Donald Trump

China denies currying favour with Donald Trump through trademark deals

Critics of the US president have also voiced concerns that his business ties with China might create conflicts of interest

PUBLISHED : Friday, 10 March, 2017, 10:01am
UPDATED : Friday, 10 March, 2017, 10:01am

China has defended its handling of 38 trademarks it has provisionally approved for President Donald Trump, saying it followed the law in processing the applications at a pace that some experts view as unusually quick.

Democrats in the US Congress were critical of Trump after reports on Wednesday that the potentially valuable trademarks had been granted, raising questions of conflict of interest and political favouritism. One senator said the issue merits investigation.

Trump has sometimes struggled to win trademarks from China.

He secured one recently after a 10-year fight that turned his way only after he declared his candidacy for the presidency.

China ‘trying to curry favour with Trump’ by approving his trademarks, Democrats say

China’s foreign ministry spokesman Geng Shuang said in a regular briefing with reporters on Thursday that the Chinese authorities handle all trademark applications in accordance with the law and regulations. He declined to comment on speculation about political influence on Trump’s trademark approvals.

Critics fear foreign governments might gain leverage from Trump’s global portfolio of brands.

Democrats in Congress have been pushing Trump to sever financial ties with his global businesses to avoid potential violations of the emoluments clause of the US Constitution, which bars federal officials from accepting anything of value from foreign governments unless approved by Congress.

The monopoly right to a successful brand in a market like China can be worth huge sums. Former top ethics lawyers from the administrations of Barack Obama and George W. Bush say any special treatment from Beijing in awarding Trump intellectual property protection would violate the Constitution.

Concerns about political influence are particularly sharp in China where the courts and bureaucracy are designed to reflect the will of the ruling Communist Party and foreign companies and the lawyers that work for them regularly ask embassy staff for help lobbying Chinese officials.

Spring Chang, a founding partner at Chang Tsi & Partners, a Beijing law firm that has represented the Trump Organisation, declined to comment specifically on Trump’s trademarks. But she did say government relations were an important part of trademark strategy in China.

She said she has worked with officials from both the US and Canadian embassies to help her clients. The key, she said, was “you should communicate closely with the government to push your case”.

Drawing on public records from the Trademark Office of the State Administration for Industry and Commerce, the Associated Press compiled a detailed list of 49 trademarks Trump’s lawyers applied for in 2016, even as he railed against China on the campaign trail. On February 22, seven of those marks were rejected , although public records do not indicate why. China granted preliminary approval for 38 marks on February 27 and March 6. Four applications are pending.

Trump’s China trademarks ‘risk a constitutional crisis’

Matthew Dresden, a China intellectual property attorney at Harris Bricken in Seattle, said the rejections suggested that the trademark office hadn’t done Trump any special favours. “Some did not go through, that suggests it’s just business as usual,” he said.

Dan Plane, a director at Simone IP Services, a Hong Kong intellectual property consultancy, said it would be difficult to draw firm conclusions without in-depth research. However, he said the efficiency of China’s trademark office in handling Trump’s caseload suggested favour for a man whose decisions could have a powerful impact on China.

“For this many marks to all sail through to preliminary approval this quickly, with nary an issue in sight, that is unheard of to me and I have been doing this for 16 years,” he said. “I wish my clients’ applications would be dealt with half as expeditiously and graciously.”

If no one objects, the new marks will be officially registered after 90 days, bringing the number of Trump’s trademarks in China to 115. Nearly all are in the president’s own name; a few are registered to a Delaware company called DTTM Operations.

The new marks could lay the groundwork for an expanded range of branded businesses, including financial, insurance and real estate services, golf clubs, educational institutions, restaurants and bars. A number of the trademarks granted, including those for “social escort” and “bodyguard” services, appeared to relate specifically to hotels. Other international hotel companies whose documents were reviewed sought similar trademarks.

It is unclear whether any of these Trump-brand businesses will materialise in China. Many companies here register trademarks just to prevent others from using their name inappropriately. Trump has also said he would refrain from new foreign deals while in office.

Trump began to file trademark applications in China in late 2005, an effort that accelerated in 2008 as Trump’s lawyers fought for control of Chinese variations of his name, public records show. Years of ambition in China, however, have yet to yield a single marquee development. And despite all the recent activity, Trump still doesn’t have a firm hold on his brand in China. More than 225 Trump-related marks are held or sought by others in China, for an array of things including Trump toilets, condoms, pacemakers and even a Trump International Hotel.

Are China’s ‘Trump toilets’ a busted flush amid trademark battle?

Trump Organisation chief legal officer Alan Garten said the latest registrations were a continuation of efforts that long predate Trump’s presidential run. “Any suggestion to the contrary demonstrates a complete disregard of the facts as well as a lack of understanding of international trademark law,” he said in an email.

But a growing number of Democrats disagree.

After the Associated Press reported on Wednesday about the sweep of new approvals, Senators Debbie Stabenow and Ben Cardin called a press conference to lambaste President Trump for his growing Chinese entanglements. Senator Richard Blumenthal said on the Senate floor that Trump’s intellectual property in China merits investigation.

“This President’s conflicts of interest are creeping into every corner of the world,” he said in an email. “The consequence is that he has done nothing to counter Chinese currency manipulation, trade rules violations, military buildup and other aggressive Chinese actions. Standing up for a great America means putting our nation before personal profit.”

Democrats have written to Trump and Secretary of State Rex Tillerson urging scrutiny of Trump’s intellectual property interests in China.

“It’s time for Republicans in Congress to join our efforts to hold President Trump accountable,” Senator Dianne Feinstein said in a statement on Wednesday. “The Constitution demands it and the American people deserve it.”