Asia is becoming an increasingly important market for trademark owners. However, when entering into trademark licensing agreements, brand owners should not ‘copy and paste’ the rulebook developed in the West.
While a number of Western brands are now achieving remarkable success in Asia through corporate brand licensing, no matter how long the list of highly acclaimed licensing deals, there are always spectacular failures. As a brand licensor, it is therefore critical to understand some of the key differences in licensing practices in Asia versus the West, and to adapt your licensing strategy accordingly.
Asia is already a hotbed for corporate brand licensing. From Shanghai to Seoul, and across various industries, many large corporate brand licensing deals have already been struck. When deals fail, this usually results from a lack of awareness of the key differences between licensing business practices in Asia and the West. Too many Western brand licensors simply ‘copy and paste’ their licensing programmes from the United States or Europe to Asia. This approach can be risky, as considerable damage can be done to the brand and you may find yourself unable to control the fallout. The differences in licensing practice can be either highly visible or difficult to spot, with numerous divergences that could make or break a licensing deal in the long term.
Once you have identified specific Asian countries in which you plan to launch licensing programmes, it is important to review the trademark registration status in each of these countries before moving forward. It may seem an obvious point to make, but Asia is not a homogenous market, and there are dramatic variations in languages, legal and business practices which you should be aware of.
For example, in addition to registering your trademark in its original language, it is advisable to register the mark in the distinctive Chinese language, even if the Chinese mark does not appear on your products. This is critical because Chinese consumers will remember your brand in its Chinese-language iteration. If a foreign mark does not have a Chinese name when it enters the Chinese market, licensees, retailers or distributors will have to give it one for practical commercialisation in the market. Unfortunately, and without your knowledge, the Chinese marks can then be registered by third parties – after which it becomes very hard for you, the genuine owner, to claim back the trademark rights.
In addition to trademark protection, you should use copyrights to protect your catalogues, brochures and website content – especially if you intend to pursue a bundled licence (as is covered later in this article). Copyrights are granted automatically, but it is advisable to register them in your key markets – especially in India and China, where voluntary registration is allowed. Copyright registration will be accepted as evidence of copyright ownership in the event that you wish to pursue an act of copyright infringement and will greatly reduce the evidence required, thus saving your company extra costs in a long and complicated process.