APRIL 2013

H KIEHL

ALL-CLAD ARNO CALOR KRUPS LAGOSTINA

MOULINEX ROWENTA SEB TEFAL

Patent Right Enforcement in CHINA

INTRODUCTION SEB Increase in patent filing Experience in enforcing patent in CN (Actifry &

Fresh Express cases) Problems & difficulties in enforcing patent in CNConclusion

Patent Right Enforcement in CHINA

GROUPE SEB is:

The world leader of small domestic appliances.A mission : to improve the consumer's daily life : a "B to C"

business.A strong innovation capacity : No. 20th in France with more

than 100 new inventions applications per year since 2009A strong trademarks portfolio : 4 major trademarks, 20 well

known trademarks in their field.A worldwide presence : manufacturing in Europe, Brazil, USA

and China, sales companies in any significant country.A stable shareholder association.

GROUPE SEB is … innovation since the beginning

Pressure cooker Cocotte-minute® Non stick pan TEFAL® Smokeless fryer Steam station and enamel sole iron … Multi purpose food processor RONDO®, KALEO® On the table fun cooking (raclette, grills…) Mini vacuum cleaner DYMBO®, sucking head DELTA®

GROUPE SEB is … innovation always today

Low fat fryer Hot water on demand Silent vacuum cleaner Food processor with multiple colorful tools Multi recipes yogurt maker Round bread maker

The direct client : the distributionMass market

Department stores

Spécialist

6

INTRODUCTION

How to fry with little oil : direct strong

hot air flow to the bottom of a pan

where a paddle gently turn over the

food = THE TECHNICAL PATENT

The Shape which attract the

attention of the consumer = THE

DESIGN

The name ACTIFRY to promote the buzz = THE

TRADEMARK

What is Intellectual Property for SEB ?

Product protection under its 3 components presented to the consumer

Introduction to SEB INCREASE IN PATENT FILING Quality of anti-counterfeiting measures Technical collaboration with Chinese company Conclusion

Patent Right Enforcement in CHINA

Patents filing in China increased x5 between 2002 and 2012

In small house appliances, numerous "Utility Patent" for details between technical patent and esthetical

patent.

Fierce and fast competition among Chinese companies for export orders

Employee fast turn over raises question of weak confidentiality and lack of exclusivity

Government subsidize patent filing and "innovative" companies

Each variant of a subject may filed independently (bread maker "baguette" rack)

Patent Right Enforcement in CHINA

Introduction to SEB Increase in Patent filingExperience in enforcing patent in CN

(Actifry & Fresh Express cases) Problems & difficulties in enforcing patent in CN Conclusion

Patent Right Enforcement in CHINA

IP Right counterfeit search : classic

The classical manner : local commercial companies run "store check" and send pictures and samples to IP Department

Written proof are requested Internet watch both in English and in Chinese language

www.alibaba.com www.amazon.cn www.360buy.com/product/ www.dhgate.com,

The major information source is the huge Chinese Export Fair taking place twice a year in Guangzhou (April, October)

A compulsory presence for Chinese small & medium size companies eager to export without having to maintain a costly foreign

network.

Numerous arguable products are for markets "free of rights" (Iran, Irak, Afrique, etc.)

IP Right counterfeit search : fairs

Counterfeits does exists, at most 5/1000 of presented products.

Ransom of glory : under Confucianism the student reproduces the master.

A Complaint Desk put early in place by organizers and run by IPO and AIC competent persons.

Compulsory representation by a Chinese lawyer so that the complaint file is perfect (on IP rights and formal details)

When convinced, the IPO or AIC representative goes to the booth to have the counterfeit removed : possible fight.

IP Right counterfeit search : classic

YIWU City : numerous shopping center for export, one dedicated only to Household appliances

One visit per year necessary to watch for counterfeitsAs "quality engineer", it is normal to ask to visit the factory.Local AIC is willing to remove obvious counterfeit.

IP Right counterfeit search : classic

Patent n°2 : During Search – June 2004 :

Hot air flow circuity

Patent N°3 during development : february 2006

Food stirring paddle

Patent N°4 during development : february 2006

Food stopping means

Cooking method by stirring under heat flowPatent n°1 PIONNIER : during Search –june 2004

Patent case example : Actifry

Removable internal bowl Patent n°1b divisionnal during Développent -2006

Patent Case Example: Actifry

In October 2009 (only two years after product launch), carbon copy of Actifry was displayed in the Fair: Complaint filed and copy removed, then a civil lawsuit.

One year later, another competitor (the “2nd competitor”) modifies the product: halogen heating, fixed paddle for a turning bowl, but the heating flow stays the same : still withdrawn and a civil lawsuit is followed.

Patent Case Example: Actifry

After the civil lawsuit, the 2nd competitor further modifies its product to try to go around Actifry patents: closes the airflow behind the bowl for a smaller flow just above, Court Action on removable bowl

Patent Case Example: Actifry Other copies of Actifry: after the civil lawsuit, the competitor

modified the product – doubles or removed the paddle

Patent Case Example: Fresh Express

Patent No. 1 Utility model on anti-wedging

means

Patent No. 4 Design patent of the overall

shape of Fresh Express

Patent No. 3 Utility model on the transparent

cover for the cutting tools

Patent No. 2 Utility model on the driving organ

Patent Case Example- repeat infringement: Fresh Express

In October 2010, carbon copy of the Fresh Express was observed during the fair: complaint filed and removed by the IPO, then a civil lawsuit.

After the lawsuit, the competitor modified the overall shape but the modified product still infringed three um patents: two times of customs interception and two more civil lawsuits to finally stop the competitor from reproducing the relative patents again.

Introduction to SEB Increase in Patent filingExperience in enforcing patent in CN (Actifry &

Fresh Express cases) Problems & difficulties in enforcing patent

in CN Conclusion

Patent Right Enforcement in CHINA

Problems & difficulties in enforcing patents in CN

Collection of infringement evidence in a patent infringement case

• Notarized purchase – sometimes it is unfeasible to arrange the notarized purchase when the infringer is very cautious

• Official preservation of evidence – ①some local courts do not go to the defendants’ domicile to conduct evidence preservation because the judges are overloaded; ② the preservation usually cannot be arranged timely.

• Official preservation of property - ①some local courts do not seize the infringing products as “property”; ② the preservation measure usually cannot be arranged timely, either.

• Customs interception – high amount of customs bond

IPO was efficient to raid and destroy identical Design patent counterfeit (2002 – 2003)

Then, small modifications brought lengthy discussions between infringer and administration. IPO requests that the cases be transferred to Court

Court acted as powerful mediator as long as IP owner requests were reasonable (only destruction of product and of moulds, little monetary damages). But the question of evidence of counterfeit solely for export became difficult.

The draft fourth revision of China’s Patent Law may give the IPO more power to enforce patent.

Patent case : IPO

Problems & difficulties in enforcing patent in CN

Patent enforcement through the IPO -

Advantage

• Some IPO (in Guangdong Province) can

inspect the infringer to obtain evidence and

identify the relative moulds

• The procedure is comparatively more simple

than a civil lawsuit

Disadvantage

• Some IPOs do not conduct the inspection

• The IPO cannot force the infringers to pay monetary

compensation

• The administrative decision may go through the

judicial review of the court before coming into

effective

Problems & difficulties in enforcing patent in CN

More power to be granted to local IPOs??

If preliminary evidence is presented, can the local IPO help the patentee to conduct official inspection timely to secure the evidence?

After the IPO secures the evidence, the patentee can go to court with the evidence collected by the IPO?

Power to fine the infringer in case of repeat infringement?

Introduction to SEB

Increase in Patent filing

Experience in enforcing patent in CN (Actifry & Fresh Express cases)

Problems & difficulties in enforcing patent in CN

CONCLUSION

Patent Right Enforcement in CHINA

THANKS FOR YOUR ATTENTION