Chinese (Trademark) Hijackers

In the early 2000s they were called Cyber Squatters. Now came the Trademark Squatters…

Thirteen years ago, clients would contact me and complain that someone had seized their domain name (website) in China and registered it in their name. A flood of clients, all with the same story. They were desperately trying to figure out how to get the .cn domain name back in their name.

Thirteen years later, we see the same story, this time with Amazon sellers whose trademark has been hijacked in China.

In the last months we received dozens of inquiries from our clients, who received an alarming email from a Chinese law firm. The law firm emails our client (oddly, these are always the same law firms): “It has come to our attention that someone has filed a trademark application for your brand name in China. If they successfully obtain registration your use of the brand will, in effect, infringe the registered Chinese trademark. We would be more than happy to assist should you wish to oppose this trademark application.”

It is reasonable to assume that the friendly Chinese firm offering its help is part of the plot.

Legally, the unfortunate Amazon seller in this predicament is presented with the following dilemma and alternatives:

  • Negotiate with the “trademark squatter” and buy the Trademark from him
  • File an opposition against the “trademark squatter” in order to prevent the registration of the mark (a proceeding that has a fair chance to succeed, but is still a costly legal proceeding)
  • Accept the risk by taking no action. In such case the seller would be infringing his own TM in China by manufacturing his goods in China. In addition, the owner of the registered TM can have the customs stop all shipments heading outside of China.

Either way, the Amazon seller is facing a loss of several thousand dollars.

This phenomenon is not entirely new for Amazon sellers. Over the past two years, several of our clients have discovered that a Chinese seller has registered our client’s trademark in their name in the US – and has taken possession of the name as the “brand owner”. Some of our clients had their listing shut down, by a Chinese seller who unlawfully registered their TM.

So, what should you do to prevent this problem?

If you are a relatively small private label, you may want to wait. Each course of action entails certain costs and risks, and small private labels have many expenses already. I would start by protecting your brand in the US, and then worry about China.

If you are a relatively established seller, then you are a convenient target for ”trademark squatters”. It’s a good idea to check if the Trademark is still available in China, and if so – grab it! Trademark registration is much cheaper than a legal proceeding against a Trademark Squatter.

Here is the kind message from the sympathetic law firm…

Good luck!