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AUSTRIA BELGIUM CHINA CZECH REPUBLIC GERMANY
HUNGARY POLAND ROMANIA SLOVAKIA TURKEY
Law Enforcement in China: Mission Impossible?
IP Protection
Counterfeits
Folie 2
Statistics
Counterfeited goods (value) detected by the EU customs authorities in 2012
sorted by the affected IP right:
Slide 3
Statistics
Counterfeited goods (value)
detected by the EU customs
authorities in 2012 sorted by
country of origin:
Counterfeited goods (articles)
detected by the EU customs
authorities in 2012 sorted by
country of origin:
Slide 4
Statistics
Counterfeited goods detected by the EU customs authorities in 2012 sorted
by top categories by value:
Slide 5
Statistics
Total value of all detected counterfeited goods by the EU customs
authorities in 2012: EUR 991.932.686,00
Percentage of detected amount of Chinese counterfeits sorted by class of
goods:
Slide 6
Statistics
Counterfeited goods detected by the German customs authorities in 2013
sorted by country of origin:
Slide 7
59,2%
18,8%
4,3%
Statistics
China's customs seized 76 million infringing articles in 2013
Over 74 million items involved violation of rights to the exclusive use of
trademarks, accounting for 98％ of the total.
75 million articles, representing 99.4%, were seized as they were being
exported.
Items detained were mostly consumer goods, including tobacco, cosmetics,
garments and shoes, etc.
Slide 8
Source: www.ipr.gov.cn
Legal Basis
In the past, technology and know-how were not regarded as assets
First in 80s and 90s development of Intellectual Property Law
Legal basis:
Trademark Law (1982), 3rd revision of the Trademark Law effective in
May 2014
Patent Law (1984)
Copyright Law (1990)
Law against Unfair Competition (1993)
Many judicial interpretations issued by the Supreme People’s Court
Slide 9
Legal Basis
China has joined major international agreements on IP protection:
Paris Convention for the Protection of Industrial Property
Madrid Trademark Convention
Patent Cooperation Treaty
Berne Convention for the Protection of Literary and Art
Nizza Agreement Concerning the Classification of Goods and Services
Protocol to the Madrid Trademark Convention
Slide 10
Patent Law
Chinese Patent Law since introduction in 1984 amended three times
Revision on October 1, 2009 came into force; due to implementation of
international standards legal protection has been strengthened
Chinese Patent Law covers:
Inventions term of protection 20 years
Utility model term of protection 10 years
Industrial design term of protection 10 years
First-to-file principle
Responsible for patent applications is the State Intellectual Property Office
(SIPO)
Slide 11
Patent Law
“Inventions” and “utility models” are inventions in the field of technology
- Invention patents substantive technical innovations (solutions for
product, process)
- Utility model patents smaller technical improvements (solutions relating
to shape/structure of a product)
Industrial design patents cover new designs relating to shape, pattern or
combination of colours
Slide 12
Patent Law
Patentability of inventions and utility models:
Absolute novelty
Patent or utility model do not belong to the state of the art inside and
outside of PRC
Introduction of product at exhibitions or publication in seminars leads to
loss of the criteria „absolute novelty“ registration in PRC only within 6
months
Practical applicability
Slide 13
Patent Law
Patentability of inventions and utility models:
Inventiveness
for invention patents: prominent substantive features and represents
notable progress
for utility model patents:prominent substantive features and represents
progress
Level of inventiveness required for utility model patents is lower
Slide 14
Patent Law
Patentability of industrial designs:
Absolute novelty
Design must be new over “prior design”
Design must be obviously different from prior design or the combination
of the prior design (“creativity”)
Slide 15
Patent Law
Priority:
Patents and utility model (+), if registration within 12 months after first
application
Industrial design (+), if registration within 6 months after first application
Duration of procedure: patent for inventions at least 2 - 3 years
patent for utility models and designs 1 year
Slide 16
Trademark Law
What is a trademark?
Sign that serves the purpose of identifying goods or services and
Allowing customers to distinguish these goods or services from those of
others
Composition of words, devices, letters numerals, combination of colours,
three dimensional signs etc.
NEW: Sounds can be registered as trademarks as long as they are easily
distinguishable and recognizable
Slide 17
Trademark Law
Trademark protection in China relevant for every company
Trademark protection in China only with the appropriate registration
Trademark Bureau is responsible for trademark applications
Prerequisites for registration in accordance with Art. 9 Trademark Law
Distinctiveness
No collision with rights of third parties
No legal prohibition of registration
Duration of procedure: currently 2 - 3 years
Term of protection: 10 years; renewable for another 10 years
Slide 18
Trademark Law
What is to be considered for trademark applications in China?
What should be protected?
Company’s name
Company’s logo
Product name
Design
Company’s name and logo
Latin letters
Chinese transliteration or translation: Avoid negative connotations!
Logo
Slide 19
Trademark Law
What is to be considered for trademark applications in China?
Registration in the name and on behalf of the parent company
China's catalogue of goods and services has subclasses
Attention: Trademark registration in the PRC does not include Hong Kong,
Taiwan and Macau!
Slide 20
Trademark Law
China's revised trademark law bringing 8 key revisions:
Likelihood of confusion analysis is mandatory
Penalties for infringement
Ceiling for trademark infringement increased to RMB 3 million
Streamlining the trademark process:
Designate multiple classes in one application; preliminary determination on
registrability within nine months; opposition and invalidation proceedings must
be complete within 12 and 9 months respectively.
Slide 21
Trademark Law
China's revised trademark law bringing 8 key revisions:
Well-known mark status
Owners of "well-known" trademarks may now prevent others from using the
mark on dissimilar goods if the use would likely cause confusion and potentially
prejudice the owners of the well-known mark.
Limited discovery on damages
If requested by the court, infringing parties must now provide documents to
assist in the determination of damages. In case of refusal the court can calculate
damages based on the trademark owner's evidence.
Slide 22
Trademark Law
China's revised trademark law bringing 8 key revisions:
Cracking down on bad faith
Registration and use of a trademark must now be in good faith
Fair use and prior use
Trademark applicant cannot prevent a prior user of a mark who has acquired
some influence through using the mark
Sounds registrable as trademarks
Slide 23
Trademark Law
The registration procedure
Slide 24
Application with TB Preliminary Review Publication
Time for Appeal
3 months Registration
Enforcement of IP Rights
What to do in case of violation of IP rights?
Law enforcement:
Administrative procedure
Civil procedure
Criminal procedure
All three procedures can be executed cumulatively
Administrative procedure is effective and inexpensive, but only redresses
the infringement
Compensation claims must be made in civil proceedings
Criminal procedure is only possible in severe cases of IP right infringements
Slide 25
Enforcement of IP Rights
Case study:
German innovative company in the field of measurement and sensor
technology with international operations and its own representative office in
China
Distribution of pressure gauges in China by use of Chinese distribution
agents
End of August 2010: anonymous hint on distribution of counterfeit products
by Chinese distribution agent
Beginning of September: undercover investigation, test purchases etc.
confirmed the suspicion; localization of Chinese manufacturer in Suzhou
Slide 26
Enforcement of IP Rights
Filing a petition with the competent local Administration for Industry and
Commerce in Suzhou
September 16, 2010: Search of premises of Chinese manufacturer under
the direction of AIC Suzhou:
Seizure of 5,000 pressure gauges with the trademark of client
Contracts and other documents with hints leading to Chinese
distribution agent as purchaser
On the same day a search of office premises of Chinese distribution agent
and seizure of documents and notebooks etc.
Slide 27
Enforcement of IP Rights
Notice of termination of business relationship with Chinese distribution
agent
Cease and desist warning issued to distribution agent
Client‘s inspection identified confiscated gauges as counterfeits
November 3, 2010: Punishment :
Producer: RMB 389.073,00
Distribution agent: RMB 86.325,00
December 20, 2013 Suzhou Municipal Intermediate People‘s Court granted
action for damages
Slide 28
Enforcement of IP Rights
Search of the production facility
Slide 29
Enforcement of IP Rights
Slide 30
Enforcement of IP Rights
Slide 31
Left : original Right: reconstruction
Slide 31
Enforcement of IP Rights
Whistleblower
Civil Lawsuit Sentencing by
SAIC
Search and
Seizure
Petition with
SAIC
Undercover
Investigation
Compensation
Slide 32
Enforcement of IP Rights
Slide 33
“Bridgestone wins trademark infringement lawsuit in China” January 24, 2014
“Adidas won the copyright case at first-instance” May 27, 2014
“Chinese tech firm sues Apple for trademark infringement” June 30, 2014
“NIPPON SHOKUBAI files lawsuit against Liaoning Kelong
Company” July 2, 2014
Thank you for your attention!
Schindhelm Rechtsanwaltsgesellschaft mbH Shanghai Office
German Centre for Industry and Trade Shanghai
Tower 1, Atrium Unit 321
88 Keyuan Road,
Zhangjiang Hi-Tech Park Pudong, Shanghai 201203, PR China
Tel. +86 21 289866-60
Fax +86 21 289863-70
Raymond Kok Mag. rer. publ.
Attorney-at-law (Germany) / Managing Partner
schindhelm.com
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