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Manage your Intellectual Property in Mainland China, HongKong, Macao and Taiwan

Don’t fall victim to IP scams

Background

Case 1:

A Swedish SME received an urgent email from a Chinese law firm regarding registration of their product series name in China. The SME had already registered their company name in the classes relevant to their business, but had failed to register their product name, and so were very concerned that they may need to rebrand. The law firm that sent the email offered to raise an opposition to the trade mark, and included details about the deadline for opposition, which was fast approaching.

Case 2:

A French SME received an email that appeared to be from WIPO regarding their trade marks registered under the Madrid System and extended to China. The email contained many specific details regarding their registration, including the registration number, and requested fees for publication of their mark. The email was also bearing a sign similar to WIPO’s logo, leading the SME to believe the email was authentic. Their finance department approved the payment only to discover later when they contacted WIPO that the email had not been sent by their organisation.

 

Action Taken

Case 1:

The Swedish SME were concerned that they may miss the deadline for opposition and so instructed the law firm to raise an opposition to the application for them. However, after doing so they spoke with another lawyer who explained that in the case of their mark they were unlikely to be successful in bringing an opposition against the registration. In the end the opposition procedure was not successful, the trade mark was registered, and the SME had lost money on the opposition procedure. The SME contacted the registrant and were unable to purchase the trade mark from them, and in the end had no choice but to rebrand their product name. The SME later learned that they had fallen victim to a variation of the so called ‘blind filing’ scam, where  some unprofessional law firms/agencies offering ‘rush’ services do so without first completing thorough search and registration risk assessments. For these unscrupulous companies, it does not matter whether or not the application/opposition action is approved as they charge only for the completion and submission of the relevant paperwork.

Case 2:

The French SME contacted their bank to see if it was possible to withhold the payment, however unfortunately it had already gone through. The SME later discovered that they had fallen victim to a typical scam involving Madrid System applications, against which WIPO has issued an official warning on their website. The company then implemented a strict policy for payment of invoices received via email, ensuring due diligence was conducted on such transactions in future to determine that they were indeed from an official source.

 

Lessons Learned

  • Always be wary of unsolicited emails from law firms or from intellectual property agencies – when you register IPR, company details are made available, and can be searched and used by unscrupulous businesses.
  • Register your trade mark in China before manufacturing or selling within the market, or contacting potential business partners.
  • Although, trade mark oppositions now have a much greater chance of success than previously due to recent amendments to the trade mark law, the opposition procedure for trade mark registrations in China is not usually recommended for SMEs unless there is clear evidence of bad faith filing. Law firms contacting you in an unsolicited manner encouraging you to act are looking for fees as opposed to your best interests. In many cases by the time you have received such an email, if the registration has occurred you may be unlikely to have success in bringing an opposition and you will need to consider purchasing the mark or rebranding.
  • Have due diligence policies in place in case you receive unsolicited emails, if you are concerned about a particular email, contact a trusted lawyer or the China IPR SME Helpdesk about your options before taking any further action.
  • If you do not plan to manufacture or sell within China, registration of your trade mark in China does not pose a risk to your business as the registrant will only be able to use your mark within the Chinese market. You will still be able to take action against businesses selling products using your trade mark on e-commerce platforms selling internationally.