International law firms fall victim to China's trademark squatters
Squire Patton Boggs, Norton Rose Fulbright and Osborne Clarke have been fighting trademark battles over the use of their name in China
June 05, 2017 at 06:42 PM
7 minute read
China's trademark squatters, notorious entities that register the marks of known brands in the hopes of profiting off the name or extracting money from the brand owner, are now targeting big law firms.
It is no longer surprising to see the trademarks of such well known brands as iPads and Air Jordans hijacked in China, and multinational companies know to call on global law firms for advice on how to reclaim their stolen brands, or better yet, avoid falling prey to China's professional squatters in the first place.
But it appears that global law firms have failed to heed their own advice.
At least three well-known international firms have had their names appropriated in the past two years. The most recent victim is Squire Patton Boggs, but Norton Rose Fulbright and Osborne Clarke (OC) have also been fighting their own trademark battles in China.
Earlier this year, an entity claiming to be a Chinese law firm began promoting itself on the web as Squire Patton Boggs, using the URL squirepattonboggs.net. Its website, which is still online, prominently features the firm's name, and displays a logo that strongly resembles that of the 1,400-lawyer US firm of the same name. This Chinese 'firm', which is based in eastern China's Suzhou city, according to the website, claims to provide a full range of legal services with a specialisation in intellectual property (IP) law.
Furthermore, this Chinese Squire Patton Boggs says on its About us page that it has more than 600 lawyers and staff in 22 offices across mainland China and Hong Kong, and claims to handle everything IP-related, from patent prosecution to trademark litigation in China. Fang Zhijun is listed as a partner and a key contact for the firm, and three other individuals – all with non-Chinese-sounding names – are listed as leaders of the patent, trademark and copyright practices, respectively.
But little of what is on the website is true. The pictures of the extremely good-looking Caucasian lawyers described as the firm's "specialists" are actually stock photographs. And the About us article is nearly identical to a page on the website of Unitalen Attorneys at Law, a well established IP agency and law firm based in Beijing.
The company claiming to be Squire Patton Boggs in China is actually not a licensed law firm at all. It is a legally established trademark agency. Company registration records show that the name Fang Zhijun and the company address both match the filings of Suzhou-based Guanghua Intellectual Property Co. Ltd.
Guanghua, which acts as an intermediary for those seeking to own trademarks, looks to register foreign marks that have potential in China, hoping it will profit when the foreign company one day expands into China. It has helped squatters register marks for Zonnatura, a Dutch food company, and Avametric, a San Francisco-based fashion technology company, for example. Neither company has entered the Chinese market.
It also registered OC. And it did so for a Chinese entity that is not affiliated with the UK firm.
"Often the squatters are just trolls with hundreds of marks in their portfolio," said Paolo Beconcini, who leads the intellectual property team for Squire Patton Boggs in China and notes that many of the marks are never used.
In fact, sometimes it's best to take no action when a squatter appropriates a mark, especially if the mark does not appear to be registered to a competitor, Beconcini said. After three years, the mark can be easily canceled on non-use grounds.
But that is not the case for Squire Patton Boggs. A representative said the firm is taking measures to protect its name in China. And the firm has filed an invalidation proceeding to cancel the trademark agency's use of the mark. Beconcini said he is not authorised to discuss details of the case.
If the experiences of two other global firms are any guide, however, it won't be easy for Squire Patton Boggs to fully reclaim its name in China. Both the domain name squirepattonboggs.net and the trademark are registered to a company called Qinhuangdao Hongshun Technology Development Co. Ltd. And between 2014 and 2016, the same company operated the website norton-rose-fulbright.com, which claimed to run a China-based IP agency named Norton Rose Fulbright Intellectual Property Agency Ltd. It also owned the domain name osbornclarke.com until 2016. (The firm's actual domain is osborneclarke.com, with the Osborne spelled with an "e".)
Norton Rose Fulbright eventually recovered its domain name following lengthy proceedings in China and Hong Kong. And OC also managed to claim the domain name osbornclarke.com.
But for both Norton Rose Fulbright and OC, the trouble is far from over. Reclaiming a domain name is only part of the battle. As of this writing, Hongshun still owns the trademarks of both firms – and of Squire Patton Boggs – under the legal services category. An opposition proceeding is pending now for the Norton Rose Fulbright trademark. No opposition proceeding has been filed for the Osborne Clarke trademark so far.
An OC representative said the firm was happy with the outcome of the domain name matter but did not provide details about the trademark dispute. Norton Rose Fulbright did not respond to several requests for comment.
Meanwhile, all three firms have filed their own trademark applications, according to records from the China Trademark Office. And all three applications have been denied. Appeals are pending.
How does this happen? How do world-class law firms get caught in China's trademark trap?
China's trademark regime follows the 'first to file' rule, which gives whoever files the application first the advantage over everyone else. Applicants can file oppositions, or invalidations if an opposition is denied – if they can prove they are the rightful owners of the trademarks. "[But] at the end of the day, [someone else] getting the registration in first can create a real obstacle," said Joshua Mandell, a Beijing-based lawyer at the global IP firm Rouse.
Law firms tell their clients they need to be vigilant and register their domain and their marks immediately to avoid squatter shenanigans. The squatters are sophisticated, and move with stealth and speed.
In fact, Qinhuangdao Hongshun registered the domain squirepattonboggs.net on 24 May 2014, just one day after Squire Sanders and Patton Boggs announced their merger. The company filed its Squire Patton Boggs trademark application in China two days after that. The US firm, however, did not file its own trademark application until six months later – on 1 December 2016.
Hongshun also filed its trademark application for Osborne Clarke in March 2016. Osborne Clark did not file until May 2016. And Norton Rose Fulbright did not immediately update its trademark portfolio in China after the 2012 merger between the UK's Norton Rose and US firm Fulbright & Jaworski. In fact, it did not begin filing for a series of marks until 2014. By then, it was nearly two years too late. Hongshun filed its first Norton Rose Fulbright trademark on 19 November 2012, just days after the merger was announced.
Lawyers say the most effective way to avoid having a brand name stolen in China is to file early and file first. In fact, it may be the only way.
"The only silver bullet," said Rouse's Mandell, "is to get your foot in the door first."
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