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IPR in China

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Severin de Wit

on 5 March 2015

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Transcript of IPR in China

I. Overview of China Trademark Law
II. Trademark Enforcement in China
III. Investigating Anti-counterfeiting
IV. Tips for Protecting Trademark
Rights in China

EXAMPLE Border action case detention of counterfeiting UGG shoes by China Customs officials

Deposit of a registered trademark with the General Administration of Customs;
Detention of infringing goods by local Customs;
Notification of the trademark rights owner;
Deposit paid by the rights owner;
Investigation by local Customs;
Issuance of final decision regarding infringement
Disposal of the infringing goods;
In 2010, detention of imported goods :192,516/0.14%;
exported goods:133,407,053/99.86% .

Border Measures-Enforcement ex officio

Official Website of CTMO in English

In 1980, only 20,000 TM
In 2010: TM applications reached 1,000,000 including 23,346 applications from the U.S.
2013: 9,000,000 trademark applications

Acquiring Trademark Rights in China

Trademark Office of China (CTMO)
• SIPO( State Intellectual Property Office) v. CTMO
Trademark Review and Adjudication Board (TRAB)
Courts at or above intermediate level
Administrations for Industry and Commerce (AIC)
General Administrations of Customs and local Customs

Trademark Authorities in China

Investigation by the trademark rights owner
to identify the counterfeiter, location and warehouse;
Submitting the POA, written complaint and evidences to AIC;
AIC Raid action seizing all counterfeits on site;
Issuance of penalty decision by AIC;
Administrative litigation to the Court.

Administrations for Industry and Commerce (AIC) action
Trademark Enforcement in China Statistics in 2010

Border measure
AIC (Administration of
Industry and Commerce) action
Civil litigation
Criminal Prosecution

Trademark Enforcement in China

Requirements :
•Substantial examination;
•Opposition and cancellation

Protection upon registration
Voluntary and compulsory registrations
Substantive examination
Unified registration
Separate administration
Judicial Examination

Overview Trademark Law of China

Searching Results for Trademark “Microsoft”

Trademark Enforcement
in China

Some statistics
Customs seized 21,073 IP Infringing cases, inc. 20,531 (or 87%) trademark infringement & counterfeit cases

Local AIC conducted 59,500 raid actions against TM infringements, incl. 9,691 (or 16%) foreign-related cases
Civil court trialed 42,931 IP civil litigation cases
including 8,460/20% trademark cases;

Criminal court handled 3,942 IP criminal cases
including 585/15% counterfeiting of registered trademark.
AIC in Action
Destroying the Counterfeits

Pros & Cons of AIC action
Less complex than Court Enforcement
Quick Actions
Less costly than litigation
Civil Compensation not available
Local protectionism
Legal framework:
Choice of forum
Civil litigation procedures
Preliminary Judicial measures
Civil Remedies

Civil Litigation

Using same or similar mark
Selling the infringing products
Counterfeiting (manufacturing, selling)
"Reverse counterfeiting"
Using identical or similar trademark as products name;
Facilitating infringement including
providing transport, storage, mailing, hiding or other conveniences
Other infringing respects to the registered trademark holder’s right.

Legal Framework - Article 52 of China Trademark Law

Court Structure of China

Generally, intermediate courts handle first instance of trademark infringement cases,
authorized district level court can handle first hearing of trademark infringement case .
Territorial Jurisdictions:
•Places where the infringing acts occur
•Places where infringement products are stored
•Places where local Customs and AIC seal up and detain
infringement products or
•Places of domicile of the defendants.

Choice of forum

Preliminary injunction
Pre-trial evidence preservation
Pre-trial property preservation

Preliminary Judicial Measures

Criteria for Compensation

Profit which the infringer earned by infringing
Injury that plaintiff suffered from infringement during period of infringement, incl. expenses of plaintiff stopping the infringement, or
Statutory damages of no more than RMB 500,000 (euro 56,000) depending on circumstances of the case
Limitations on Civil litigation

Litigation shall be filed within 2 years from which the right owner knew or should have known aboute the infringement

6 month for first instance trial, 3 months for second instance trial,
second instance is final
No discovery, no precedents in the trial
Swarovski AG vs. Swarov Wedding Photo
Beijing No. 2 Intermediate Court (2008)

The Swarovski case
Plaintiff, owner of TM Swarovski, has 112 stores in China RMB 10 million annual advertising costs
Swarov Wedding used Swarov as trade & domain name in advertisements
Court: Swarovski famous trademark in China, order to stop using Swarov and ordered defendant to pay compensation of RMB 210,000 (28,000 euro)
Starbucks v. Shanghai Xingbake Café
Shanghai 2nd Intermediate Court (2005)

STARBUCKS is well-known trademark in China
Shanghai Xingbake registered Chinese character as the company's name was in a bad faith.
Court: Shanghai Xingbake 's conduct, using trademark similar to the registered Starbucks trademark thus infringed Starbucks Corporation's TM rights and also constitute an unfair competition to the Starbucks Corporation
Shanghai Xingbake ordered to stop trademark infringement and unfair competition, change its name and compensate Starbucks Corporation RMB 500, 000 (65,000 euro) damages.

Starbucks vs. Shanghai Xingbake Cafe (2005)
China v. Yang Changjun
Counterfeiting Registered Trademark, Criminal proceedings

In 2007 Yang sold and stored 8435 counterfeited bags with the LOUIS VUITTON, GUCCI, CHANEL logos at the Silk Market, Beijing. Value of counterfeits RMB 767,000 (100,000 euro)
In 2010 Yang was convicted of a crime (counterfeiting)and sentenced to 3.5 year imprisonment

Tips for Protecting Trademark Right in China

Register trademarks in China in English and also in Chinese characters
Investigation and "notarization" important steps to gather evidence once confronted with counterfeit
AIC protection promptly but effective deterrence
Customs protection for exportation quite effective
Court proceedings are comprehensive and thorough
Choice of forum is key to filing litigation
Compensation will increase
Criminal prosecution possible but still not easy to get

what we cover today
Thank you for your attention

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