If there's one thing we keep hearing about the fashion business (and business in general for that matter) it's that China is a hot spot for expansion. The country's rapid economic growth means a new market and big opportunities for international brands, but as it turns out, things are not so simple over there and even mega brands like Hermès can make major business mistakes.
According to WWD, Hermès recently lost an appeal to trademark the Chinese version of its name in China. If you're thinking, "Wait, there's a different version of Hermes for China? Why?" You are not alone. We thought the same thing. Apparently, Chinese people call Hermès Ai Ma Shi, but some other Chinese apparel company registered that trademark in 1995. “A lot of the time, American companies go in [to China], and the Chinese start calling them something else,” Seattle intellectual property lawyer Dan Harris told the paper. “You need to register that too.” Apparently, Hermès is too difficult for the Chinese to pronounce, though it's not like all Americans pronounce it correctly either.
Still, this shouldn't be a big deal since Hermès still has the name Hermès, right? Wrong. According to Beijing lawyer Stan Abrams, the Chinese local version of a brand's name has more value than the original foreign-language brand name. Thus, unless they find a way to convince the China Trademark Appeal Board to let them register the Chinese brand name, Hermès might be kind of screwed.
Without being registered as a trademark, Ai Ma Shi opens itself up for infringement. Paul Ranjard, a lawyer with the Wan Hui Da Law Firm and Intellectual Property Agency in Beijing, told WWD: “So if the infringer managed to be quick and opened lots of shops and developed quickly, you can imagine, then it becomes impossible to stop that." Apparently, it's happened before.
Consider yourselves warned, international brands expanding to China.