Resolving China Trademark Disputes Using Arbitration

"Traditionally, foreign companies have manufactured products in China for export and resale in Western Europe and the United States, or licensed the manufacture of goods in China to previously-known licensees. These business models did not require investors to rethink their trademark protection strategy. Companies could register their marks in their home countries or the countries where the goods were sold, and use their standard license agreements.

"All this is changing. Increasingly, Western trademark owners are entering into trademark licenses with Chinese entities in order for them to make and sell Western branded goods in China and other local Asian markets. To meet with the requirements of this new business model, companies must have a Chinese registration of the trademark. Just as importantly, they must refine their license and related agreements to reflect the particular risks associated with this market.

"One of the most significant risks in manufacturing or licensing branded goods for the Chinese/Asian markets is dispute resolution. If companies fail to think through this issue, they may find themselves in a situation where delays in local courts, jurisdictional wrangling or objections to the enforcement of foreign judgments mean that they are unable to recover damages resulting from infringements of licenses or other agreements relating to their trademarks…

"While it is not a perfect solution, a well-designed arbitration strategy can effectively manage some of these risks. Arbitration can ensure that relevant disputes will be heard by neutral and experienced decision-makers, under internationally recognized procedural rules. It will also maximize the likelihood that any resulting award will be enforceable where the other party’s assets are located. Finally, a properly deployed arbitration strategy will assist the parties in overcoming their cultural differences, and achieving an early settlement to their dispute."

Read more in this Kilpatrickstockton.com article from which the foregoing is quoted.