DEALING WITH A
STOLEN TRADEMARK

LEGAL ADVICE
The LITAO approach
to Stolen Trademark.

Our client, a U.S. NGO*, runs summer programs in the U.S. for students from China. An agent in China promoted their programs abroad. But when the NGO wanted to open an office in China, they discovered the agent had already registered their trademark for themselves. LITAO served as their go-between.

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Client’s Challenge
  • - US-based client used Chinese agent to register trademark.
  • - According to Chinese laws, trademark in China officially belonged to the agent.
  • - When opening branch company, US company discovered they could not use their own name in China and was justifiably angry.
Litao’s Solution
  • - Instead of assuming wrongdoing, first communicated individually with both sides.
  • - Learned the agent’s motivation for registering trademark was to protect against reputation usurpers.
  • - Private mediation with LITAO.
The Outcomes
  • - Reached settlement on friendly terms without involving the courts.
  • - Agent transferred IP rights to NGO free of charge.
  • - Continued good sales relationship in China.
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*We cannot disclose company names here,
but please ask us if you wish for more details.

The first reaction in such a situation may be an immediate sense of betrayal: the NGO couldn’t even use their own logo as promotion since the trademark had already been taken. It may seem justified to confront the agent in question with accusations, but LITAO encouraged the organization to stay calm. We knew intellectual property rights worked differently in China, and our lawyers confirmed the same. We advised a communication strategy to test the waters, and as it turns out, the agent had registered the trademark for the benefit of the NGO as well as themselves—so other Chinese organizations would not fake their programs, another common occurrence in China.

Key Takeaways:

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Trademark battles, if gone wrong, can cost enormous amounts of money, with the Chinese court system favoring the Chinese company that had registered first. But as there was good will on both sides, the agent agreed to transfer the IP rights to the NGO free of charge. The two went on to further cooperation—this would not have happened had the communication strategy been one of blame and accusation.

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