Michelin Sues Hong Kong Company for Trademark Infringement 06.24.2021
Michelin Sues Hong Kong Company for Trademark Infringement
Michelin, the French-based Company behind the internationally-renowned restaurant ratings guide, namely “Compagnie Générale des Etablissements Michelin”, recently filed a law suit against a Hong Kong company operating business via an online platform, for trademark infringement and passing-off, seeking damages and injunctive relief.
The French-based company is the owner of registered trademarks for various “Michelin” and “米芝蓮”(Chinese transliteration of “Michelin”) and related trademarks in Hong Kong. It has accused the Hong Kong company that it had never obtained license or authorization from them to advertise, supply and sell, or otherwise to use its trademarks for business, nor had the defendant sought consent from them to use the word “Michelin” in its name.
While it is premature to assess the strength of Michelin’s case, the incident rings a bell about the proliferation of complaints against shadow companies in Hong Kong.
Shadow companies are registered companies in Hong Kong that usually use well-known brands or trademarks of others as part of their names. These companies generally do not conduct business in Hong Kong. Instead, they conduct counterfeiting and other illegal activities in mainland China under the name of a Hong Kong company. The purpose is to deceive potential consumers while avoiding legal liability.
In Hong Kong, the registration of a company in the Hong Kong Companies Registry does not confer any trademark rights on the company name. Compared with Hong Kong company registration, Chinese business registration can only be obtained through a more stringent approval process. Therefore, local Chinese parties often mistakenly believe that the shadow company is a subsidiary or licensee of the authentic brand owner and the company registration certificate serves as a superficial evidence that the company has the legitimate right to deal with the branded products.
Demand for Change of Name
If the identified shadow company is established for less than 12 months, the Hong Kong Company Registry has the authority to demand the company to change its name. In the case of a shadow company registered for more than 12 months, the brand owner would have to initiate a court action for infringement and/or passing off. While shadow companies usually do not defend litigation and default judgments would normally be available within few months, the shadow company would then be demanded for changing its name thereafter.
Brand owners are therefore recommended to engage trademark watching services to oversee against new trademark applications in Hong Kong, China and elsewhere in order to take opposition procedures against any conflicting similar trademark applications on timely basis as well as to monitor the shadow companies’ counterfeiting activities.