In the early 2000s they were called Cyber Squatters. Then came the Trademark Squatters.
Around twelve to thirteen years ago, clients would contact me and complain that someone had seized their domain (website) in China and registered it in their name. A flood of clients, all of whom repeated the same story: their domain had been hijacked and now ends with “.cn”. They were desperately trying to figure out how to get the domain back in their name.
Thirteen years later, we see the same story, this time with Amazon sellers whose trademark has been hijacked to China. Nowadays we see dozens of inquiries from our clients, who received an alarming email from a Chinese law firm. The law firm emails our client (oddly, it is 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.”
I cannot say for certain, but it is reasonable to assume that the friendly Chinese firm offering its help is part of the plot. In terms of the legal aspect, the unfortunate Amazon seller in this predicament is presented with the following dilemma and alternatives:
- Negotiate with the “hijacker” and buy the Trademark from him
- Enter into a legal process against the hijacker in order to prevent the registration (a proceeding that has a fair chance to succeed, but is still a costly legal proceeding)
- Accept the risk by taking no action, which may result in losing the opportunity of obtaining a Trademark in China, where the seller manufactures the products. [and risk a trademark infringement claim per the Chinese law firm letter]
Either way, the Amazon seller is facing a loss of several thousand dollars.
By the way, this phenomenon is not really new. 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”!
So, what should you do? 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 hijackers. 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…