China’s trademark system a quagmire for businesses both large and small

Entering China with a trademark is no easy business, full of “murky rules and opportunistic ‘trademark squatters’”, www.reuters.com recently reported. Take it from entrepreneur Bill Walters of New Jersey who tried to enter the Chinese market in 2010, after launching his OSPOP sneakers in 2007. He found pirated copies of his shoes already there and four Chinese companies fighting over his trademark.

"These are people who are out there snatching up intellectual property (IP) with no related interest, strictly from the standpoint of owning IP as an investment," Walters told Reuters, adding that the lack of a trademark has hampered business. Walters said a food company in Guangzhou demanded 1 million yuan ($158,700) in return for the OSPOP trademark.

Even big companies like Apple and Facebook face trademark issues in China, the first with its iPad dispute with Proview Technology (see IPBlog) and the second with registering its trademark name in the country to launch the site there.

China ranks near the top of the world in trademark registrations. That figure rose more than 40 percent to 1.2 million in 2010 after doubling to 838,000 in 2009. The country works on a first-to-ile system, rather than a first-to-use system, which will change on September 16,2012.