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Exclusive: Labels hit by Chinese trademark squatters

Big-name designers are being targeted by trademark squatters in China who register the brand’s name there in order to extract money from its owners.

Drapers has been alerted to the names of several designers who are attempting to negotiate the purchase of their own trading name in China.

Although we cannot name the individual businesses, a significant number of Newgen designers, some of which are now well-established brands, are among those to have been hit.

Trademark squatting has been an issue for some time but is now coming to the fore as it appears to be preventing businesses from manufacturing in China as well as selling into it – a potentially wider-reaching issue given the number of firms that source from the country.

It is thought London Fashion Week exposure of Newgen designers has also seen a surge in the number of brands being targeted in recent weeks.

It costs approximately £2,000 to register a trademark in China, but designers are understood to have paid £100,000 to £150,000 to wrest their name from a squatter.

Both the British Fashion Council (BFC) and UK Fashion & Textile Association (UKFT) have been made aware of the problem and are working with the China-Britain Business Council (CBBC), and speaking to UK MPs in an attempt to resolve it.

UKFT director of international affairs Paul Alger said: “It is important we get a full understanding of the scope of the problem. We know some quite high-profile designers have been targeted, but we want to build a clearer picture of who it’s affecting and what the implications are.

“It would appear the vast majority of cases are where a Chinese company has decided it is a good way to extort money from European fashion businesses, although this is by no means limited to our industry. 

He added: “It’s a pretty filthy business.”

BFC chief executive Caroline Rush said: “We will be visiting Hong Kong next week for London Show Rooms and during this visit, after raising this issue with government, we will be facilitating conversations with the British Consulate and their experts to ensure we work together to safeguard our designers.”

China business adviser at CBBC Lise Bertelsen said squatting could have a “very big impact” on businesses and called on those affected to get in touch.

“Our advice is that people always consider their IP strategy before they go to market. If they aren’t registered [in China], then they aren’t covered at all,” Bertelsen said.

Squatting lowdown

● Around 30 designers, including several Newgen names, have contacted BFC/UKFT about squatting

● It can cost up to £150,000 to buy back a trademark from a squatter

● Squatting affects both manufacturing and selling into China

Readers' comments (2)

  • www.Anthony&Brown.co.uk

    No different than people taking others web address's.
    Its so important to make sure you register in China as well as UK - it is so expensive though and trademarks have to be renewed every 10 years, you need a seperate for the trademark and the logo.
    You have to trademark in most countries seperately at £2K x 2 for each country thats a lot of money to protect yourself!
    I dont really understand why it costs so much to trademark, be interesting to know where all the money goes?

    Unsuitable or offensive? Report this comment

  • After registering make sure you take action to police your brand. It’s not difficult with technology today. I’ve just seen the results of project to control brand IP and trademarks and the results are staggering.
    If you don’t Police your brand them your registration means nothing. You need to make sure that that your Bite is just as fierce as your Bark!

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