Chinese trademark squatting; others have been burned before, so African brands beware!

African wine and food producers need to ensure their brands are protected.

THE BUZZ is beginning to grow around the upcoming annual ProWine show in Shanghai, China, the country’s leading international trade fair for wine and spirits. 

South African wine and food exports have been flourishing with strong demand from China. In 2013 the country became the world’s top consumer of red wine, the same year that South African wine exports to China were seen to have experienced good growth, approximately 32% over four years.

But there is a dark side to this business  - “trademark squatters”. A very real threat to the brands being imported into the country. 

Trademark squatting is the act of registering other people’s marks as their own by squatters in other countries. The idea is to gain benefits from original marks or real trademark owners. 

So in China’s case, a Chinese entity registers a multinational corporation’s English language trademark, or its Chinese translation, in China first and becomes the lawful owner of the trademark in China. 

Because of this, Donvay Wegierski, the Director at Werksmans Attorneys, says that African wine or food producers need to ensure their brands are protected because of China’s trademark laws, which in the past have proved very costly for exporting companies. For example, Apple Inc. paid $60million to settle a dispute in China over ownership of the iPad name with Proview Technology in China. 

In order to avoid these issues, exporters need to ensure that their trademark is also protected in the country they are exporting to.

This is particularly important in a country such as China which represents approximately 30% of all trade marks filed globally. And they’re not slowing down. According to Wegierski, statistics show that over 2.3 million trademark applications were filed in 2014 alone. While a large portion are filed by International corporates many applications are also filed by local Chinese businessmen and entities who are brand savvy and are aptly referred to as trademark squatters. 

The law firm advised several steps for protection:

1. Identify primary markets and conduct trade mark availability searches for both core and new marks

2. Apply for and register your trademark 

3. Monitor competitors and the market

4. Use your trade mark and prevent others from potentially cancelling your mark for non-use

5. Renew your trade mark

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