Trump's China trademarks risk constitutional crisis

US President-elect Donald Trump has at least 45 trademark applications pending in China, AFP has learned, each of which could potentially violate the American constitution -- underlining possible conflicts of interest in his relations with the Asian giant.  

Since his election, Trump has angered Beijing by reaching out to Taiwan, appointing China sceptics and threatening punitive tariffs on the country's exports.

But that has not stopped him from quietly working to secure the rights to his name in the world’s second largest economy, filing trademark applications as recently as June.

The businessman turned politician already holds at least 72 marks in China, part of an extensive, international portfolio that forms a central pillar of his enormous wealth.

He filed for an additional 42 in April, almost a year after declaring his presidential run, Chinese government data shows, and three more around two months later, having effectively clinched the Republican nomination. 

All were filed in his own name and registered at his Trump Tower address in New York.

The approval process typically takes 12 to 18 months, so Chinese authorities will only make their decision long after he takes office later this month.

Experts from across the US political spectrum said the applications could put Trump on a collision course with the US constitution: article 1, section 9, clause 8 forbids federal officials from receiving a gift or "emolument" -- a salary, fee or profit -- from a foreign government.

"Grants of trademarks, permits, etc could be deemed to be privileges bestowed by a foreign government that are covered by the clause," said Robert Painter, a former White House ethicist for Republican president George W. Bush.

Barack Obama's former ethics lawyer, Norman Eisen, agreed: "Each of these trademarks is a potential emolument."

The "concern of the constitution is that flows of benefits to presidents from foreign sovereigns will distort their judgement, and trademarks are certainly capable of doing that".

The constitution has no “specified remedy” for a breach, added Jay Wexler, a constitutional law scholar at Boston University.

However, he said “in my view, impeachment would be the proper remedy for a serious violation".

The president-elect's transition team did not reply to requests for comment by AFP. A lawyer for the Trump Organization, Alan Garten, asked for a list of questions then did not respond to multiple emails.

- Trademark Ivana –

During his White House bid, Trump frequently excoriated China, accusing it of “raping” the US with unfair trade and fiscal policies.

But that has not stopped the president-elect -- known for his hardball negotiating tactics -- quietly pursuing business deals in the country, including with its government.

Trump has claimed his intellectual property (IP) is worth $3.3 billion, accounting for roughly a third of the $10 billion-plus fortune he reported in a July 2015 statement.

Trademark protection is crucial to licensing the Trump name on products from hotels to neckties, and his existing rights give him exclusive control over it in English and Chinese in China for a variety of business “classes” ranging from “hotels and restaurants” to “medical, beauty and agriculture”.

He also holds at least five Chinese trademarks on the name of his ex-wife Ivana -- the first of them registered in 2005, more than a decade after their divorce.

The new applications claim the right to the words "Trump" and "Donald Trump" in a variety of businesses, as well as several variations of his name in Chinese.

Intellectual property lawyers told AFP the new applications may be intended to protect against IP "squatters" in a country where trademarks are typically granted to the first applicant.

IP enforcement in China is generally considered weak, and the system has left companies from New Balance to Apple unable to fend off speculators.

But the CEO of Trump's hotel business, Eric Danziger, has said it is seeking between 20-30 hotel deals there, and AFP previously reported its negotiations with the country’s largest state-owned enterprise, State Grid.

Government trademark databases elsewhere in Asia show Trump personally owns trademarks in Hong Kong and Taiwan, as well as India and Indonesia, where he has major licensing deals.

Intellectual property experts said the arrangement was unusual, as holding trademarks in companies had tax advantages.

A Trump holding company, DTTM Operations, made four further applications in April this year.

- 'Trump is the business' -

The president-elect has said he will remove himself from his company's operations, handing the family business to his sons.

But "Trump is the business essentially, so I don't know how you can divorce yourself from that,” said Chinese legal expert Edward Lehman.

Just after Trump's November electoral triumph, Chinese officials decided a decade-long trademark wrangle in his favour, raising media questions over whether he had received special treatment.

The debate will probably persist until Trump completely separates himself from his business interests, including the trademarks, said Boston University's Wexler. 

"How do we know that the president won't be influenced in his dealings with China by China's actions on those applications?" he asked.

Or that China was "not influenced in some way by the fact that they have been submitted by the president of the United States?"

source: AFP