Cashing in on celebrity

Last month, American basketball great Michael Jordan accused Chinese sportswear giant Qiaodan of using his name, logo and playing number without approval, demanding compensation to the tune of tens of millions of yuan. For Jordan, whose personal wealth is estimated at nearly $500 million, suing the sportswear company was never about the money. What was at stake, the NBA legend claimed, was something far more important - his name and reputation.

"It is deeply disappointing to see a company build a business off my Chinese name without my permission, use the number 23 and even attempt to use the names of my children," Jordan said in a statement ahead of his announcement to sue Qiaodan, which has nearly 6,000 stores in China. "I am taking this action to preserve ownership of my name and my brand."

The company defended its right to what it claimed was a legitimate trademark. "Qiaodan is a brand we registered according to Chinese law, and its lawful use should be protected," the Chinese company said in a statement posted on its website in February.

Jordan isn't the only celebrity who has had his name used by Chinese businesses without permission. Before Jeremy Lin made his name in the NBA, the Risheng sports goods company in Wuxi, Jiangsu Province, registered a trademark with his name.

Trademark registration has boomed in China in recent years. The average annual figure has surged to 5 million since 2001, when China joined the World Trade Organization. Statistics from the State Administration for Industry and Commerce show that the number of registered trademarks in China reached 1.7 million in 2010-11.

At the heart of these huge figures are trademark agencies, where companies and individuals register names they wish to trademark. Some 1,500 of China's 6,000 trademark agencies are located in Beijing, many near Yuetan Park in Xicheng district where the headquarters of the State Administration for Industry and Commerce is also situated.

Star power has staying power

Li Deshun, an expert on trademark registration from the Chinese Academy of Social Sciences, said that the industry helps firms differentiate their products while cracking down on unlawful profiteering involving infringement.

In China, it's not just NBA stars who are targeted for trademarks. Hong Kong celebrities are perhaps the most hotly pursued. Actress Maggie Cheung saw her identity registered by a bathroom accessory company. Singer Jackie Cheung (no relation) had his trademark snapped up by an electronics company that specializes in microphones and handsets. Musician and actor, Nicholas Tse, had his name poached by the Guizhou Bailing pharmaceutical firm to promote laxative medication, while in 2007 a man surnamed Dan in Tonghua, Jilin Province, used the name of actress and singer Karen Mok as a trademark for his stinky tofu.

Closer to home in Beijing, businessman Yang Kun made headlines in 2005 when he registered the name of crosstalk legend Zhao Benshan to promote the sale of shirts.

Sinister motives in registration

Zhang Jie, a manager at a Beijing trademark company he asked not to be named, said that as soon as a celebrity emerges in the public eye, an intense tussle breaks out between people seeking trademark registration of their name. "The whole process of registration usually takes around a year if you apply personally, but at our company we try and cut it down to a few months," Zhang said.

While the mantra of "celebrity sells" might be good for business, Li insists it's not healthy for the trademark industry. Even if it's legal by law, it's morally wrong to capitalize on someone else's name without their permission, he said.

"Using portraits of famous people to advertise products was common until recently the copyright regulations were tightened," he said. "Now, using other people's names for the purpose of profiteering also needs to be stopped."

In another, more sinister commercial ploy, some names of celebrities are registered as trademarks by people who then try to blackmail or sell the rights back to them for a small fortune. "These people blackmail celebrities by threatening to use their name to promote embarrassing products," Li explained.

Restoring the reputation

A man surnamed Gu from Quancheng Trademark Company, established in 2009, said that in the 90s there were dozens of trademark agencies lining streets near Yuetan Park.

However, now those businesses have closed and more people are entering the industry online.

"[Going online] is an easier method of registering trademarks, both for applicants and agencies," he said. "Nowadays, anyone can enter this industry because the barriers to entry are low and you don't require any real specific qualification."

Registering a trademark is relatively easy. You first need to check whether the trademark you want to use has been registered or not beforehand. Next, you need to prepare documents that include identification. After receiving approval for your trademark from the State Trademark Bureau and paying a registration fee, it belongs to you.

Gu describes the process of registering a trademark as being "less trouble than lodging a visa application to travel overseas."

As someone with more than 20 years' experience in the industry, Li harbors cautious optimism for the future. "Some people compare the practice of buying trademarks then selling them to others to buying stocks. There might be a short-term profit yield, but it's not a long-term investment," Li said.

"Helping to restore the industry's reputation is not just the obligation of trademark agencies. More importantly, authorities must raise their standards for approval of trademark applications."