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Some foreign companies do not think of the importance of Chinese trade marks and simply register their trade marks in their foreign language, which may cause business challenges, especially in China.
Experience has shown us that, in China, if foreign companies do not have their Chinese versions of their original trade marks, people may tend to “invent” the Chinese nicknames or devise their own versions of the Chinese names for these marks, which may not match the business’ identities or images.
For a foreign trade mark owner, it is advisable to adopt a Chinese trade mark in addition to its mark in the foreign language. It will no doubt serve as an important marketing tool that will familiarize the Chinese-speaking people the company and its goods and/or services, especially in China.
The trade mark owner may choose a Chinese mark on the basis of its exact or similar transliteration (preferable) OR a direct translation of the original mark in foreign language. This may help Chinese-speaking people to correctly pronounce or better recall the original non-Chinese trade mark.
The Trade mark owner should also consider the meaning and the pronunciation (in Mandarin or Cantonese) of the combination of the chosen Chinese characters in the Chinese language before adopting them as their trade marks.
In practice, one Chinese version of the mark for all Chinese-speaking markets, i.e. China, Taiwan, Hong Kong and Macau, is sufficient.
Here are some examples:
LANEIGE (A French word which means “snow”)
兰芝 (China) / 蘭芝 (Taiwan) : Pronouns as “lan zhi” (resembles to the pronunciation of “LANEIGE”) and the combination of these two Chinese characters means “orchid flower”, which symbolic of high-minded individuals.
CHANEL (A French surname which means "pipe")
香奈儿 (China) / 香奈兒 (Hong Kong / Taiwan) : Pronouns as “xiang nai er” (closely similar to the pronunciation of “CHANEL”) which means “fragrance, bear, particle attached to noun” respectively.
It is also important to register the version of the mark which is (or will be) used in the country concerned, e.g. to register the simplified Chinese characters in China and traditional Chinese characters in Hong Kong, Macau and/or Taiwan.
Our experienced team will be pleased to advise on such trademark challenges.
This article is for information purposes only. Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances.
OLN's Litigation Partner Stephen Chan, and trainee solicitor Matthew Lo were invited by the Trade and Industry Department to present on the topic of “Practical Legal Matters for SMEs” on 16 February 2017.
The seminar was organized to aid small and medium sized enterprises in Hong Kong to identify possible legal issues arising from starting and operating a business, as well as common employment and debt collection issues.
With an attendance of over 60, it was a good opportunity for attendees to familiarize themselves with legal fundamentals and raise queries in relation to practical legal issues in their respective fields and businesses.
In October 2014, a paper entitled “Transparency and Beneficial Ownership” was published by the Financial Action Task Force (“FATF”).
Although that paper did not mention Hong Kong by name, the relevant recommendations stated were expressed to be “recognised as the global anti money laundering and counter-terrorist financial standard”.
FATF has consistently stated that that there must be adequate, accurate and timely information on the beneficial ownership and control of legal persons that can be obtained or accessed by the competent authorities and attaches considerable importance to this in the ongoing and highly publicized international fight against money laundering and against other unlawful activities.
In order to achieve such a statutory regime, the Hong Kong Government now intends to amend the Companies Ordinance (Cap 622 of the Laws of Hong Kong) so as to require all Hong Kong companies to obtain and hold up to date beneficial ownership information available for public inspection. Listed companies will be exempted from this requirement as they are already subject to other strict disclosure requirements under the Securities and Futures Ordinance.
As a result of the October 2014 FATF paper, Hong Kong’s Financial Services and Treasury Bureau (the “Bureau”) issue, in early January this year, a “Consultation Paper” to enhance the transparency of the beneficial ownership of Hong Kong companies, including requiring Hong Kong companies to maintain a register of persons with significant control (a “PSC Register”) for each company. Such a register would be open to the general public for inspection.
What does beneficial ownership actually mean
Any person who satisfies one or more of the following will be affected:
(a) directly or indirectly holds more than 25% of the shares;
(b) directly or indirectly holds more than 25% of the voting rights;
(c) directly or indirectly holds the right to appoint or remove a majority of directors;
(d) otherwise has the right to exercise, or actually exercising, significant influence or control; or
(e) has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or a firm whose trustees or members satisfy any of the first four conditions.
The Bureau proposes that each Hong Kong company be required to identify and keep a register of people falling into one or more the above categories. This requirement will extend to legal entities with significant control over the company. This is intended for individuals who exercise control through a holding company or other structures. To enable a Hong Kong company to maintain its PSC Register, each company will be obliged to take reasonable steps to ascertain its registerable individuals and legal entities.
Companies will also have to enter on their individual PSC Register details of an authorised person responsible for providing such information and for providing further assistance to law enforcement agencies, as and when required.
Public Inspection of PSC Register
Each Hong Kong company will be required to make its PSC Register available for inspection by any shareholder without charge or by any member of the public on payment of a fee.
A company must notify the Registrar of Companies where its PSC Register is kept, if not kept, at its registered office.
The consultation period ends on 5th March 2017.
Assuming that the Hong Kong Government does introduce legislation into the Legislative Council, it is likely that the Hong Kong Government will want to enact legislation prior to the next FATF evaluation visit to Hong Kong, which is scheduled for October and November 2018.
Oldham, Li & Nie