Trump’s trademark tests Chinese law

China’s Valentine’s Day present to Trump could put him in legal jeopardy.

The headline reads: “President Donald Trump delivers a mighty shock to America.” CREDIT: AP Photo/Andy Wong
The headline reads: “President Donald Trump delivers a mighty shock to America.” CREDIT: AP Photo/Andy Wong

When China awarded President Donald Trump a long-coveted trademark of the “Trump” brand this week, it appears to have violated the text of Chinese trademark guidelines. Chinese legal standards prohibit trademarks of the names of foreign leaders.

Trump secured exclusive rights for the use of his name for “building construction services” in China on February 14 after a 10-year legal battle. But he had little success in his quest for a Chinese trademark before he became the Republican nominee last summer.

Any appearance of preferential treatment for the U.S. president could land Trump in legal trouble back at home.

Prohibited trademarks in China

In China, the rules for trademarks are established by China’s State Administration for Industry and Commerce (SAIC). The Trademark Office of SAIC is responsible for trademark registration and administration and issues the Trademark Review and Hearing Standards.

Section 9 of the Chinese Trademark Review and Hearing Standards, published online on January 5th, 2017. Translation by Blaine Johnson.
Section 9 of the Chinese Trademark Review and Hearing Standards, published online on January 5th, 2017. Translation by Blaine Johnson.

The relevant section of the standard is entitled: “Review of logos forbidden from trademark.” Among the trademarks that are prohibited are those that “harm socialist moral customs or have other ill effects.”

The Chinese code lists several categories of prohibited trademarks, along with examples. The eighth category of prohibited trademarks includes those that “harm socialist moral customs or have other ill effects,” including those that have “ill effects related to politics.” This is further defined, under one subcategory, as trademarks that are “the same as or similar to the name of leaders of national, regional, or international political organizations.”

Chinese law prohibiting trademarking the names of political leaders, using Mao Zedong and Vladimir Putin as examples, published online on January 5th, 2017. Translation by Blaine Johnson.
Chinese law prohibiting trademarking the names of political leaders, using Mao Zedong and Vladimir Putin as examples, published online on January 5th, 2017. Translation by Blaine Johnson.

The Chinese standards — an excerpt of which is pictured above — include several examples of prohibited trademarks. On the left, there’s an example of a trademark for a variation of the name of Mao Zedong, the founder of the People’s Republic of China. On the right, there’s an example of a trademark for Russian President Vladimir Putin (PUJING).

The fact that Trump’s trademark is prohibited under Chinese standards has caught the attention of top experts in the field.

“The Chinese trademark examination standards prohibit trademarks that hurt social morality or have other ill political effects. Amongst the enumerated bad political effects are trademarks that are identical or similar to a country, region or international organization’s leader’s name,” Mark Cohen, one of the leading experts in China intellectual property law, wrote on his blog.

Cohen, however, does not go into further detail (and did not return ThinkProgress’ requests for comment). According to some experts, the provision was only intended to apply to third party applicants, and a political leader applying for their own name would be an exception to the guideline.

That exception is not written in the guidelines, and is based rather on the lawyers’ interpretation what the law is intended to achieve.

ThinkProgress was unable to find any precedent for a foreign leader being granted a trademark for their own name. That is likely because Trump’s application, for a political leader, is highly uncommon — few, if any, other foreign leaders also own business that trade on the value of their own name. In all probability, no other leaders have applied for a trademark.

Trump would then be the first to benefit from this specific interpretation of the prohibition.

Critically, the trademark process is opaque and subjective. The reasoning behind Chinese trademark law decisions is not public, and decisions are often only one or two lines, Mathew Dresden, an Seattle attorney who specializes in Chinese intellectual property law, told ThinkProgress.

That leaves them open to multiple plausible interpretations of motivations — and would also make a politically-motivated decision easier to camouflage.

“I think if you’re so inclined you could ascribe certain motives,” Dresden told ThinkProgress, adding that that applied to both the case that the decisions were politically motivated, and to the case that they weren’t. “It’s really difficult to look at this and say it’s because of this or that reason.”

Trump’s lawyers insisted the decision was merely the routine culmination of a long legal battle, and that Trump got no special treatment.

“The Trump Organization has been actively enforcing its trademark rights in China for more than a decade and its latest trademark registration is a natural result of those efforts — all of which took place years before President Trump even announced his candidacy,” Alan Garten, the Trump Organization’s chief legal officer, told CNN.

A 10-year legal battle

Trump filed for the original trademark on December 7, 2006. He was not successful. A man named Dong Wei filed for a similar trademark on November 24, 2006 — beating Trump by two weeks — and, since China awards trademarks on a first-to-file basis, Wei’s claim won out.

Trump spent the next 10 years fighting for the trademark over “TRUMP.”

“Trump opposed [Dong’s trademark], and was unsuccessful. Then he appealed that, and he was unsuccessful. And then it went on and on,” Dresden told ThinkProgress. “Meanwhile, Trump’s trademark application was rejected. And he appealed that, and he was unsuccessful. Then he appealed that, and it was unsuccessful. And on and on.”

Trump appealed the decision all the way up the Chinese court system to the Beijing High People’s court, losing every time.

Trump’s last defeat in the case was in May 2015. He declared his candidacy for the presidency one month later.

Following his May 2015 setback, Trump’s lawyers went back to the Chinese Trademark Review and Adjudication Board, the first rung in the ladder. His lawyers made a parallel but slightly different argument, asking the Board to invalidate Dong’s trademark specifically with regards to construction services. This time, they were successful.

“This is the thing people have seized on as being strange — and it is strange.”

“It should have been the same argument, and it was before the same body. And this is the thing that people have seized on as being strange — and it is strange,” said Dresden. “Because this was before the same appellate body and he was successful. He’d been trying for years and years, so why did they say, ‘OK, yeah, now we are going to invalidate the competing trademark?’”

That decision was published on September 6th, 2016. According to Dresden, decisions are made a few months before publication. That puts the decision invalidating the competing trademark in June or July — right around the time when Trump clinched the Republican nomination for president.

The invalidation of Dong’s trademark cleared the way for Trump’s trademark. Trump had filed another application for the trademark in 2014, which he appealed after it was denied. After Dong’s trademark was invalidated, it was this trademark that went through.

Trump’s trademark was granted provisionally on November 13th, 2016 — just days after he became the President.

China ignoring its own laws creates legal problems for Trump

If China approved Trump’s trademark because of his current position of political power, that could present a problem for Trump himself.

That’s because Article 1, Section 9 of the U.S. Constitution prohibits “any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.”

Many legal scholars interpret this clause broadly and say it applies to a foreign state providing the president virtually anything of value — like, for example, a trademark.

If China granted a trademark to Trump in violation of existing Chinese legal standards, it “would seal Trump’s fate from an emoluments clause perspective because it would show beyond doubt that this unusually valuable trademark was indeed a ‘present,’ and not simply a recognition of Mr. Trump’s preexisting rights under the law of China,” Larry Tribe, a nationally renowned constitutional scholar and a professor of constitutional law at Harvard Law School, told ThinkProgress.

In other words, it becomes harder to argue that China is giving Trump the same treatment that anyone would be legally entitled to receive.

That would “eliminate the only defense the Trump people have offered against the charge that accepting this ‘present’ put him in deliberate violation of Article I, Section 9 of the U.S. Constitution,” Tribe said.

One China, one trademark

The timing of China’s moves has attracted attention.

The first decision to tentatively grant the trademark was made just days after Trump was elected president. The next month, Trump angered Chinese leaders by saying the United States was not bound by the “One China” policy, which officially treats Taiwan as part of a unified China.

Trump said he didn’t feel the need to abide by a “One China” policy “unless we make a deal with China having to do with other things…”

On February 9, Trump called Chinese President Xi Jinping. “President Trump agreed, at the request of President Xi, to honor our ‘one China’ policy,” according to a White House statement.

Five days later, Trump was officially awarded his trademark by the Chinese government.

Although the timing has raised eyebrows, there is no direct evidence of a quid pro quo. But from the perspective of American law, it doesn’t matter.

“Whether there was a direct causal connection between that special dispensation from Chinese law and Trump’s remarkable turnabout from his pre-inauguration suggestion that the one-China policy was up for grabs is not legally material, although the danger that there was precisely such a quid pro quo and thus an instance of outright bribery is among the things the Foreign Emoluments Clause was designed to head off at the pass,” Tribe said.

It is the fact that Trump received something of value from China, in apparent violation of Chinese rules, is what places him in legal jeopardy.

Sen. Diane Feinstein (D-CA) sounded the alarm about Trump’s conduct in a statement released Friday.

“China’s decision to award President Trump with a new trademark allowing him to profit from the use of his name is a clear conflict of interest and deeply troubling. If this isn’t a violation of the Emoluments Clause, I don’t know what is,” Feinstein said. “And this is just the start. Media reports state that the president has dozens of additional trademark applications pending just in China.”

Trump’s expensive obsession with his Chinese trademark

How valuable is Trump’s name in China to him? Very, according to a letter he sent to the Obama administration asking it to intervene in the matter in 2011. Trump sent a fiery letter to Commerce Secretary Gary Locke that was obtained by the Huffington Post in a FOIA request.

“I spent hundreds of thousands of dollars in legal fees to secure my own name and globally recognized brand from Chinese individuals who seek to trade off of my reputation,” Trump wrote. “Despite more than a year of waiting, the Court determined that the illegal use of my internationally recognized name does not breach the truth principle applied by the Court.”

Trump seemed particularly incensed the judges didn’t find that he was famous enough to deserve trademark protection, despite, in his words, “having had books that became best sellers and The Apprentice television show, which was big in China.”

Trump also details the lengths he went to prove his fame to the court at the time:

CREDIT: Screenshot via The Huffington Post
CREDIT: Screenshot via The Huffington Post

China’s State Administration for Industry and Commerce could not be reached for comment. The Chinese Embassy told CNN that Trump’s case was “handled in compliance with China’s trademark law.”

Blaine Johnson, a policy analyst for China and Asia policy at the Center for American Progress, provided the translations for this piece. ThinkProgress is an editorially independent site housed at the Center for American Progress Action Fund.

This article has been updated with further information.

UPDATE (3/9/2017):

Since this article, China has granted Trump 38 new trademarks, renewing the debate about the potential conflicts posed by Trump’s continued ownership of his businesses.

ThinkProgress originally reported on a provision in Chinese Trademark guidelines specifically prohibiting trademarks for the names of international leaders (reproduced in this article). In further reporting, several experts in Chinese IP law have argued that this provision does not apply to politicians applying for a trademark for their own name, but only to third parties applying for the trademark.

“The standard interpretation is that this is for the protection of the leaders and against third parties,” Dresden told ThinkProgress. “It doesn’t say that, but that’s how it’s interpreted.”

That exception is not specifically written into the guidelines, and is based rather on interpretation what the law is intended to achieve.

ThinkProgress was unable to find any precedent of a foreign leader being granted a trademark in China, though reporting indicated that all trademarks filed by third parties for the names of previous U.S. presidents Obama and Clinton, and for Russian President Vladimir Putin, were denied.

Trump’s situation, however, is highly uncommon. Few, if any, other foreign leaders also own businesses that trade on the value of their name. Trump is likely the first foreign leader to benefit from this specific interpretation.