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Michael Jordan’s Trademark Victory in China: A Lesson Learned for International Companies

On December 8, 2016, the China Supreme People’s Court rendered a partially favorable decision for basketball legend Michael Jordan in his four-year battle against China-based sportswear company Qiaodan Sports Company Limited (“Qiaodan Sports”) over the use of his name. Jordan’s victory signals China’s highest court recognizes non-Chinese citizens’ right to protect their names and to some extent implies the court’s determination to fight copycats. Yet, international companies should not celebrate too soon – the majority of trademark infringement cases in China still favor trademark squatters.

The Court found that “Jordan” in its Chinese characters enjoys wide popularity and has been used on various occasions to refer specifically to Michael Jordan. The claim raised was that Qiaodan Sports had “maliciously” registered trademarks for the use of Jordan’s name under different classes and built its entire business on that goodwill. Although Qiaodan Sports had significant investment in the brand and had occupied a certain market share for nearly a decade, Jordan’s right to his Chinese name prevailed. However, the Court declined the protection on Jordan’s family name in its phonetic spelling version, “Qiaodan” (pronounced as “Chee-ow-dahn”) because the Court believed that there was no established link between the phonetic spelling and Jordan as a person. Jordan, who is also the chief executive officer of The Jordan Brand, a division of Nike, said he was happy about the Court’s recognition of the right to protect his name.

Implications for International Companies 

Unlike the “first-to-use” principle in the U.S., China implements a “first-to-register” trademark policy under which trademark rights are granted not based on use but instead on registration. Although Jordan finally scored victory in his long campaign, this case should serve as a warning to international companies that trademark squatters are rampant in some foreign countries. Be wary that someone may already use your name or well-known mark in another corner of the world and might have already obtained the legal right to do so. When evaluating overseas trademark protection, businesses should consider:

Defensive Trademark Registration in China 

Most companies doing business in China are familiar with this concept, but besides seeking cross-class filing as a defense, they need to be more cautious about the language itself. For example, in China, other than “Apple” the English mark, there is “Apple” in Chinese character and “Apple” in Chinese phonetic spelling. Even Jordan was unable to protect the Chinese phonetic version of his name, so less widely known brands would most likely suffer the same fate. Additionally, the names of celebrities are often of great commercial value. When a famous name is associated with a brand like Jordan and Nike, don’t assume a foreign court would always support the celebrity. Develop a proactive overseas trademark strategy as early as possible. 

Note that most other countries, including the U.S., require the “intent to use” for trademark registration, so defensive filing may not be an option in those territories. Consult your legal counsel for advice on defending trademark rights when protection is based on use.

Other Approaches to Cross-class Protection 

Sometimes from the business perspective, filing and maintaining too many defensive trademarks can be costly and wasteful. Seeking cross-class protection as a “well-known” mark in China would help simplify the “watch list.” Also, cross-class trademark protection could be achieved through securing other priority rights, such as copyright and the right of name.

Monitor Counterfeiting Activities 

Jordan did not start opposing Qiaodan Sports’ use of the disputed trademarks until 10 years after they were first registered. Overseas copycats are difficult to detect, and by the time they are discovered, either the statute of limitation has passed or the counterfeiting business has developed too far. More challenges are posed with the rise of cross-border shopping on e-commerce platforms. International companies should implement robust anti-counterfeiting programs to monitor and detect potential infringements around the globe for early prevention.

© Copyright 2017 Armstrong Teasdale LLP. All rights reserved

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About this Author

David W. Braswell, Corporate Services Attorney, Armstrong Teasdale, law firm
Partner

As leader of the Corporate Services practice group—recently named the top corporate law firm in St. Louis byCorporate Board Member magazine—David Braswell serves public and private companies in a broad spectrum of legal issues. Guiding clients regarding strategies for growth and structure, he concentrates most often in the areas of securities, mergers and acquisitions, corporate governance and finance. David is a member of the firm’s Executive Committee.

Representing clients in transactional matters of all types and sizes, David counsels regarding asset and stock...

314-552-6631
Irene He, International Law, China, Attorney, Armstrong Teasdale Law Firm
Associate

Irene He is an attorney in the firm’s Corporate Services practice group. Focusing on international law, Irene counsels U.S. and Chinese companies in both inbound and outbound cross-border transactions. Her ability to serve domestic and foreign clients is enhanced by her knowledge of the laws, languages and cultures of both countries. 

Her transactional work includes negotiating, agreement drafting and handling regulatory matters. Irene also collaborates with other practice groups to help navigate a full range of business areas. 

For outbound matters, she represents U.S. companies setting up wholly foreign owned enterprises and joint ventures in China. In addition to the transactional services, Irene advises clients on intellectual property registration and protection in China. She also provides counsel on immigration and employment matters in relation to expatriate assignment to Asia.

 

314-342-8053
Donna Schmitt, Intellectual Property Attorney, Armstrong Teasdale Law Firm
Partner

As a member of the Intellectual Property practice group, Donna Schmitt strategically manages global trademark portfolios.

Businesses in a variety of industries look to Donna to handle domestic and foreign trademark prosecution and for guidance on trademark selection, use, registration, policing, protection, infringement and enforcement. She also advises on trade dress and copyright matters as well as brand expansion through trademark licensing. Donna counsels on domain name registration and use of trademarks and copyrights in social media.

As part of her practice, Donna works...

314.552.6681