Not that long ago, a client came to us having reached a tentative agreement to sell millions of dollars of product to a Chinese city government. The deal looked good from all angles and my firm was hired to draft the contract. I discussed with my client the need to register their product's trademark in China before anyone else beat them to it. My client was concerned about this because a number of people knew it would soon be doing a substantial business in China. So it went ahead and registered its trademark in China right away as it continued to negotiate the final terms of its contract with the Chinese city.

To make a long story short, my client was unable to turn its oral agreement with the Chinese city into a written one due to various disputes regarding payment terms and IP protections. Rather than compromise, my client made the decision not to go into China, at least for now. But its China trademark has been bought and paid for and approved for filing and so, in a couple years (yes, it does take that long), it will have a registered Chinese trademark that will only have value for it if it is either selling its product into China or having it manufactured there. In other words, in hindsight, its filing its trademark there came too soon.

I thought of this prior matter this week because I am involved in another situation where I am worried that my client's trademark filing might end up being for naught. This client has a very strong brand name and it is in negotiations with a Chinese manufacturer regarding having one of its products made in China. Interestingly, if my client does not reach agreement with this particular Chinese manufacturer, it will have its product made in another country. So does it register its trademark now, so as to be sure to beat everyone else to it, or does it wait and see whether it can reach agreement with its Chinese manufacturer? Hate to give away the punchline, but this client too chose to go ahead and register its trademark. But what if it had only a very limit amount to spend?

Though the odds of someone "sneaking in" and filing "your" trademark while you are negotiating a contract are low, the cost of missing out on being able to register your trademark are so high, that as a lawyer, I think I have to advise clients to register their trademark every time. But might there be circumstances where a company should take a wait and see approach to registering its trademark?