‘Trademark squatting’: The bane of U.S. intellectual property holders

In a recent post, we told south Florida readers about how Yahoo had been accused of “weaponizing” patents. Weaponizing is not the only controversial trend developing in intellectual property today. Another such trend is what is being called “trademark squatting.”

Trademark squatting refers to the practice by which foreign companies register the names, slogans and other marketing tools of U.S. companies before that company has a chance to do so itself.

This is especially a huge problem in China, where about three times as many trademarks are filed each year as are filed in the U.S. A lot of those are opportunistic filings from people who hope to later sell the trademark later for a lot of money. For example, J.Crew does not sell its clothing in China, but someone has already trademarked the name “J.Crew,” so now if the J.Crew really does want to move into the Chinese market, it is going to have to pay that trademark holder a lot of money to get the rights to its own name.

Other famous names that have been appropriated by Chinese trademark holders include Facebook, Justin Bieber, Kardashian, Oprah Winfrey and Angry Birds.

This causes U.S. companies a lot of consternation, particularly because they are used to intellectual property laws that tend to generally favor the first user of a trademark. There is an escape valve in that if a trademark holder can prove that its name or image was so well known there is no way the Chinese trademark holder could have filed in good faith. Still, U.S. companies do not appreciate the time and energy they have to spend on these disputes.

Source: The Los Angeles Times, “Trademark squatting in China doesn’t sit well with U.S. retailers,” David Pierson, March 28, 2012