×

Trump wins preliminary approval for 38 new trademarks in China

China has granted 38 new Trump trademarks in a move that could raise eyebrows over conflicts of interest.

The approved applications were filed by Donald J. Trump or the Trump Organization for trademarks in a range of business areas, including spa services, golf clubs, financial firms, hotels and even bars, public government records show. Most of the trademarks bear the Trump name in either English or Chinese, though three are for Scion, a new brand under Trump Hotels.

China's approvals for these trademarks highlight potential ethical issues — for instance, if the trademark applications received special consideration given Trump's status as U.S. President, or if he were to expand his business empire in China using the marks. But experts say it's not unusual for companies and individuals to protectively register their brands in China, where counterfeits run rampant and guarding intellectual property can be an uphill battle.

If Trump doesn't "distance himself from his business operations — that is where the ethical issues come up," said Matthew Dresden, a partner at law firm Harris Bricken, who specializes in intellectual property in China. But "filing these applications seem to be the activities of a businessman trying to protect his interests … it's entirely within his rights."

China's trademark laws follow a "first to file" principle, which rewards squatters. So-called "trademark trolls" have in the past targeted well-known foreign brands from Facebook to Tesla and legally claimed them as their own. Firms entering China then are forced to either rebrand, or sue and potentially pay big money to buy back the trademark rights.

What makes things even more complicated is that trademark rights must be filed individually for different goods and services. Last March, for example, Apple lost after a Chinese court ruled that a small manufacturer could keep using the "iPhone" name on a variety of leather accessories, such as phone cases and wallets.

That's why companies may choose to register their brands in China protectively, whether or not they have immediate plans to expand in the world's second-largest economy, Dresden said. It's a way to protect a brand's future business opportunities in China, and prevents others from making goods or marketing services under certain names.

Applications for the Trump trademarks were first filed last April, when Trump was still on the campaign trail railing on China for unfair practices.

Now, they have been approved by the Chinese government, as of Feb. 27 and March 6, and are open to a three-month period during which others can file in opposition. But Dresden said challenges aren't likely to hold up given that the trademarks weren't registered by squatters.

Still, the fact that Trump's trademarks were approved are already drawing ire from U.S. politicians.

"This is an astonishing development," said U.S. Senator Ben Cardin, a Democrat, in a written statement. "It's clear to me that officials in Beijing have come to appreciate the potential return on investments for China in having a positive, personal business relationship with the President of the United States, who has not taken appropriate and transparent steps to completely sever his relationship from the corporation that bears his name."

The White House didn't immediately respond to a request for comment.

In early February, Trump told Chinese President Xi Jinping that he would honor the so-called "One China" policy.

Follow CNBC International on Twitter and Facebook.

Correction: An earlier version of this story misreported one of the dates China approved the Trump trademarks.