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KING & WOOD
KING & WOOD
PRC IP & Development Trends
PART I : IP Registration in China PART II : Protection of Non-Registrable IP PART III: Dual IP Enforcement System PART IV : New Development in IP Legislation
& Practice
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PART I
IP Registration in China- Procedures, Time Frame & Costs
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Trademark
Authority: the Trademark Office (“TMO”)
PRC adopts “first come, first file” principle, but
protects prior rights
Follows Nice Classification English Edition
Divides International Classifications into Sub-classes
Permits Co-existence in different Sub-classes
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Trademark
Filing through PRC subsidiaries or agents (a signed
POA in favor of agent required)
Application process: 30 months (recently)
Registration Term: 10 years
Official filing fee: RMB1,000 (US$125)
Opposition, cancellation, judicial review available
KING & WOOD PRC LAWYERS
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Chinese Trademark Statistics
0
100000
200000
300000
400000
500000
600000
700000
Total
Domesti c
Forei gn
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Copyright & Software
Authority: National Copyright Bureau (“NCA”)
Voluntary registration
Bona fide evidence, unless reasonably challenged
Official Registration Process:
Copyright: 1 month; Software: 2 months
Basic Official Charges: RMB250-1000+ (US$32-125+)
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Patent
Patent for Invention(Patent)
Utility Model
Design
Subject Matter Any new technical solution relating to a product, a process, or improvement thereof
Any new technical solution relating shape, structure or combination of a product
New design of shape, pattern or their combination, or combination of color , shape or pattern of a product
Patent Term 20 years 10 years 10 years
Examination Substantial Review
FormalityReview
Formality Review
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Patent
Authority: State Intellectual Property Office
(“SIPO”)
Invention: 3 – 4 years
Utility Model: 12 months
Design: 10 months
KING & WOOD PRC LAWYERS
KING & WOOD
Chinese Patent applications Statistics
0
20000
40000
60000
80000
100000
120000
140000
160000
2001 2002 2003 2004 2005
Patent-FPatent-CNUM-F
UM-CN
Design-FDesign-CN
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Top Ten Foreign Corporations in 2005
No.Countr
yIn the name of
1 KR三星电子株式会社
Samsung Electronics 3508
2 JP松下电器产业株式会社
Panasonic 3042
3 NL皇家飞利浦电子股份有限公司
Phillips 2709
4 JP索尼株式会社
Sony 1652
5 KRLG电子株式会社
LG Electronics 1424
6 US国际商业机器公司
IBM 1213
7 JP株式会社东芝
Toshiba 1177
8 JP精工爱普生株式会社
Seiko Epson 1119
9 KR三星 SDI株式会社
Samsung SDI 1052
10 JP佳能株式会社
Canon 940
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Top Ten Countries in 2005
NO. STATES NUMBER
1 Japan 36221
2 US 20395
3 Korea 9300
4 Germany 7502
5 The Netherlands 3988
6 France 3190
7 Swiss 2106
8 Italy 1632
9 UK 1613
10 Sweden 1101
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PART II
Protection of Non-registrable IP
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Trade Secrets & Know-how
"Business Secret" is defined in PRC as “technical information and
operational information which is not known to the public, which is
capable of bringing economic benefits to the owner of rights, which has
practical applicability and which the owner of rights has taken
measures to keep secret.”
Infringements of Business Secrets:
(1) obtaining business secrets from the owners of rights by stealing,
promising of gain, resorting to coercion or other improper means;
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Trade Secrets & Know-how
(2) disclosing, using or allowing others to use business secrets of the owners of
rights obtained by the above means;
(3) disclosing, using or allowing others to use business secrets that he has obtained
by breaking an engagement or disregarding the requirement of the owners of rights
to maintain the business secrets in confidence. Where a third party obtains, uses or
discloses the business secrets of others when he obviously has or should have full
awareness of the illegal acts mentioned above, he shall be deemed to have
infringed the business secrets of others.
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Import & Export of Technology
3 Categories: Freely Tradable, Restricted or Forbidden Technologies
Recordals of I/E freely tradable technology contracts
- Contracts are formatted upon execution
- No penalties for non-recordals; recordals recommended if I/E of equipment, foreign change
or tax issues involved.
Be aware of PRC compulsory registrations on licensing terms of
imported technologies
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Import & Export of Technology
Illegally Monopolizes Technology & Impedes
Technological Progress
1. Restricting one of the parties from conducting new research and development or from
using the technology over which improvement has been made on the basis of the
technology of the contract in question, or the terms for exchange of improved
technology between the two parties are unparallel, including requiring one party to
provide the technology over which improvement has been made on his own to the
other party without consideration or transferring such technology to the other party
without reciprocity, or taking exclusive possession of or sharing the intellectual
property rights of such improved technology without consideration;
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Import & Export of Technology
Illegally Monopolizes Technology & Impedes
Technological Progress
2. Restricting one of the parties from acquiring from another source technology similar to,
or competing with, that of the technology provider;
3. Obstructing one of the parties in his full implementation of the subject technology of the
contract in a reasonable manner according to market demand, including obvious and
unreasonable restriction of the technology recipient of quantity, type, price, sales
channels and export market of the products produced or services provided in the
implementation of the technology of the contract in question;
KING & WOOD PRC LAWYERS
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Import & Export of Technology
Illegally Monopolizes Technology & Impedes Technological
Progress
4. Requiring the technology recipient to accept incidental conditions that are unnecessary for
the implementation of the technology, including the purchase of unnecessary technology, raw
materials, products, equipment and services as well as accepting unnecessary personnel;
5. Unreasonably restricting the channels or sources for purchase of raw materials, spare parts,
products or equipment by the technology recipient; or
6. Prohibiting the technology recipient from raising objection to the validity of intellectual
property rights of the technology of the contract in question, or attaching conditions to such
objection.
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PART III
Dual IP Enforcement System - Procedures, Remedies and Practical Choices
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Administrative Enforcement
Authorities State Administration for Industry and Commerce (AIC) - trademark, trade name, trade dress, advertising, market supervision
State Intellectual Property Office (SIPO)– patent
General Administration for Quality Inspection, Quarantine & Supervision Bureau (TSB) – labeling, product quality
National Copyright Administration (NCA)– copyright & publication
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Administrative Enforcement
Authorities General Administration of Customs – anti-counterfeiting , anti-piracy, patent infringement
Ministry of Culture – anti-piracy, anti-piracy of online music, TV, film and sound recordings
Ministry of Public Security – anti-counterfeiting & piracy, investigation of IP crimes
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Administrative Enforcement
Authorities
Procedure & Documents
- Written complaint stating rights and infringing facts
- Proof of on-going infringement (infringing sample/photo)
- Proof of rights (copy of TM certificate sufficient) ,
- POA (signed copy sufficient, but certain provinces, e.g., Guangdong,
require it in a notarized and legalized form)
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Administrative Enforcement
Authorities Relieves
- On-site inspection & inquiry
- Confiscation or seal of infringing goods, tools, book-keepings
- Order to stop infringement
- Fines (several times of illegal turnover; TM cases: up to 3 times of illegal
turnover or RMB100,000 (US$12,500)
- Destruction of infringing goods
- Transfer of serious cases to Police for criminal investigation
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Administrative Enforcement
Authorities Pros
- Quick, simple & relatively cost-effective solution
- More suitable for straightforward trademark counterfeits &
infringements, trade dress infringements, false
advertisings/publicities, and certain CDs/DVDs, sound recordings &
software piracies, etc..
- A useful mean of evidence preservation for potential civil/criminal
pursuing.
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Administrative Enforcement
Authorities
Cons
- Different enforcement levels at different levels of authorities
- Certain local protectionism unavoidable
- No Compensation available (unless mediated or settled)
- Weak for copyright and patent enforcement
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2005 Administrative Enforcement Trademark
0
10000
20000
30000
40000
50000
Trademark
Total
Foreign related
Transfer tocriminalinvestigation
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2005 Administrative Enforcement Copyright
0
2000
4000
6000
8000
10000
copyright
Total
CriminalTransfer
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2005 Administrative Enforcement Patent
0
1000
2000
3000
4000
5000
patent
Total
Infringmentestablished
Criminaltransfer
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2005 CUSTOMS Protection
6307
125
1159
1210
9978
customs
ten thousand RMB
cases
export
import
recordals
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Supreme People’s Court
Higher People’s Courts
Municipalities directly under the Central Government
Provinces, autonomous regions
Intermediate People’s Courts
Municipalities directly under the Central Government
Provinces, autonomous regions
Maritime courts Railway transport courts
Basic People’s Court
PRC Court System
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Judicial Protection of IP - Civil
Not encouraged previously, more encouraged after China’s WTO
Stronger deterrent effect than administrative enforcement
Preliminary Injunction, evidence or assets preservation available
Remedies
- Order to stop infringement
- Order to eliminate infringement effects/influences
- Compensation of damages and legal costs
KING & WOOD PRC LAWYERS
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2005 Court new cases- Civil
6096
2947
1782
1303 504copyright
patent
trademark
unfair-competition
others
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Judicial Protection of IP - Criminal
Strongest deterrent effect in anti-counterfeiting/piracy, trade
secrets infringements
Currently most desired and pushed by foreign right holders in
China
Emerging legal culture of Chinese and Chinese governments on
pursuing IP infringers’ criminal liabilities
7 IP Crimes with new more operable criteria
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2005 Court Cases – Criminal
Criminal liabilities pursued in 505 cases and to 741
persons
3567 new cases
Certain difficulties in establishing criminal cases
Transfer of administrative IP cases to PSB (Police)
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PART IV
New Developments & Trends – Legislation, Enforcement & Judicial Protection
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IP Legislation
Proposed to further amend Trademark Law
Proposed to amend Patent Law
Copyright: new administrative rules and potential joining of
international treaties on Internet copyright; proposed Supreme Court’s
interpretation on music TV
Anti-unfair Competition Law: proposed Supreme Court’s interpretation
on conflicts of prior rights, etc..
Proposed legislation of Anti-Monopoly Law
KING & WOOD PRC LAWYERS
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IP Administrative Enforcement
Chinese Government’s new emphasis of her stance in IPR: IP rights are private rights, and
right holders shall take more initiatives to protect their IP rights.
Industrial IP right holders have been observed to become more proactive when dealing with
Chinese enforcement authorities – exchange of opinions, visits, training and participations
of enforcement authorities’ IP events
Certain enforcement authorities in major cities have been observed to become more
proactive and more willing to protect the IP rights of the rights holders who have
demonstrated more interests and willingness to collaborate with the enforcement
authorities.
Administrative authorities have recently been observed to be more willing to transfer cases
to Police for criminal investigations.
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IP Judicial Protection
Chinese Government’s IP legislation and practice in recent years indicate a shift from heavy
administrative protection to judicial protection, especially in the areas of copyright and
patent infringements.
More much higher amount of compensations, maximum statutory damages or much higher
fix-term imprisonments were recently ordered by the Courts.
More emphasis on evidence, examination and cross-examination on evidence.
Various pilot reforms of Court’s trial system or methods are observed – Order of
Investigation (Diao Cha Ling), unified IP tribunal for administrative, civil and criminal cases.
More…..
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THANK YOU!
谢谢 !
Gabriella G. LiuKing & Wood PRC Lawyers
[email protected]: (1 ) 510-396 9297 (US)
(86)10-5878 5105 (Beijing)
KING & WOOD PRC LAWYERS
