Editor’s Note: Danny Cevallos (@CevallosLaw) is a CNN legal analyst and a personal injury and criminal defense attorney practicing in Pennsylvania and the US Virgin Islands. The opinions expressed in this commentary are his.
Last week, China granted Donald Trump's company a trademark protection it had been seeking for years
Danny Cevallos says that China may expect some sort of favor in return
This week the Chinese government finally gave Donald Trump’s company trademark protection for use of his name in the construction industry.
Trump sought protection and control of his trademark in the Chinese courts for years, including at the time of his campaign. Last September, China’s trademark review board announced it would invalidate a rival claim for Trump’s mark, and in November, after he was elected, the board gave the trademark to the President’s business. This week it was officially registered.
Does this mean there was some quid pro quo between China and the Trump team? Even if the US government hasn’t yet offered any “quo” for China’s “quid,” this might be an issue. But this issue should not be viewed in a vacuum. China has some baggage in the area of international and intellectual property.
First, the world of “intellectual property” itself is highly specialized and highly confusing to most Americans. Intellectual property law is designed to reward and protect innovation.
A capitalistic society despises monopolies, because they stifle – among other things – innovation. Yet to incentivize inventions and creativity, we award clever innovations with a limited monopoly.
While patents, copyrights and trademarks all fall under this umbrella, the three are vastly different from each other. A trademark is, in its simplest terms, a brand name. It can be a word, name, symbol, device – or any combination thereof – used to identify and distinguish the source and seller of goods or services.
For example, the word Nike itself has independent value, because we have come to associate it with a particular kind of product and quality. But we are also probably familiar with the symbol – the ubiquitous simple black curved line. And while the physical symbol itself printed on a piece of paper is virtually worthless, the meaning behind that symbol is priceless.
One can quickly imagine how unfair it would be to a company that has invested so much in a brand to have others affix it to their own product and benefit from that goodwill.
Intellectual property law isn’t a popular topic of conversation, but it quietly remains one of the essential features of the American economy. Without a robust “IP” law system, companies have no incentive to invest in innovation or a brand, because it will be copied and stolen as soon as the company achieves any success.
By contrast, China’s IP law – well, historically, it’s been a bit of a free-for-all, especially for trademark counterfeiters.
As trademark law attorney Darius Gambino puts it: “The registration of well-known US brands by others in China has been a problem for many years. Oftentimes, the US brand owner does not even know their famous trademark has been registered by someone else. By the time they find out, it is too late.”
Even the strongest trademark protection in the United States offers little solace if someone can simply register the same brand name in China and start pumping out fake Gucci bags from one of their factories. When the market is flooded with fakes, the value plummets everywhere, even in the US.
Gambino, who has considerable experience in international trademark law, adds: “The heart of the problem is China’s first-to-file trademark system, which historically didn’t prevent this type of ‘squatting’ activity.”
It may be that Trump should have been entitled under Chinese law to use his name in connection with construction services, and the Chinese trademark office had, up until now, bungled the application for the mark. It may also be that China has a lot of remedial work to do on its trademark system to be fair to all brand names – not just Trump’s.
According to Gambino, China is “trying to bring their trademark system into compliance with the rest of the world, which is good for all brand owners.”
So, in a way, Trump may have been seeking the same fair treatment that other brands would seek in China: the right not to have his brand name unfairly devalued. But other brands are not owned by individuals who have ascended to the presidency.
Trump was (sort of) right back when he said that, as President, he cannot have a “conflict of interest.” However, if Trump did receive a quid pro quo from the Chinese government, then that could be a potential violation of the Emoluments Clause. This provision of the Constitution restricts members of the government from receiving gifts, or “emoluments,” from foreign states unless Congress consents.
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This all raises an interesting new question: if the Chinese government granted Trump something he was entitled to receive (the trademark), but might not have received because of a flawed Chinese TM system, and the Chinese government did what it was supposed to do, but with the expectation of something in return from Trump, his critics might consider that a violation of the emoluments clause, or a form of federal “quid pro quo” bribery.
The DOJ defines “quid pro quo” expansively when deciding to indict other government officials. It wouldn’t be a stretch for Trump’s detractors to consider this a form of prosecutable bribery. And when it comes to the hazy universe of impeachable offenses, there are few sure things. One of them is that bribery, well, it’s one of them.