East Meets West - A Trademark Practice in the US & China!

Nadaline Webster,

This week we are interviewing Amy Hsiao, a sought-after US-based trademark attorney and brand strategist with expertise on Chinese Trademark Law and partner at Swanson and Bratschun. She is also a guest speaker in our upcoming webinar about Chinese trademarks.

I notice you were born and grew up in Taiwan; why did you come to the US?

Growing up in Asia, as you probably know, top grades are demanded of students. And if you have top grades, you are supposed to become a teacher because teaching is the most respected profession and you actually get paid more than lawyers (at the beginning of your career, of course). I was accepted to law school but all my teachers, professors and parents told me, “Don’t go to law school”, which is very different from Western attitudes and culture. So, I actually went to the best University for teachers. But going into the teacher’s training program I realised that I was too “loud” and lacking in the right kind of patience to be a teacher! There was just no way.amy_headshot_picture_1024.jpg

I was young and very naive when during my junior year in college I joined an exchange program in Canada and I was on the English debating team.  I used to debate in Mandarin in China and I thought it would be cool to debate in English. So I actually got selected to the debating team and the professor told me that I would probably make a good lawyer. I said to him that I had missed that opportunity and would not be able to go to law school any more. It was then he told me that in the US, students went to law school after finishing college and asked me why didn’t I take the LSAT? And that’s how I ended up being here, because I took his advice.

So how did you go from there to the world of IP and trademarks?

After getting my JD, I started out as a finance attorney and doing all the wonderful work that actually led to the 2008/9 crash on Wall Street - that was me! (just kidding). When the stock market crashed, our group had been doing work with all the housing, mortgages, etc., so it hit us hard. With the crash, 90% of the deals went away and the law firm asked, “Hey, aren’t you Chinese?” and I said yes. They said “Do you speak, read and write Chinese?” and I said yes, I’m a native. And so they asked had I thought about going into trademark law. At that time, China trademark attorneys were very rare and they thought I should perhaps get immersed in trademark law because of my language and cultural background.

What was the biggest challenge when you first came to the US?

The biggest challenge of course was language. I did not learn English until I was 19 years old. When I came to law school, that was my first time ever in the US.  And it so happened that I ended up going to law school in the southern part of the US because they gave me a full scholarship. So imagine this Asian kid with a huge amount of luggage going to the deep south, home of fried chicken, sweet tea and southern accents. And I thought ok, I can learn more English, I can manage this but, oh my gosh, when I sat down in the front row in my first law class, I could not understand a word. Because it was all legalese spoken with a Southern accent. I didn’t learn English typing either and there I was sitting in the front row and this feeling of horror crept over me listening to the typing noises from all around me and I realised, “Oh my god, the American students take notes on computers”. I had to learn how to type...quickly...on day one...in the JD program!

A law school professor at the JD program later described me as “deer caught in the headlights” – could not be more fitting!

There was also an element of culture shock to the move. For example, in China we eat mostly fresh fruit and vegetables, you just take it for granted. And during my first year in the US, I was at the thinnest point of my life because I did not know where to go to or how to buy fresh veggies. All I could see was people going to the vending machines, putting some quarters in and eating the crackers and candy bars. And it was very strange to me because we would not eat crackers nor candy bars for lunch, or at any other time, but in the US people seem to do that very often. So I was just this odd Asian kid standing next to the vending machine trying to understand what was going on. And I was embarrassed at how long it took me to realise that oh my gosh, this was their lunch.

What do you consider to be your greatest achievement to date?

Personally, I’m very proud of myself for being brave enough to make the decisions that brought me here. Deciding to become a lawyer in the US was no small feat and it was not an easy journey. At the time I was 22 and had very little money.  I came to the US with only a very large suitcase and there were many people, including seniors and teachers, who told me “Amy, this is stupid, you’ll never make it. This is an impossible pipe dream”. Teaching in China is a very secure and well-paid job and so it was difficult to walk away from but it just wasn’t right for me.  The hardest part was coming here and not knowing a soul or anything about the culture and I am most proud to have made it to where I am today.

In my professional career, my biggest achievement is a book which I translated titled, “Landmark Trademark Cases in China”. After ten years of practice, you see a lot of gaps in understanding and I have heard a lot of horror stories. There is so much misunderstanding, which makes it challenging for lawyers inexperienced with the Chinese system to get it right. When they get it wrong, it is the businesses that take the fall ultimately. In some cases, they disappear. So much of their hard work disappears and so I’m driven with a mission to improve that situation. Part of that is my background too. My family were street vendors in Taiwan and I know what it is like to live from paycheck to paycheck.  The success or failure of any business will impact the employees that depend on those paychecks and their families. So it is important to me both on a personal level and a professional one.

It takes a very specific background to navigate it successfully - you need native language skills in both English and Chinese on a legal level and you also need years of trademark practice to be able to translate and understand the concepts (not just the words) that underpin the system. To have been asked and selected by the Chinese authorities to work on translating this book and knowing how important it is to build bridges in understanding, I was very humbled and honoured.

What is the biggest difference between Western and Chinese systems that gets business in trouble?

In the US, Europe and pretty much everywhere in the Western World, if you start using a mark or your mark is commercially well-known (if you are a famous winemaker in France, for example), you will acquire rights to some degree that no one can take from you. But that is a Western idea. In China and some other Eastern countries however, it does not matter if you are the first to use the mark or if it is a well-known brand for 100 years outside China. If your distributor, your best friend or your former employee simply file for your mark inside China, they can take your brand away. That is the number 1 key difference.

So what does that actually mean? I meet so many people from companies who are doing sourcing or manufacturing in China or Indonesia, for example, and they didn’t bother to file their mark because it was well known outside of China. And many times, unfortunately, in about 3 years, your distributor will file your mark. At that point, it could easily cost tens of thousands of dollars to even hope to get it back.

What are the biggest challenges of managing global trademark portfolios?

The time difference is probably the most painful part of that process. To illustrate the problem, two nights ago, somebody in Asia had requested a conference call and of course we accommodated that request.  So the call was initially scheduled for 3 am New York time. For me, the customer’s needs are always first and I decided not to go to bed but stay up and just power through. At 2:45 am I received an email to say that the original time set was incorrect and ask if we could make it 4 am instead. Of course, that was fine and we changed it to 4 am. At 4 am I got on the call and there were some technical issues and in the end, we didn’t have the call until 5:15 am. For one night, it is not too difficult but as you can imagine, it’s a pretty frequent event and consequently the biggest challenge.

Any interesting stories to share during your involvement in advertising companies both in the East and West?

My law firm had a happy hour so I was happily eating cake in the break room. One of the partners said, “Hey Amy, we have a call coming up about Chinese trademarks. Would you like to sit in and listen?” So I joined the call and just finished having my cake, I wasn’t even a participant of that call. It was an enforcement issue for an infringement of a pretty big brand in the US and it was being handled by top law firms in the US. After the call, I said to the partner, “You know, for all the strategies that you guys are talking about, the client has no mark.” He didn’t understand what I was talking about because the client had a mark filed by this big law firm 7 years ago.

There were two major issues. The first was that the mark was filed but it was filed upside down. This led to the second issue which was that the client believed the mark represented ABC; however, the mark that was actually filed represented DEF. It was completely different.

So they’re like, ok, they filed the wrong mark. So what is the consequence in China? 7 years had passed and not only did the clients not have a mark in China but their mark had been taken by their Chinese distributor. As a result, the call, which was intended to be a discussion about enforcement and how we were going to go after the bad guys, turned into a conversation about how our client could protect themselves and what last minute measures they could use to prevent their factory from being affected. They had spent millions and millions of dollars setting up in China and they suddenly found that they had no rights to enforce. They had invested in A list actors to be the spokespeople for their brand, set up supply chains, employed people and after all that, they discovered that everything was now under threat in China.

You’ve probably seen it all – but what is the most difficult issue that keeps you awake at night?

I have been involved with many crises in China including being part of the team to check out factories making counterfeits and taking the leadership role to manage appeals to the Chinese Supreme courts. So what is the stuff that really scares me for a business?

What really concerns me is when a client’s supply chain gets affected. This usually happens when their key mark is taken by an infringer and that infringer becomes aggressive. So what then happens, is that the infringer reports the client to local law enforcement and their outbound shipment is then seized. This usually happens during the Western Christmas period and this leaves you with a short two day turnaround. And that is scary because if I cannot get this resolved then the shipments will be affected all over the world. In some cases, the client will have contractual obligations such as featuring the product on GMA or Oprah and they have no product to show. It has a huge ripple effect on their business.

What is the biggest shift in Chinese TM practice that is not yet commonly known in the Western world?

The thing that people complain the most about is when commercially successful brands outside of China, like Nike or Michael Jordan, are not automatically ‘legally recognised’ as well known brands in China. In the Western world if you have a commercially successful brand then this is recognised as a well-known trademark by the legal system. In China, there is a difference between a commercially successful mark and a legally recognised well-known mark. In China, there is a specific law dealing with that and the burden was almost impossible to prove up until 2015. It’s a little better now but not much. There are very stringent requirements to be recognised as such.

Counterfeiting is a global issue - what one piece of advice would you give to those facing counterfeiting issues in China?

What I have seen a lot of is that when businesses get upset, they immediately tell their law firm to send out a cease and desist letter. And, 80% of the cease and desist letters sent at the moment are written in English. So just imagine that you are an English speaking business owner or attorney in the US and you receive a cease and desist letter written in Chinese. You have a very busy life and busy schedule and there is no way that you are going to type it out and google translate it word by word. So my number 1 tip is NOT to send out a cease and desist letter written in English to a Chinese business or law firm. It is 98.99% guaranteed to end up in the trash can.

The second area is in dealing with counterfeiters through a platform like Alibaba. You need to realise that Alibaba is run through a points system and you need to file 6 days apart to take advantage of that system. So what happens many times is that someone will get upset and file 20 takedowns in rapid succession and then they are unsuccessful because they all count as 1 point and so the infringers will come back next month. If you file your enforcements 6 days apart, this will count as maximum points against the infringers and that is how you can eventually takedown their entire online store. So you need to help Alibaba to help you - comply with their system so it can be effective.

So where is home now?

Although I physically live in the US now, I consider home on both sides of the world – in Asia and in the US. I call my parents every day in Taipei and I also have an American Mom. She is why I was able to survive here in the corporate world coming straight out of Asia. And when they send Chinese New Year or Christmas cards to each other, they always say “We share a daughter”.

If you hadn’t become a trademark attorney, what do you think you would be doing today?

I think I would be a Calligraphy artist, business consultant or a business brand manager. Calligraphy is an art in China and in 5,000 years of history, each dynasty developed their own specific font or handwriting style. In China we believe that a person’s handwriting reflects their personality. As a child, I practiced calligraphy growing up and I had a dream that I would be a calligraphy artist. It is all about Zen, meditation and you as a person and I love that part of it. But I think if I wanted to make a living, I would probably have been a brand manager because I think that’s really cool.

Chinese trademarks webinar