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JORDAN v. QIAODAN: The Lessons of Trademark Enforcement in China

Posted in Advertising, False Advertising, Famous Marks, Infringement, International, Law Suits

Whether or not you agree Michael Jordan is the greatest basketball player of all time, he is certainly well-known. And after an over four-year battle, China’s trademark courts have agreed.

Michael Jordan and his JORDAN brand have been a staple of Nike’s shoe and apparel business for over thirty years. Nike so values the “Jumpman” logo that it transcends basketball – the Michigan Wolverines, for example, wear the logo on jerseys for all sports, including football.

But in China, where trademark rights belong to the first party to file a trademark, rather than the first to use, the JORDAN wording has effectively belonged to another company. A sportswear company called Qiaodan Sports owned the rights to the JORDAN mark in Chinese characters – Qiaodan, pronounced “chee-ow-dan,” is a transliteration of JORDAN used in China and elsewhere for over thirty years. Qiaodan operates some 6,000 stores in China, and its associated logos also bear a striking resemblance to the Jumpman logo:

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Qiaodan is, essentially, recognized as a knockoff brand in China. So, Jordan brought a lawsuit against Qiaodan in 2012, to seek cancellation of Qiaodan’s Chinese-character trademarks and, separately, a suit to enjoin use of those marks in China. What followed were a series of losses in court. China’s trademark laws do not favor the first to use, so for unregistered mark owners, Chinese trademark enforcement can be near impossible, unless the mark owner can show its mark is “well-recognized” in China.

Qiaodan had registered the Chinese character mark some 10 years before Jordan first objected, although Jordan’s legal team claimed use of the JORDAN name in China dating back to the 1984 Olympics (which were broadcast in China).

Lower courts held that the Chinese character mark would not be squarely associated with Michael Jordan, and that Qiaodan’s “human body in a shadowy design” logo was not recognizable as Jordan.

But finally, earlier this month, Jordan prevailed before the Supreme People’s Court, China’s highest court. It found the Chinese character mark for JORDAN should be returned to China’s trademark office (after which, presumably, Jordan can obtain a registration of his own). And the fight is not yet over – a separate lawsuit in Shanghai is pending over Qiaodan’s use of the JORDAN name.

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That Jordan had to spend such immense time and resources to obtain this decision would surely scare away most “mere mortal” brands, even well-known ones. But there is a valuable lesson here for brands with an international presence.

First, it’s advisable to apply for marks in China as soon as practicable. Unlike other jurisdictions (such as the United States), China does not require proof of use for a trademark to obtain registration. Therefore, the concept of a “defensive registration” exists in China, but not the U.S.

And in most cases, a trademark may not be challenged on grounds of non-use for three years after registration. So long as some genuine good faith use is made in China during that three-year period, the registration will generally avoid a non-use cancellation.

Second, this should apply equally to the concept of “transliterated” marks in Chinese characters (the subject of the JORDAN decision above). A Chinese trademark specialist can propose a variety of potential Chinese character marks that are the phonetic equivalent of an English language mark. It’s also possible that consumers in China may already associate a certain combination with your brand as a “de facto” transliteration.

Finally, it’s also a good idea to obtain a China or global watch service for important trademarks. A watch service will monitor the application and publication databases in various countries and inform of any close matches for which others have applied.

Ultimately, the cost of a timely trademark application in China can save untold costs and prevent various headaches associated with enforcement. A lesson Michael Jordan now no doubt knows better than anyone.