U.S. and multinational companies continue to face intellectual property challenges in China, particularly when it comes to trademarking their brands. Following Apple’s highly publicized trademark troubles, luxury design house Hermès is the latest company to face a legal setback after losing a trademark appeal in China.
The China Trademark Appeal Board recently ruled that Hermès cannot register its name in Chinese (“Ai Ma Shi”) because a different apparel company already holds a trademark, Shanghai Daily reports. When companies enter the Chinese market, they often register both their brand name and a Chinese counterpart, particularly when their traditional brand name does not translate well into Mandarin.
Despite registering its brand in China in 1977, Hermès did not register its Chinese name at the same time. In the meantime, Guangdong Province-based menswear maker, Dafeng Garment Factory, registered a trademark similar to the Chinese name of Hermès. China approved the trademark in 2001 despite protests by the French designer.
In its most recent appeal, Hermès argued that its Chinese name should be protected as an unregistered trademark in China. It said the disputed trademark had imitated the Chinese name of Hermès and was gained through “deceptive means.” The court held, however, that Hermès failed to prove it was well known among consumers on the Chinese mainland and that the trademark had been acquired illegally
The Message for U.S. Companies: If you are looking to expand in China, it is important to understand that brand recognition here will only get you so far in China. Therefore, it is imperative to register both your original brand name and the Chinese version as soon as possible.