When considering international expansion, a company should take moves to protect its brand, name and trade secrets before embarking overseas, according to participants in a seminar at the Benjamin Cardozo School of Law at Yeshiva University in New York.
Helen Su of Alston & Bird LLP told the audience Wednesday night to consider the case of basketball icon Michael Jordan when weighing the importance of intellectual property (IP) protection.
When athletic apparel company Nike Inc expanded the Air Jordan brand to China in the 1990s, it registered only the English version of the famous name belonging to the ex-NBA star.
Later, a family-owned shoe company in China registered "Qiaodan," the Chinese transliteration of Jordan.
Since then, Qiaodan Sports has registered dozens of other trademarks that seem related to Michael Jordan, including its own silhouette logo.
In 2012, Jordan requested that Chinese authorities revoke the trademark of Qiaodan Sports, accusing the company of misleading consumers about its ties to the former NBA player.
Authorities refused Jordan's request, and a lower court in Beijing did the same. He appealed to the Beijing Higher People's Court, which also ruled against him.
Jordan's plight illustrates why Jamie Underwood, another attorney at Alston & Bird, counsels companies to conduct an IP audit and develop a "global strategy for IP protection and enforcement. If you have a good idea, someone will try to copy it," she said.
The Jordan case also illustrates another peculiar part of Chinese law regarding trademarks.
In the US, trademarks are given to those who use it first. "China gives trademarks to whoever files for it first," Su said.
Su said China has taken steps to strengthen its IP protections.
"I also think US companies now have a better understanding of Chinese law in these matters," Su said.
Cindy Yang of Schiff Hardin LLP said better IP protection is "making a robust play in Chinese courts".
"There have also been improvements in trade secret and confidentiality issues. There is progressive thinking on this now," she added.
While conceding that there has been some progress on IP in China, Bryon Benevento of Dorsey & Whitney LLP said patent protection is an area that could benefit from advancements.
Prior to the panel on IP, a group of attorneys and professionals involved in startups discussed how young companies can create a strong foundation.
Kathryn Bond of Kat Bond Law, who has represented filmmakers and other content creators, said creative entrepreneurs are sometimes reluctant to acknowledge the importance of legal guidance.
"Legal affairs are low on the totem pole for creative and fashion startups," said Bond.
"They are usually concerned with getting things into production."
Bond noted that startups often are preoccupied with financing and relegate legal to just finding a structure for the company.
"In the US you have got to have a work-for-hire agreement to help determine who owns the idea. That should go hand-in-hand with financing."
The seminar was sponsored in part by the Asian American Bar Association of New York, the Chinese Business Lawyers Association and The Cardozo Journal of International and Comparative Law.