Fashion house Hermès, a luxury brand based in France, has lost its trademark dispute in China to cancel a trademark similar to the Chinese version of it's name. Hermes registered its English name in China in 1977. However, it never registered its Chinese name as a trademark.

In 1995, Dafeng a menswear company applied to the trademark board to the trademark a similar name for clothing products. The application granted and in 1997, Hermes appealed to the trademark board saying that the registered name, “爱玛仕” (Ai Ma Shi), was similar to the Chinese translation of Hermès, which is “爱马” (Ai Ma). The two names contain very similar Chinese characters with the same pronunciation.

However, the trademark board rejected Hermes' appeal and approved the Chinese company's registration in 2001. In 2009, Hermes once again appealed to the board, saying its Chinese name enjoyed a high reputation around the world and asking the board to cancel the disputed trademark. However, Hermes' application was rejected for a second time in May last year.
Hermes claimed that its Chinese name should be protected as an unregistered well-known trademark in China. It said the disputed trademark was an imitation of its Chinese name and was obtained through "deceptive means.

The court said that most of the evidence presented by Hermes happened after the disputed trademark had been registered. Also, the evidence was mainly media reports about the Chinese name of Hermes in Hong Kong, which fails to prove Hermes was well-known among consumers on the Chinese mainland.
 
For brand extension, you need a clear strategy. The case highlights the disadvantages of not being the first to file for an application of a trademark in overseas territories. Hermes had not secured trademark protection in the region With Chinese consumers being the largest market for purchasers of luxury goods,  as well as being one of the largest market for counterfeit goods, this decision could be particularly damaging for the French luxury brand.