Many Polish companies showcase their products at various trade fairs and business events held in Asia. Unfortunately, these companies are often unaware that fraudsters are actively operating in such situations. What does this scheme entail? Chinese entities, after inspecting and examining the goods, register trademarks in China that are identical to those registered by Polish companies in Poland, particularly in the food industry. The goal is simply to make a profit. Interestingly, a thorough check of the trademarks is also conducted online, so it is not necessary to personally present the products in Asia. The possibility of legal fraud is enabled by the laws in force in China, where the principle of “first come, first served” prevails in trademark registration. Local entities exploit the law to register popular trademarks from other countries with the intention of reselling the rights to the rightful owners. Examples include the word and word-graphic trademarks of Polish companies that have n affected, such as Lubella, Łowickie, Łaciate, and Mlekovita.
Fraudulent activities usually come to light when Polish companies attempt to enter the Asian market and, due to a previously registered trademark, are unable to effectively introduce their flagship products to that market. Interestingly, the lack of protective rights to one’s trademark can result not only in the loss of goods but also in a general prohibition on trade. In such a situation, is the Polish entrepreneur immediately at a disadvantage? Not necessarily, although they are still in a very difficult position.
First, it is possible to file an opposition to the registration of the disputed trademark, but this option is limited to a period of three months. The second possibility is to initiate an administrative procedure aimed at invalidating the disputed mark, which, however, can prove to be extremely difficult in the maze of Chinese regulations. The last step that a Polish entrepreneur can take is the one from which the fraudster benefits the most, namely, paying a “ransom,” which can amount to several dozen or even several hundred yuan. Then, the protective rights to the trademark “return” to the rightful owner.
As you can see, fighting against Chinese fraudsters is very difficult and usually depends on strict control of the Chinese trademark market. Undoubtedly, what encourages fraudsters is the low cost of registering protective rights (499 dollars), the local law, and, above all, the lack of significant consequences for such actions.
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