponding to Jordan, and with such determination the free riding will not be prevented by the administration but be legalized. But the adjudication of the Board has been widely criticized by the public, and we could see almost an overwhelming support to Michael Jordan on the media and SNS communities.

In our opinion, the trademark administration shall not be the Ostrich to such cases, and to demand the demonstration of the righter mechanically, but shall take the common sense and wide adopted understanding from the public into its consideration to determine the facts, like the reputation of Britney and whether Jordan shall correspond to 乔丹, therefore the frustration of the law could be avoided.

III. the localization of international brands is essential

Back to HERMES’s case, Bridge IP Law Commentary once posted “Could There Be Any Improvement on Facebook’s Trademark Application Strategy in China?” in which we analyzed the importance to the localization of the international brand, the case of HERMES of this time is definitely another lesson. The trademark of HERMES was registered in 1985 and afterwards the Chinese trademark 爱马仕 was adopted in Hong Kong and Taiwan from 1970s, and for this reason the non-registration of the Chinese trademark in the main land China is obviously a mistake in HERMES INTERNATIONAL’s trademark strategy.

The dilemma faced by HERMES INTERNATIONAL is mainly resulted by its negligence, and we would like to take this opportunity to remind the foreign company and international brand to make a proper trademark strategy and arrangement before the reputation of its brand, also the localization of its trademark is also necessary to avoid the dilemma.

Other recommended posts on our website:
1. The Actual Term of Trademark Registration in China
2. How to Apply for the Trademark Record in China Custom
3. How to improve the success rate of trademark registration in China?
4. Matters for Attention in Trademark Refusal Review in China
5. Introduction of China’s Legal System of Trademark Renewal
6. Introduction on the Regulations concerning the Capital Contribution in IPR or Domain Name in China
7. The Copyright Registration in China Could Be FREE?
8. China Copyright Protection Term Longer than EU’s?
9. Matters for Attention in the Patent Preliminary Injunction Application in China(I)

Author: Mr. Luo Yanjie
Attorney-at-law of DeBund Law Offices
Co-author: Mr. You Yunting
Founder & Editor-in-Chief of Bridge IP Law Commentary
Partner & Attorney-at-law of Shanghai DeBund Law Offices
Email: Bridge@chinaiplawyer.com, Tel: 8621-5213-4900,
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Bridge IP Law Commentary is a website focus on the introduction of commercial laws in China, especially the intellectual property laws. All the posts here are our original works. And all news or cases referred here are from public reports, and our comments or analysis are of due diligence, neutrality and impartiality, representing our own opinions only and are our original works. You may contact us shall you have any opinions or suggestions.

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