Conventional wisdom suggests that China is a prime target for the fashion industry, as the country’s rapid economic growth has led to increased buying power for Chinese consumers known to love luxury brands. Nevertheless, any international brands considering expanding into China must be cognizant of a unique trademark issue that has embroiled French luxury group Hermès International SCA (Hermès) in a legal battle for the better part of the past two decades.

Last year, the 175-year-old fashion house lost an appeal to China’s Trademark Appeal Board (CTAB) in which it had asked the CTAB to cancel a trademark registration for a mark similar to its Chinese name. Hermès, which is known as “???,” or “Ai Ma Shi,” in China, registered its French name as a trademark in 1977, but failed to register the Chinese version as well. In 1995, a Chinese clothing company applied to register the trademark “???,” which uses slightly different characters but shares the same Chinese pinyin spelling of “Ai Ma Shi.” After the application was published, Hermès appealed to the CTAB in 1997, arguing that the applied-for-mark was confusingly similar to its Chinese name. The CTAB, however, rejected Hermès’ appeal and approved the registration in 2001.

Hermès tried again in 2009 by filing another appeal to the CTAB demanding that the registration be cancelled. It argued that its Chinese name had become famous around the world and should therefore be protected as an unregistered well-known trademark. It also urged the CTAB to recognize that the disputed registration was an imitation of Hermès’ Chinese name and that the Chinese company had obtained the similar-sounding registration through “deceptive means.” However, the CTAB ultimately rejected Hermès’ claims in 2011, reasoning, in part, that most of Hermès’ evidence of fame was dated after the disputed trademark had already been registered. Despite Hermès’ subsequent efforts to have the CTAB’s decision overturned, a Chinese court recently affirmed the decision, ruling that Hermès had failed to demonstrate that that the disputed trademark was obtained illegally or that its Chinese name was well-known among mainland Chinese consumers.

Hermès is not the only international brand currently involved in a Chinese trademark dispute. Apple Inc. (Apple) is presently fielding lawsuits from Proview Technology (Proview), a struggling Chinese technology firm, over Apple’s use of the iPad trademark in connection with its popular tablet computer. Proview, which manufactures display products, registered the iPad trademark in several countries between 2000 and 2004. Apple later purchased the global rights to the iPad trademark from Proview’s Taiwanese affiliate, but Proview now argues that the corresponding Chinese trademarks belong to a separate affiliate, Proview Shenzhen, and therefore were not included in the earlier agreement. Apple has bitterly fought Proview over this contention, but courts in a number of Chinese cities have issued contradictory rulings on the issue.

Meanwhile, NBA icon Michael Jordan, who has been known as “Qiaodan” in China since playing for the US Olympic basketball team in 1984, has sued Chinese sportswear brand Qiaodan Sports Co. Ltd. (Qiaodan Sports), claiming that the company is exploiting his name and jersey number, 23, without his consent. Qiaodan Sports, which owns the trademark registration for the Qiaodan name, disputes Jordan’s claims and suggests that the name Jordan is ubiquitous for celebrities both in the US and worldwide and that its use of the number 23 has no connection to the legendary athlete.

Any companies doing business in or considering expansion into China should carefully consider the trademark issues surrounding not only their names and slogans, but also any Chinese translations thereof. Arent Fox will continue to monitor these cases for further developments. For more information, please contact the attorneys listed at right.