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Facebook Wins IP Legal Battle in China

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By Jonathan R. Tung, Esq. on May 09, 2016 3:57 PM

According to The Wall Street Journal, Facebook walked away with a ruling in favor of an American company ... in China!

But is this a sea-change for intellectual property rights in China?

How It Began

Despite being blocked in the world's most populous country, Facebook's name still carries a bit of a cache. It may be banned, but Chinese city-goers are aware of it. And its banned status makes it all the more alluring and taboo. Plus, being an American brand certainly isn't a bad thing.

So, when Zhongshan Pearl River Beverages first registered the term "Face Book" with China's Trademark Review and Adjudication Board in 2011, it struck many as being less than coincidental. The company was granted use of the term three years later in 2014.

Revoked

Facebook valiantly objected through the country's legal system. It's a bit of surprise that the Beijing Higher People's Court revoked the lower Board's decision to grant use of "Face Book" to Zhongshan.

But it's not a total victory -- and it could all be a song and dance. After all, the board will have to revisit its decision. And like American courts, remand is rather grudging.

First to File

Unlike America's doctrine of "first to use" (at least, in most American jurisdictions), China operates under the "first to file" system when it comes to trademarking. This means that regional trademark and patent trolls will target celebrated brands, trademark the names locally and drag the Western companies through China's courts or extract a hefty payment for the name rights.

Whether or not Facebook is victorious in the end, the reversal in the social media company's favor does set a tone that companies will at least seemingly get a chance inside China's courts. 

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