The Race to Register Trade Marks - Why You Need to Win
We tend to bang on about the benefits of registering trade marks (see these links to previous blogs, for example: http://www.theloft.legal/#!Why-Register-a-Trade-Mark-Having-a-Company-Business-or-Domain-Name-is-Not-Enough/cso9/555a63890cf23d0164a4a665 and http://www.theloft.legal/#!All-Hopped-Up-But-Nowhere-To-Sell/cso9/57689ad40cf298ca495e0717).
However, nowhere is this more important than in “first-to-file” countries. In those countries it is a necessity to register trade marks.
First-to-file countries are countries in which the first person to file a trade mark application has pre-emptive rights that are very difficult to overcome, even if you are already using the same trade mark in that country.
We see people registering other people’s trade marks in first-to-file countries (most often China) such as local distributors or manufacturers (to gain leverage in negotiations and to secure their long term position by owning the trade mark) or opportunistic people wanting to make a quick dollar (it is often more cost effective and quicker for businesses to pay the “ransom” demanded for their trade mark rather than challenging it through the local courts).
Ownership of your trade mark by these people is problematic because it means you do not own your brand in the particular country and the person that does own the trade mark can enforce it against you. This includes preventing you from exporting your branded goods out of, say, China (even if you do not sell goods in China).
There are numerous examples of this happening, from small businesses to very famous brands (including Apple, New Balance, Michael Jordan, Burberry and Tesla to name a few). See the following links for some commentary on this: http://www.smh.com.au/business/china/apple-trademark-defeat-means-an-iphone-in-china-may-not-be-a-phone-at-all-20160505-gon779.html and http://adage.com/article/global-news/western-brands-jordan-losing-trademark-battles-china/299830/.
Countries in which NZ and Australian businesses commonly trade in that follow the first-to-file rule include:
If you are trading or intending to trade in one of these countries (including manufacturing branded goods for exporting elsewhere) make sure you register your trade mark in that country, including a version of your trade mark in the local language. This should be done before you engage with people about trade in that particular country so that they do not beat you to it.