What's the problem? Chinese companies have registered their products with names of places in Taiwan, such as "Kukeng Coffee," "Hsinchu Rice Noodle," "Hsinchu Meat Balls," and "Chihshang Rice." And Chinese tea products that bore names of places in Taiwan, such as "Alishan," "Yushan," "Sun Moon Lake," and "Hsitou." So it's about geographical indications, a sign used on goods that have a specific geographical origin and possess qualities or a reputation that are due to that place of origin, more.
Citing a survey report, MAC Chairman Joseph Wu said that China's trademark department appears to have have approved applications of trademarks bearing the names of those well-known places in Taiwan. Of these applications, four were filed by companies invested in by Taiwanese people and three by Chinese companies, he said.
According to WTO and other agreements, the names of well-known places should never be part of any registered trademark, as it might create a false impression of the origin of the product which is more than likely to have been manufactured in another place.
See article here.
Article 1(2) of the Paris Convention includes some indications of source and appellations of origin as subject matter of industrial property protection:
The protection of industrial property has as its object patents, utility models, industrial designs, trademarks, service marks, trade names, indications of source or appellations of origin, and the repression of unfair competition.
Article 10(1) provides for indications of source the same remedies prescribed in respect of goods unlawfully bearing a trademark or a trade name in case of direct or indirect use of a false indication of source of the goods or the identity of the producer, manufacturer, or merchant:
The provisions of the preceding Article shall apply in cases of direct or indirect use of a false indication of the source of the goods or the identity of the producer, manufacturer, or merchant.
Article 1(1) of the Madrid Agreement for the Repression of False or Deceptive Indications of Source on Goods :
All goods bearing a false or deceptive indication by which one of the countries to which this Agreement applies, or a place situated therein, is directly or indirectly indicated as being the country or place of origin shall be seized on importation into any of the said countries.
Article 2 of the Lisbon Agreement:
(1) In this Agreement, "appellation of origin" means the geographical name of a country, region, or locality, which serves to designate a product originating therein, the quality and characteristics of which are due exclusively or essentially to the geographical environment, including natural and human factors.
(2) The country of origin is the country whose name, or the country in which is situated the region or locality whose name, constitutes the appellation of origin which has given the product its reputation.
Article 22 of Trade aspects of Intellectual Property Rights TRIPS on the protection of geographical indications within the framework of the WTO:
1. Geographical indications are, for the purposes of this Agreement, indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.
2. In respect of geographical indications, Members shall provide the legal means for interested parties to prevent:
(a) the use of any means in the designation or presentation of a good that indicates or suggests that the good in question originates in a geographical area other than the true place of origin in a manner which misleads the public as to the geographical origin of the good;
(b) any use which constitutes an act of unfair competition within the meaning of Article 10bis of the Paris Convention (1967).
3. A Member shall, ex officio if its legislation so permits or at the request of an interested party, refuse or invalidate the registration of a trademark which contains or consists of a geographical indication with respect to goods not originating in the territory indicated, if use of the indication in the trademark for such goods in that Member is of such a nature as to mislead the public as to the true place of origin.
4. The protection under paragraphs 1, 2 and 3 shall be applicable against a geographical indication which, although literally true as to the territory, region or locality in which the goods originate, falsely represents to the public that the goods originate in another territory.
Articles 23 and 24 of TRIPS can be relevant too.
More about international treaties protecting geographical indication here.
Article 16 of the Chinese Trademark Act:
Where a trademark contains a geographic indication of the goods in respect of which the trademark is used, the goods is not from the region indicated therein and it misleads the public, it shall be rejected for registration and prohibited from use; however, any trademark that has been registered in good faith shall remain valid. The geographic indications mentioned in the preceding paragraph refer to the signs that signify the place of origin of the goods in respect of which the signs are used, their specific quality, reputation or other features as mainly decided by the natural or cultural factors of the regions.