SA exporters face growing threat from trademark 'squatters'

As demand increases
in emerging markets –
particularly China – for locally
produced food and wine,
exporters have been warned
to ensure their trademarks are
protected as recent laws against
‘trademark
squatters’ have
not proven fool
proof.
“China
represents
about 30% of
all trademarks
filed globally,
and statistics
show that over
2.3 million
trademark
applications
were filed in China in 2014
alone,” said Donvay Wegierski,
director at Werksmans
Attorneys, who issued
this warning ahead of the
upcoming annual Pro Wine
show in Shanghai‚ China
from November 11-13. A large
contingent of South African
food and wine producers
worldwide is set to showcase its
products at the show.
According to a recent article
by World Intellectual Property
Review (WIPR), trademark
squatting is a growing threat
from emerging markets,
including South
Africa’s Brics
partners –
Brazil, India,
China and
Russia.
Changes
to China’s
trademark
law came into
effect in April
2014 and were
meant to be
tougher against
trademark squatters. Legal
trademark experts however say
that while there were positive
changes from the Chinese
government, there was a lot
more that still needed to be
done to protect brands.
WIPR says even major global
brands such as Apple, Tesla and
Pfizer have found themselves
in a trademark legal wrangle
against parties in China
registering their brands.
Wegierski explained that
China’s trademark system
operated on a ‘first-to-file basis’
which meant that brands that
were not watching events in
China closely were vulnerable
to a phenomenon known
as “trademark squatting”.
According to her, this is defined
as a party registering a brand as
a trademark in bad faith.
“A large portion of
trademarks are filed by
international corporates but
many applications are also filed
by local Chinese businessmen
and entities that are brand
savvy – and if they are the first
to file an application, they
will in essence be awarded
that trademark,” Wegierski
pointed out.
“The rightful proprietor
may have to consider
instituting dispute
cancellation proceedings to
have the disputed trademark
removed from the Chinese
trademark register but it is an
onerous and costly burden to
shift and it could take up to
three years for a ruling to be
made.”
Wegierski noted that
trademarks were territory
and class specific by nature,
which meant that if a company
was exporting a product to
a territory outside of South
Africa, it was necessary to
ensure that the trademark was
also protected in that country.
“Trademark registration
in South Africa does not
automatically ensure
trademark
protection
outside of
South Africa.
“Many enter China only to
be met with the realisation
that a third party has already
registered the trademark
concerned,” said Wegierski.
She said that the global best
practice for protection was to
identify primary markets and
conduct trade mark availability
searches for both core and new
trademarks. “It is important
to apply for and register your
trademark and constantly
monitor competitors and
the market as well.”
INSERT
Global brands such as
Apple, Tesla and Pfizer
have found themselves
in a trademark legal
wrangle.
INSERT & CAPTION
Over 2.3 million
trademark
applications were
filed in China in 2014
alone.
– Donvay Wegierski