As a Los Angeles patent and trademark attorney, many of my clients ask about the possibility of getting their invention stolen when manufacturering in China. Sorry to scare you, but now you have something else to worry about. Recently, companies manufacturing in China have come across some costly and time-consuming trademark predicaments. It seems that certain players in the Chinese market are using the Chinese trademark system to swindle unsuspecting American companies.
These hucksters sell trademarks back to companies, manipulating the Chinese legal and trademark system. It works something like this: An American company decides to manufacture their product in China, and instructs the manufacturer to affix the American trademark. This company however fails to file a Chinese trademark application. A Chinese trademark trafficker then quickly registers a trademark (a duplicate version of the American trademark) with the Chinese trademark office. Then, with production already going on, this trademark trafficker appears on the scene. In order to either manufacture the product or export it after manufacture, the swindler must be paid off. Additionally, if the American company wants to switch manufacturers in China, someone must be paid.
Lately, Chinese trademark and patent laws have become a hot topic in the international business arena. It is important to know what you are getting yourself into if you are thinking of outsourcing or contracting there. Registering a Chinese trademark is crucial before any steps are taken towards manufacturing or production.