Jack Ellis

Last year was another busy one in terms of trademark strategy news, and the world’s largest and fastest-developing regional market was often at the centre of it all. What follows is World Trademark Review’s retrospective on some of the key trademark and brand management developments in Asia-Pacific jurisdictions during 2016. Obviously, the below is by no means an exhaustive list, so feel free to add any other suggested top trends from 2016 in the comments section.

Fame and fortune One of the recurring themes over the past 12 months has been the treatment of well-known, or ‘famous’, trademarks, and specifically how Asian courts recognise – or fail to recognise – them. The rapid growth of Asian economies and an increased appetite on the part of Asian consumers for prestigious foreign brands have presented unparalleled expansion opportunities for global trademark owners in recent years. But on entering into these new markets, many rights holders have found that their trademarks are already owned by someone else – and typically, they have found it difficult to set this situation straight. Nevertheless, 2016 saw some important steps towards greater recognition for famous marks in the region. In India, a long-running dispute between a local automotive parts supplier and Toyota over the Prius brand seemingly went the way of the Japanese carmaker in July, with the Delhi High Court ruling that its trademark rights had been infringed in spite of the defendant’s ownership of the PRIUS mark in the country. Over in China, one of the most anticipated trademark cases in the country’s history came to a close with the Supreme People’s Court ruling that local sportswear company Qiaodan had infringed on trademark and brand rights of US retired megastar basketballer Michael Jordan by trading on the Chinese character rendering of his surname. Despite these positive developments, many brand owners will feel that there is still a long way to go before famous trademarks are given proper recognition in Asian jurisdictions. While Jordan scored a victory in Beijing, the court’s decision still leaves questions unanswered, particularly regarding the treatment of transliterated terms; another sports apparel maker, New Balance, stumbled in China with its own accusations of bad-faith filings against a local business. In the final few days of 2016, a division bench of the Delhi High Court also reversed parts of the July ruling on the PRIUS mark, removing some of the lustre from Toyota’s earlier triumph. Indonesian courts, meanwhile, stripped Ikea of some of its trademark registrations on a non-use basis, while the country’s Supreme Court dismissed an infringement complaint filed by Pierre Cardin against a local businessman allegedly using its marks, ruling that the latter “did not use the fame” of the French fashion house’s brand.

Alibaba and many more than 40 thieves Chinese e-commerce giant Alibaba has endured a barrage of criticism for its allegedly lax approach to dealing with the untold number of counterfeiters selling knock-off wares through its platforms. So the company’s April admission to the International Anti-counterfeiting Coalition (IACC) under its newly created ‘General Member’ category would’ve been seen as a victory at Alibaba HQ in Hangzhou – a very public declaration demonstrating its commitment to the fight against fakes. Unfortunately for Alibaba (and the IACC), a storm of controversy ensued. Before April was up, Michael Kors quit the alliance, with its general counsel writing that Alibaba’s admittance “provides cover to our most dangerous and damaging adversary”. Gucci and Tiffany & Co walked out the following month, with other members threatening to follow suit. As May drew to a close, the IACC suspended Alibaba’s membership in the face of all-out brand owner revolt; while founder and executive chairman Jack Ma stepped back from delivering his scheduled address at the IACC’s spring conference, sending president Michael Evans in his stead. Though Alibaba spent much of the rest of the year talking up its anti-counterfeiting credentials, things didn’t get much better for the Chinese company; in late December, the Office of the US Trade Representative returned Alibaba’s Taobao platform to its ‘Notorious Markets’ list, in response to brand owner complaints regarding the prevalence of fake products on the site. For its part, the ecommerce giant has pledged to continue its “all-out war against counterfeits”, with Alibaba Group’s CEO telling staff that “our entire business is at stake in this” and concluding that “our efforts and investments into anti-counterfeiting was never motivated by some list, and neither will it have any bearing on our continual fight against counterfeits moving forward”. Expect the company’s efforts to fight fakes to remain on the trademark agenda in 2017. 

Masters of their domains – This was the year in which the extent of China’s massive stake in the new gTLD programme became clear. ICANN’s October report into the impact of new gTLDs on competition in the domain industry indicated that the largest growth in registry operators over the past year has occurred in China. In June, data from analytics site ntldstats.com revealed that a staggering 53.4% of all domain registrations in new gTLD strings have their origin in China. While the figures would have been seen as good news by ICANN and domain registries, many trademark counsel are likely bracing themselves for an upswing in their cybersquatting-related workload – with the number of Chinese respondents in UDRP disputes rising by 1.5% in 2015, and previous research suggesting that spikes in cybersquatting incidents linked to China led to increases in dispute levels. Whether this comes to pass waits to be seen, however.

Cashing in – The leveraging of trademarks as loan collateral is something that has never really caught on, and it remains largely uncharted territory. Asia, though, is ahead of the pack, with a nascent IP-backed financing industry emerging in the region. While questions may be asked about China’s multi-million-dollar IP rights pledge system, countries like Korea and Malaysia are increasingly exploring the possibilities of IP-backed lending. At the forefront is Singapore’s government-backed IP Financing Scheme, which this year marked two milestones: the grant of its first loan, and its expansion to begin accepting applications using trademarks as collateral.

Going public - A revolution has been taking place in Australia’s legal services market, and trademark practices have not been immune to it. The relaxation of rules surrounding law firm ownership several years ago have seen a number of practices transition from the traditional partner-ownership model to become public stock companies. There are now three holding companies incorporating IP lawyer and attorney firms with shares traded on the Sydney Stock Exchange (ASX), with the latest of these to float – QANTM IP, which acquired firms Davies Collison Cave and Freehills – IPOing in August. The desire to access the public capital markets has been driven in large part by the need to fund expansion ambitions in neighbouring Asia-Pacific jurisdictions, with the US$21 million takeover of Hong Kong firm Ella Cheong by ASX-traded IPH – the holding company for Spruson & Ferguson – indicative of the trend. More recently, Xenith IP Group announced what is likely the biggest deal yet in the publicly traded IP firm space with its US$113 million acquisition of Griffith Hack. According to one estimate, this transaction will mean that over a quarter of Australia’s registered patent and trademark attorneys will be employed by publicly traded companies.

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