[Exclusive] Chinese Trademark Brokers Targeting CJ, Ottogi, and bhc as 'Prey' Amid Obstruction of K-Brand Expansion...

Registered Only Korean Trademarks for 'Trademark Business'... Over 1,100 Monopolized Annually
Blocking Chinese Market Entry of Food Brands with 'Counterfeit Business'... Legal Disputes Costing Tens of Millions
Kyochon Sanctions 'Gyochun' via Prior Registration... CJ Prevents 'Counterfeit Damage' with Quick Objection

Image of bnc Chicken trademark registered by a Chinese trademark broker. Photo by Lee Seon-ae lsa@

[Asia Economy Reporter Lee Seon-ae] Domestic food and dining companies are becoming prey to Chinese trademark brokers. When preparing to enter the Chinese market and attempting to file and register trademarks, they find that numerous trademarks imitating their products and brands have already been registered, causing setbacks in business development. These brokers obstruct market entry by preemptively filing and registering trademarks across various product categories and continuously inflict damage by demanding high settlement fees and usage royalties.

According to the Chinese Trademark Office and related industries on the 5th, a Chinese broker named Mr. K holds trademark rights for numerous domestic food and dining companies. Mr. K has filed around 400 trademark applications, with about 100 already registered. He has preemptively secured trademarks mainly targeting companies with high potential for entering China or those actively expanding their business. Among the companies targeted by Mr. K, many are food and dining businesses. Mr. K has chosen brands such as BHC (bhc Chicken, Class 43), Danal (Dalkom Coffee, Class 40), Kyochon F&B (Kyochon Chicken, Class 40), G&Food (Goobne Chicken, Class 40), Eongteori (Eongteori Saenggogi, Class 43), Haengbokhan Gui Sesang (Yeontabal, Class 43), as well as large corporations like CJ CheilJedang (Haechandle, Class 31), Ottogi (Ottogi, Class 31), CJ Foodville (Tous Les Jours, Class 40), Harim (Harim, Class 29), Pulmuone (Pulmuone, Class 30), and Sempio (Sempio, Class 31).

Mr. K registered the trademark 'BNC CHICKEN' with the intent to obstruct the Chinese business of bhc Chicken, the second-largest chicken franchise in Korea. Moreover, the product category corresponds to food and beverage service industries. For bhc Chicken to enter China, it essentially means they must engage in a trademark dispute with Mr. K. If BNC Chicken operates in China as a counterfeit bhc Chicken, bhc Chicken may face unwanted legal conflicts. Previously, Sulbing suffered from a counterfeit 'Sulbing' in China that infringed on its trademark rights; however, the counterfeit party reported the genuine company, leading to legal disputes and a loss, forcing Sulbing to withdraw from the Chinese market. A bhc Chicken representative said, "We currently hold trademark rights in Chinese characters, and even if similar brands like BNC appear, customers can sufficiently distinguish them, so we are not overly concerned about entering China."

Harim and Pulmuone filed trademarks using their Korean brand names in Classes 29 (frozen, dried, and cooked fruits and vegetables, dairy products, eggs, etc.) and 30 (coffee, tea, bread, pastries, and confectionery, vinegar, sauces, etc.). Dining brands like Eongteori Saenggogi and Yeontabal were filed under Class 43.

Photo of a Chinese trademark broker filing a trademark for CJ CheilJedang's Haechandle brand, a domestic food company. Photo by Lee Seon-ae lsa@

The problem is that while companies face blatant "being robbed in broad daylight" situations, smaller companies find it harder to respond. Most often, companies only discover the trademark registrations late during market research for Chinese entry or after being notified by the government (Korean Intellectual Property Office).

In China, even foreign brands are subject to the rule that whoever files a trademark first within China gains priority, making it difficult to reclaim trademark rights. Before registration, one can file an opposition with Chinese authorities, and after registration, one must file for invalidation to nullify the registered trademark. These processes cost at least tens of millions of Korean won and do not guarantee victory.

An official from a dining company said, "When we conducted market research before entering China, we found that many trademarks of our brand were already registered," adding, "Reclaiming the trademark would require not only time but also costs amounting to tens of millions of won, so we effectively gave up on entering China." The official also revealed, "Chinese brokers contact companies demanding money to reclaim trademarks. Some companies, judging that winning is difficult due to differences in Chinese characters of the preemptive trademarks, pay the demanded settlement to retrieve their trademarks."

Another dining company official lamented, "We were contacted by a Chinese trademark broker just three months after starting our business, and around that time, trademark applications were filed in China. We engaged in legal disputes to reclaim the trademark but to no avail, so we had to enter China with different trademarks and logos."

A patent attorney explained, "There should be legal grounds to prevent domestic trademarks from being registered in China, but Chinese trademark law does not provide such grounds. Even if objections are raised, it is difficult to win."

CJ CheilJedang, upon discovering that a Chinese trademark broker had filed a trademark application for the Haechandle brand, filed an opposition and won, subsequently completing the trademark registration for Hochandle as well. The photo shows the Hochandle trademark registered by CJ CheilJedang with the Chinese Trademark Office. Photo by Lee Seon-ae lsa@

However, some companies have protected their trademarks by responding swiftly on their own. CJ CheilJedang identified that Mr. K filed the trademark 'Haechandle' in 2015 and filed an opposition. They successfully reclaimed the trademark and even registered the Chinese characters 'Ho Chandle' used by Mr. K, thus resolving the counterfeit trademark issue. The legal team detected and responded before the government was aware. CJ CheilJedang explained, "We were able to respond because we conduct continuous market research while doing business in China and detected the issue early."

Ottogi's trademark registration falls under Class 31 (unprocessed agricultural, aquaculture, horticultural, and forestry products, fruits, vegetables, animal feed, beverages, malt, etc.), so there is no disruption to its Chinese business. An Ottogi representative said, "We mainly export ramen to China and have pre-registered all related trademarks to protect them," adding, "There are no products corresponding to Class 31, so there is no disruption to our Chinese business." However, if Ottogi expands into products under Class 31, exports to China may face obstacles.

Image of Ottogi trademark registered by a Chinese trademark broker. Photo by Lee Seon-ae lsa@

Trademark registrations for Tous Les Jours and Kyochon Chicken correspond to material processing industries, so there is no impact on their franchise businesses. In particular, regarding the counterfeit 'Kyochun Chicken' rampant in China, Kyochon Chicken successfully led measures to remove counterfeit signs. A Kyochon Chicken representative said, "Understanding the importance of trademark rights, we registered trademarks in over 130 countries early on, enabling us to enter China." Kyochon Chicken entered China in May 2009 and currently operates four stores stably.

Meanwhile, as K-brand popularity rises riding the Korean Wave, damage caused by people who collect and register only Korean trademarks to engage in 'trademark business' is increasing annually. The number of Korean trademarks harmed by Chinese trademark brokers surged from 406 cases in 2016 to 588 in 2017, and 1,142 in 2018. Last year, about 700 Korean trademarks were reported as damaged. Trademark brokers are those who have preemptively registered three or more Korean company trademarks without authorization, mainly by securing English and Chinese trademarks of popular domestic trademarks. It is reported that about 20 active trademark brokers monopolize around 1,100 trademark rights.