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Trump's trademark continues its march across the globe, raising eyebrows


  For most of last year, Donald Trump’s application to register trademarks for his brand of home accessories languished in a government office in Lima, Peru. But since Trump was elected in November, the pace has picked up. 

 

A 6-month-old request to register his brand of sheets, duvets, towels and other goods, now selling briskly at a home goods store in Lima, overcame a crucial hurdle in late December. So did a second application, filed after the election, to protect Trump’s brand of flatware. 

 

Peruvian officials say that Trump’s trademark applications are being treated no different from anyone else’s and are being acted on now simply because his business representatives have answered outstanding questions. They insist that Peru’s president, who met Trump in the Oval Office in late February, has no influence over their decisions. 

 

But to a team of constitutional lawyers and ethics lawyers, the pending Peruvian petitions are emblematic of the legal and moral perils in Trump’s continued ownership of his business empire. In a federal lawsuit that has set up a high-stakes legal battle with the Trump administration, they argue that the Constitution prohibits the president from accepting any economic benefit, including trademark approvals, from foreign governments. 

 

A review of 10 trademark databases shows that Trump’s enterprise, now run by his two adult sons, has 157 trademark applications pending in 36 countries. Registered trademarks are valuable financial assets, especially for a business like Trump’s, which is increasingly focused on marketing his name, not building hotels. 

 

When the Chinese granted Trump preliminary approval of 38 trademarks of his name, not long after he was sworn into office, “it was a gift,” said Peter J. Riebling, a trademark lawyer in Washington. “Getting the exclusive right to use that brand in China against everyone else in the world? It’s like waving a magic wand.” 

 

How much of a gift is hard to estimate. A top Trump Organization official recently estimated that the firm generated $400 million a year in revenue, a third of it overseas, from the sale of Trump-branded products and services. While some of that revenue presumably goes to companies that have slapped the Trump name on their own hotels or tea bags, Trump’s financial disclosure forms indicate that those firms pay him millions every year — perhaps tens of millions — for that right. 

 

The legal question is whether new foreign trademark registrations and other transactions between Trump’s businesses and foreign governments violate the emoluments clause of the Constitution. The clause prohibits federal officials from accepting “any present, emolument, office or title of any kind whatever from any king, prince or foreign state.” 

 

No one knows the answer because in 230 years, no court has interpreted the clause. Nor has any president in modern history put it to the test as Trump has. Every other president since Jimmy Carter has gone to great lengths to avoid such entanglements, typically by putting their personal assets in independently managed blind trusts. 

 

The debate now also engulfs Trump’s daughter Ivanka, who late last month became an unpaid assistant to the president. She, too, is covered by the emoluments clause, according to previous legal opinions issued by the Justice Department. Her company has 37 trademark applications pending in 10 countries, covering the sale of leather goods in China, jewelry in the Philippines and beauty products in Indonesia, The New York Times review shows. 

 

The president’s critics argue that the emoluments clause prohibits Trump from accepting any economic benefit from a foreign power, just as it prevented Abraham Lincoln from accepting a gift of elephant tusks from the king of Siam in 1862. Otherwise, they argue, foreign governments could seek the president’s favor through actions like trademark registrations or pressure him by withholding approvals. 

 

“If you could bring the founders back, to a person they would say, no, you can’t accept that,” said Norman L. Eisen, a co-founder of Citizens for Responsibility and Ethics in Washington, a liberal nonprofit group that filed a lawsuit in U.S. District Court against the president over emoluments. “How can we be confident that he is making decisions in the interest of the United States when he has these enormous potential inducements?” 

 

But in a brief expected to be filed this month, Justice Department lawyers will counter that the framers of the Constitution meant only to rule out gifts and compensation for services, not ordinary, arm’s-length commercial transactions with foreign governments. Otherwise, they argue, the framers would have had to confront the potential effect of the ban on the nation’s earliest presidents, including George Washington, who supplemented his meager presidential salary partly by exporting flour and cornmeal to England and elsewhere. 

 

Even were there evidence that Trump was violating the emoluments clause, his defenders will argue, the court has no authority under the separation of powers doctrine to intervene; that power lies with Congress. They also hope that Judge Ronnie Abrams, an appointee of President Barack Obama, will dismiss the case purely on the grounds that the plaintiffs have no standing to sue. 

 

Attorney General Jeff Sessions and his top aides have personally briefed Trump on the lawsuit, which the president has publicly dismissed as being without merit. 

 

Since becoming president, Trump has shifted control of his companies to a trust managed by his eldest sons and a company officer. But one of the sons, Eric Trump, an adviser to the trust, has said he will keep his father abreast of the state of his business empire. Donald Trump will also be able to tap into company profits at will. 

 

Seeking to blunt the emoluments controversy, Trump has pledged to donate profits from foreign government guests at Trump hotels or similar businesses to the federal Treasury. His sons say they have also backed away from billions of dollars’ worth of new foreign deals. 

 

But they are still developing and expanding projects that were already underway, including a new 18-hole golf course at a Scottish resort. And as it has for 20 years, Alan Garten, chief legal officer for the Trump Organization, said in an email, the company is still “zealously enforcing and protecting its intellectual property rights around the world” especially in countries where “infringement is rampant.” 

 

Ivanka Trump has applications pending in nine of the same countries where her father’s petitions await a decision, plus China, the databases and other records show. She has rolled her fashion brand into a trust that is overseen by her brother-in-law, Josh Kushner, and sister-in-law, Nicole Meyer. Her lawyer, Jamie S. Gorelick, a prominent Democrat who served in President Bill Clinton’s administration, is to review all new deals and flag any potential conflicts of interest to Ivanka Trump. 

 

No worldwide trademark registry exists, and countries update their data differently, so the number of open applications is an estimate. Donald Trump’s pending petitions cover the gamut of goods and services, from chandeliers in Saudi Arabia to spa services in Canada. 

 

One would safeguard the Trump name in the Philippines, where Jose E.B. Antonio, a real estate magnate who was named last fall to be a special envoy to the United States, has licensed the use of the Trump name on a $150 million apartment tower. 

 

Another is pending in Indonesia, where his firm is involved in building two luxury island resorts. After Trump was elected, his billionaire partner, Hary Tanoesoedibjo, who attended the inauguration, publicly boasted that he had access to the president, but later said he had meant Trump’s children. 

 

A federal appeals court has ruled that trademark registrations in the United States bestow significant, financially valuable benefits. Unlike the United States, some foreign countries allow applicants to register trademarks defensively to stake out future ground. Even then, specialists say, approval is an economic asset. 

 

“It means the ability to use it, either offensively or defensively, to get profits in the future,” said Rebeccah Gan, a trademark lawyer in Washington with a number of foreign clients. 

 

In a 2015 deposition discovered by the nonprofit Project on Government Oversight, Garten, the Trump Organization lawyer, said Trump personally owned his trademarks. He estimated that overseas sales made up as much as $140 million of $400 million in annual revenue generated by the sale of Trump-branded products and services. Last May, Trump reported to the Office of Government Ethics that in the previous 17 months he earned between $14 million and $65 million in royalties and licensing fees, up to two-thirds of it from overseas. 

 

His companies have recently been making a concerted push in Central and South America, filing dozens of trademark applications. One filed a petition covering a variety of home accessories in Peru in June, but Peru’s trademark office issued an order to publish the request, a crucial step, only in late December. A second request covering Trump cutlery, filed Dec. 16, cleared that hurdle in mere days. A Peruvian trademark official said the first application took longer because it was broader and the firm failed to promptly respond to questions. 

 

Both now await decisions, but Trump sheets, pillows and dishware are already for sale at Casa Viva, a home goods store in Lima. On Saturday, Christopher Ramos, a 37-year-old businessman, spent about $100 on ivory-colored Trump bath towels. He said the brand conveyed luxury, “like I’m staying in a five-star hotel.” 

 

Gonzalo Mejia Peterson, the store manager, said some customers reacted warily to the Trump name, but the sales staff has been trained to explain the difference between politics and business. “There’s no reason to mix them up,” he said.


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