CHARLES SCHWAB & CO., INC., founded in 1971 and headquartered in San Francisco, the United States, 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 services, wealth management and other related services to customers in Chinese Mainland, Hong Kong and other regions along with 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 Chinese name of the company completely contained the prior trademark and trade name “嘉信” (Jia Xin in pinyin) of CHARLES SCHWAB & CO., INC., and its main business involves the financial investment field, which is the same as the business of CHARLES SCHWAB & CO., INC., so that this name is quite likely to mislead the relevant public and cause market confusion.

Entrusted by CHARLES SCHWAB & CO., INC. in April 2021, Chang Tsi filed a complaint with the Hong Kong Companies Registry on the ground that the Chinese company 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 firm also claimed the prior trademark right. Having submitted the complaint, Chang Tsi made active communication with the Hong Kong Companies Registry, and further explained and demonstrated the composition of both company names, the business scope and nature, the use and popularity of the prior registered name, the business region and the degree of confusion.

In June 2021, after reviewing the complaint materials, the Hong Kong Companies Registry considered that the Chinese name of the respondent company was too similar to that of a third-party company 嘉信泰实业有限公司 (KASHINTAI INDUSTRIAL LIMITED) and thus supported the complaint, and then issued a notice to the respondent company to change its name. However, the respondent company failed to do so within the period specified in the notice. Upon further follow-up, the Hong Kong Companies Registry took the initiative to replace the name of the respondent company with its register number. Finally, the Chinese company 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 it is found that the name of a company is the same as or too similar to a company name registered earlier, the Registrar of Companies has the authority to direct the company to change its name within 12 months after the company was registered under the relevant name. Therefore, regular and close market monitoring is conducive to the timely detection of infringing companies, and is very critical for the follow-up actions to protect the rights of clients. Moreover, as reflected in this case, it is not rare that the Hong Kong Companies Registry takes the initiative to introduce other third-party companies and believes that the names of both companies are “too similar”, thus directing the respondent company to change its name. Therefore, when submitting a complaint about the name of a Hong Kong company, Chang Tsi suggests improving the prophase search. In addition to proving that the name of the company of the respondent is the same as or similar to that of the complainant or its affiliated companies, it is also possible to take other flexible measures like citing another prior registered company with the same or similar name to increase the success of the complaint.

Through regular and close market monitoring and a timely complaint about company name, Chang Tsi has effectively safeguarded the goodwill and legitimate rights and interests of the client CHARLES SCHWAB & CO., INC. in Hong Kong, China. At the same time, the firm also explores a more efficient solution to eliminate the “shadow companies” set up in Hong Kong.