When True Religion Brand Jeans applied to register its trademark in China last year, that country’s trademark authorities rejected the denimmaker’s request. But two months later, they gave the green light to an unaffiliated Chinese applicant whose trademark, Zhenshi xingyang, means “true faith” in Mandarin.
So the fashion retailer turned up the heat in Washington, hiring K Street powerhouse Akin Gump to lobby on its behalf on China-related counterfeiting and trademark issues. The retailer has paid Akin Gump $220,000 in lobbying fees since March 2010, according to lobbying disclosure records. The firm is also working with True Religion’s in-house lawyers to appeal the decision denying the English version of the trademark, and to fight the Chinese applicant’s exclusive rights to Zhenshi xingyang — which could open the door for True Religion to claim the Chinese version of the trademark for itself.
Legal rights to a trademark are country-specific, and without a registered trademark in China, it’s nearly impossible for True Religion to enforce against Chinese counterfeiters, said Akin Gump partner Steve Kho, who is representing the denim retailer.
A growing number of small and mid-size businesses are grappling with similar dilemmas as they look to expand their brand overseas, often finding that an unaffiliated company or individual there already owns, or is trying to register, the rights to their trademark. Those businesses are increasingly tapping the District’s cadre of international trade attorneys with expertise in cross-border enforcement of intellectual property rights — and access to policymakers who could influence the Chinese government to enforce intellectual property laws.
“In certain countries, these are less of a straight-up legal issue and more of a legal-policy issue, because you’re dealing with authorities that care less about IP enforcement than other legal enforcement,” Kho said. “Usually, the stronger the messenger, the stronger the message will be.”
Product Partners, which produces the popular home fitness program BeachBody, also retained lobbyists to help combat the production of counterfeit DVDs in China, paying Akin Gump $90,000 last year and Cozen O’Connor $60,000 this year to lobby on intellectual property rights and counterfeiting issues in China, according to lobbying registration records. Akin Gump lawyers and BeachBody’s local Chinese counsel helped launch an investigation and raid of a Chinese company that packaged unauthorized BeachBody DVDs. A criminal prosecution by local authorities is pending.
For True Religion, a Vernon, Calif.-based company with a three-person legal team, finding an outside firm with a presence on Capitol Hill and a command of Chinese trademark law was key.
“We went with outside counsel to help us see if there were other political mechanisms we could use to communicate with the trademark office in China,” said True Religion general counsel Deborah Greaves. “We needed international expertise. Some things get lost in translation. ... They helped us understand and interpret the decision of the [Chinese] trademark office.”
Though IP infringement is not limited to China, it is the country with the largest presence by far of U.S. Patent and Trademark Office staff on the ground tasked with intellectual property protection and enforcement. The agency has seven offices abroad for what’s known as the Intellectual Property Rights Attaché program, which staffs local attorneys specializing in enforcing intellectual property rights for U.S. companies facing copyright, trademark or patent infringement.
Two out of the seven of the offices are in China (in Beijing and Guangzhou). A third, in Shanghai, is slated to be added by year’s end. The Patent and Trademark Office is one of several federal agencies that jointly run the Website stopfakes.gov, which has country-specific resources for companies facing intellectual property problems. Those resources include a feature whereby a businessowner can call a toll-free number and speak to an intellectual property attorney for free for one hour on how to protect a frim’s intellectual property rights abroad.
Not all companies want to fight a trademark previously registered in China, a notoriously slow process that can take up to four years, said Jonathan Hudis, a partner at the District’s intellectual property boutique firm Oblon, Spivak, McClelland, Maier & Neustadt.
Last year, one of Hudris’ clients, a U.S. company that makes electrical components for machinery (who he declined to identify by name), decided not to take action when they discovered someone had already registered a similar trademark in China and was making similar products. While his client can still do business in China, their trademark has been weakened, he said.
“When you have confusingly similar marks in any overlapping channel of trade, like the same country, you’re going to have people thinking one mark belongs to someone else,” he said.
To avoid the problem altogether, business owners should register their trademarks in countries even if they don’t have immediate plans to do business there, Hudis said.
It may be expensive but, “compared to the cost of legal action against someone who has already applied for or registered the mark in another country or buying the mark from them outright? No.”