International law firms face being held to ransom after issues with ChinaÂs trade mark filing rules.
Firms including Osborne Clarke, Norton Rose Fulbright and Squire Patton Boggs have been targeted by a local trade mark ÂsquatterÂ.
Squatters anticipate a mark or brandÂs popularity and register a trade mark before the rightful owner is able to. This practice is prolific in China because the country adopts a first-to-file trade mark system. Under Chinese rules, the first person to file for a particular mark generally becomes its owner if their application is successful irrespective of whether they have used the mark in the past.
Businesses have found it difficult to retrieve the mark and either have to buy it off the perpetrator or prove non-use, which can be problematic.
The domain names squirepattonboggs.net and the trade mark for the firmÂs name are registered to a company called Qinhuangdao Hongshun Technology Development. The company also owns trade marks for the names Osborne Clarke and Norton Rose Fulbright.
A spokesperson for Squire Patton Boggs said it Âhad been aware of the Chinese entity and its efforts to use its, and other law firmsÂ, names.
Â ÂWe will continue to take all necessary measures to protect our brand in China and minimise any unlikely confusion this illegitimate activity could cause in that market,Â they added.
James Love, solicitor at Harrogate firm James Love Legal and a member of the Law Society’s IP Committee, told the Gazette: ÂIn the UK, if you have been using a brand extensively, you have a certain amount of protection if someone chooses to file your mark ahead of you. In China, though, the general rule is whoever files first owns the rights.
ÂAlthough recovery of the name is possible [Starbucks recovered a mark for Xingbake Â ÂxingÂ means star and ÂbakeÂ is pronounced Âbah-kuhÂ], Love said it will usually mean establishing that the squatter acted in bad faith, for which the hurdle is Ârelatively highÂ.