The process of starting or conducting business in a foreign land is hardly an easy task, especially if a company intends to build and spread its brand in that particular country. There are many aspects that the company or enterprise should consider, from operating costs to the local practices and even the languages of the country.
Linguistic considerations are especially important in building and also securing the rights of a company’s trademark and brand in the country. The company should always check the language in which the mark is likely to be used by local consumers, its proper translation and the commercial impact of adopting the country’s local transcript for the mark. Many businesses, as a result of failing to do this especially in countries that implement a “first-to-file” trademark registration system, have often unfortunately found themselves prey to “trademark pirates” and “copycats” and subsequently lost their rights to a valuable asset of a trademark. One case in point is the recent trademark clashes of iconic French high fashion house, Hermès, with a Guangdong province-based company known as Dafeng Garment Factory in China.
China is currently one of the fastest growing markets in the world and has opened many big opportunities over the years for companies from all over to come in and expand their businesses. It is also one of the countries with a jurisdiction that practises the “first-to-file” principle for the registration of a trademark.
Founded in the year 1837, Hermès – in pursuit of global expansion – recognized the importance of protecting their brand in China and successfully registered the English version of their mark using the transliteration, 埃尔梅斯 (pronounced as Āiĕrméisī, which has no meaning in Chinese) on their application form in 1977. They however neglected to register 爱马仕 (pronounced Àimăshì, meaning “officials who love horses”), the Chinese version of the mark that was commonly used by local consumers to identify the brand. While this might seem like a trivial matter, it would appear that as the local consumers use the Chinese version of the mark more frequently than the English version – likely due to the fact that it is much easier for them to pronounce – the Chinese version of the mark would eventually carry equal significance or even more value than the original version of the mark in efforts to build the brand locally.
It was unfortunate then for Hermès that in 1995, Dafeng Garment Factory, a Chinese company based in the Guangdong province, managed to successfully submit an application for 爱玛仕, a variation of the earlier mentioned Àimăshì, differing only with one stroke on the character “mă” in the Chinese term, meaning “officials who love agate (gem)”.
When Hermès realized this, they tried to cancel the registration of the mark and appealed to the Trademark Review and Adjudication Board (TRAB) in 1997 but failed and Dafeng’s mark was officially registered in 2001. In 2008, they again attempted to file a cancellation in dispute with the TRAB but were denied and later in 2011 appealed this decision to the Beijing No.1 Intermediate Court where the judgment was recently issued and was yet again not on their side.
It is said that the main reasons for all their failures thus far to oppose and cancel Dafeng’s mark is because they could not prove that the unregistered Chinese version of the mark had a well-known reputation before Dafeng had applied for it, or that they had used it before Dafeng’s application. The courts and TRAB established that although they had registered the English version of the mark in 1977, it was still insufficient to prevent the registration of a lawful application of a variation of an unregistered Chinese version.
Thus, as clearly demonstrated, it is extremely vital for any company or enterprise, before venturing out and building a business in another country, to always consider the local practises and languages of the country. In countries like China especially that adopt a “first-to-file” trademark registration system, it is advisable to check for the availability of a mark in all the relevant languages of the country and registering them all if needed, as shown in this case that without registration it is difficult even for existing global brands to secure their rights.
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