A victory in a lawsuit against “Jia Xin”, a Hong Kong company name

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CHARLES SCHWAB & CO., INC., founded in 1971 and headquartered in San Francisco, USA, is a large multinational group with a history of nearly 40 years and holds a leading position in the global financial services industry . In Hong Kong, CHARLES SCHWAB & CO., INC. established its subsidiary 嘉信理财香港有限公司 (CHARLES SCHWAB, HONG KONG, LIMITED) on December 16, 1996 to provide financial, wealth management and other related services to clients in Mainland China, Hong Kong and other regions as well as the US headquarters.

During routine market monitoring in March 2021, Chang Tsi spotted a Hong Kong company named “嘉信泰投资有限公司” (JIA XIN TAI INVESTMENT LIMITED) established in December 2020. The company’s Chinese name contained entirely the earlier trademark and trade name “嘉信” (Jia Xin in pinyin) of CHARLES SCHWAB & CO., INC., and its main business involves the field of financial investment, which is the same as the business of CHARLES SCHWAB & CO., INC., so that this name is likely to mislead the relevant public and confuse the market.

Mandated by CHARLES SCHWAB & CO., INC. in April 2021, Chang Tsi filed a complaint with the Hong Kong Companies Registry on the grounds that the Chinese corporate name of “JIA XIN TAI INVESTMENT LIMITED” and that of the Hong Kong subsidiary “CHARLES SCHWAB, HONG KONG, LIMITED” were too similar. In this complaint, the company also claimed the prior right to the mark. After filing the complaint, Chang Tsi actively communicated with the Hong Kong Registrar of Companies and further explained and demonstrated the composition of the two company names, the scope and nature of the business, the use and popularity of the previous registered name, commercial region and degree of confusion.

In June 2021, after reviewing the complaint documents, the Hong Kong Companies Registry found that the Chinese name of the defendant company was too similar to that of a third-party company 嘉信泰实业有限公司 (KASHINTAI INDUSTRIAL LIMITED) and therefore supported the complaint, then advised the respondent company to change its name. However, the respondent company did not do so within the time specified in the notice. After further follow-up, the Hong Kong Registrar of Companies took the initiative to replace the respondent company name with its register number. Finally, the Chinese corporate name of the respondent company no longer contains “嘉信”.

According to the relevant provisions of the Companies Ordinance (Cap. 622) of Hong Kong, if a company name is found to be the same or too similar to a previously registered company name, the Registrar of Companies has the power to order the company to change its name within 12 months of the registration of the company under the corresponding name. Therefore, regular and close monitoring of the market is conducive to early detection of infringing companies and is very essential for follow-up actions to protect customer rights. Moreover, as evidenced by this case, it is not uncommon for the Hong Kong Registrar of Companies to take the initiative to introduce other third-party companies and find that the names of the two companies are “too similar”, ordering thus the respondent company to change its name. Therefore, when filing a complaint about a Hong Kong company name, Chang Tsi suggests improving the prophase search. In addition to proving that the defendant’s company name is the same or similar to that of the plaintiff or its affiliates, it is also possible to take other flexible measures such as citing another previously registered company with the same name or a similar name. to increase the success of the complaint.

Through regular and close market monitoring and timely company name complaint, Chang Tsi has effectively safeguarded the goodwill and legitimate rights and interests of customer CHARLES SCHWAB & CO., INC. in Hong Kong, China. At the same time, the firm is also exploring a more effective solution to eliminate “ghost companies” based in Hong Kong.

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