Powerpoint Slides

China IPR Webinar Series1

“Rollershoe v. Chee Ting Shoe Trading Co." – a case study on developing a brand protection strategy in China

Webinar presented by the United States Department of Commerceand the American Bar Association Section of International Law

Featuring:Ellen Szymanski, Department of CommerceScott Bain, Software & Information Industry AssociationElizabeth Chien-Hale, Institute for Intellectual Property in AsiaPaul Jones, Jones & Co.Bruce A. McDonald, Schnader Harrison Segal & Lewis LLP

November 13, 2007


Hypothetical 1: Rollershoe, Inc.

Manufactures and sells shoes with built-in, battery operated wheels; also apparel

Manufacturing in U.S. since 1990 TMs, Copyrights, Patents registered in U.S. Registered Trademarks:


Hypothetical 1: Rollershoe, Inc. Chee Ting Shoe Trading Company

Distributes foreign products in Chinese market July 10, 2007 trade show in Washington, DC

Rollershoe and Chee Ting exchange marketing materials and catalogs

Enter into distributorship agreement


Hypothetical 1: Rollershoe, Inc. Rollershoe registers trademark in China

Rollershoe chooses Chinese character name, and brand in Pinyin. Registers both in China.



1) Identify Rollershoe’s IP Portfolio

2) What has Rollershoe done to protect its IP in the U.S. and China?

3) What else could it have done?


Hypothetical 2: Rollershoe, Inc. After 1 year, 2 months Rollershoe sends Chee

Ting letter remind of agreement terms Rollershoes are everywhere in China, but

company’s reported sales numbers are down. Accidents lead to investigation in U.S.

Shoe Emporium unauthorized U.S. retailer; purchased from Fay King Shoes, Ltd. in China


Hypothetical 2: Rollershoe, Inc. Investigator tours Fay King factory in China,

finds extensive counterfeit toys and apparel bearing Rollershoe marks, copies of Rollershoes’ brochures and catalogs with Chee Ting’s phone numbers.

Rollershoe sends C&D to Chee Ting. Chee Ting responds that it owns the marks in

China and has registered several (see Table C).



1) What actions can Rollershoe take in China?

2) What actions can Rollershoe take in the U.S.?

3) What can the U.S. government do to assist Rollershoe?


Patent Protection in China

Elizabeth Chien-Hale

[email protected]


Patent Rights

Patent laws and rights are territorial Even though one application can be filed in

different countries Even though an applicant may, after meeting

certain requirements, claim the filing date of its first filing in the home country

Your US Patents will not protect you in China


What Rollershoe Inc. Could Have Done:

Apply for Design Patents: ornamental features, not examined, 10-year term



Apply for Utility Model Patents: shape and configuration, not examined, 10-year term



Apply for Invention Patents: products and methods of manufacturing, examined, 20-year term


The Patent Application Procedure

Applications submitted to the State Intellectual Property Office

Formality Examination for design and utility model applications

Substantive Examination for invention patent applications

In 2006, China received over 570,000 combined invention, design, utility model patent applications


Patent Protection in China

Not all inventions patentable in the United States are patentable in China: for example, software/business method patents are not easily granted

After two sets of amendments in 1992 and 2000, a third set of amendments in currently in progress


Patent Protection for Rollershoe

Products have been out in the US since Jan. 1, 1990

Majority of its old technologies will not be able to meet the novelty standards: priority date must be claimed within the 12-month period

Rollershoe should examine its patent portfolio and apply for patents in China for any new inventions


Enforcement of Patent Rights in China

Good legal framework in place through legislative changes to bring its laws into compliance with international treaty obligations

Good registration/application procedures

Enforcement, or lack thereof, has been the focus of international attention


What Can Rollershoe Do in China?

If Chee Ting applied for any patents for Rollershoe technologies in China, Rollershoe can invalidate these patents

Invalidation proceeding is before the State Intellectual Property Office

Decisions may be subject to judicial review


Enforcement Channels in China if Rollershoe Has Rights in China Administrative Judicial Factors to consider in choosing the

appropriate channel: Are you seeking a quick, local solution? Do you care about damages? Administrative decisions may ultimately end

up in courts Most would recommend the judicial route for

patent rights


Customs Protection

New Regulations on Customs Protection of Intellectual Property (IP) Rights came into force in March 2004

Customs officials can detain and confiscate imported and exported infringing goods at the border

Two types of protection: Active protection: for pre-recorded IPR only;

initiated by customs officials Passive protection: recording of IP rights with

the customs authorities no longer required; initiated by IPR holders


Customs Protection (continued) Even though all rights can be recorded,

customs is not very equipped to deal with complex patent infringement issues.


What Can Rollershoe Do in the US?

Section 337 investigation before the U.S. International Trade Commission: more and more Chinese companies are being sued and responding to the lawsuits

U.S. district courtsCustoms actions at other countries

where the infringing goods are sold: the EU countries for example


The End

Thank you!

Elizabeth [email protected]

TEL: 408-776-8719 FAX: 408-776-8718


Trademark Protection in China商标保护在中花人民共和国

Paul Jones

[email protected]

November 13, 2007


Trademark Rights商标权 Trademark laws and rights are territorial

Even though one application can be filed in different countries

Even though an applicant may, after meeting certain requirements, claim the filing date of its first filing in the home country

Your US trademarks will not protect you in China



Apply for Registration In China of:

ROLLERSHOE All RS marks 我乐鞋 WO LE XIE &

DESIGN



Apply FOR Registration in China in multiple classes:

Footwear Apparel toys


The Trademark Application Procedure

Applications submitted to the State Intellectual Property Office

Either directly or through the Madrid Process

Examinations currently backlogged by about 3 years

Status can be monitored online for free in Chinese


Trademark Protection in China 商标保护在中国

商标法 or Trademark Law adopted in 1982 After two sets of amendments in 1993 and

2001, a third set of amendments in currently in progress

Regulation for the Implementation of the Trademark Law adopted in 2002

Supreme People’s Court Interpretation on Several Issues Concerning the Application of the Law to the Trail of Civil Dispute Cases Involving Trademarks – 2002


Enforcement of Trademark Rights in China 商标权实施 Good legal framework in place through

legislative changes to bring its laws into compliance with international treaty obligations

Good registration/application procedures

Chinese courts do enforce trademarks, and especially foreign owned trademarks


Enforcement of Trademark Rights in China 商标权实施 Many IP decisions now available at:

http://ipr.chinacourt.org/

Court web sites available at:

http://www.chinacourt.org/fyzx/


What Can Rollershoe Do About Trademarks in China?

Under the Trademark Law:

Articles 15 & 41 – where an agent of a representative registers trademarks of the person for whom it acts – request TRAB to cancel

With respect to the RS marks, Articles 31 & 41 – registration by other cannot prejudice to prior right of Rollershoe – have 5 years to request review and cancellation by TRAB



With respect to RS marks, Articles 52 & 53 – use of similar marks

Articles 13, 14 & 41 – well known mark

Article 41 – Where the registration of a trademark was acquired by fraud or any other unfair means – TRAB shall cancel



Under the 反不正当经济法 – Anti-Unfair Competition Law Article 5 – counterfeiting or copying

packaging

Decisions may be subject to judicial review


Enforcement Channels in China Administrative Judicial Factors to consider in choosing the

appropriate channel: Are you seeking a quick, local solution? Do you care about damages? Administrative decisions may ultimately end

up in courts Trend is to recommend the judicial route


The End

谢谢Thank you!

Paul [email protected]

TEL: 416-703-5716 FAX: 416-703-6180


China IPR Webinar SeriesNovember 13, 2007

Bruce A. McDonald

SCHNADER HARRISON SEGAL & LEWIS LLP

2001 Pennsylvania Ave., N.W., Suite 300

Washington, D.C. 20006

(202) 419-4235


Questions

What else might Rollershoe have done to protect its IP in the U.S?

What remedies does Rollershoe have in the U.S.?

Is Rollershoe liable for Sam Lo’s injuries?


Recordation of Trademarks and Copyrights With U.S. Customs

See McDonald and Yoo, “Recording Trademarks, Trade Names and Copyrights with U.S. Customs: Requirements, Procedure and Fees,” in Masterson, ed., International Practitioner's Deskbook Series: International Trademarks and Copyrights - Enforcement and Management (American Bar Association 2004)


Review of Customs Determination Lois Jeans & Jackets, U.S.A., Inc., v. United States, 5 C.I.T.

238, 566 F. Supp. 1523 (1983)

Ross Cosmetics Distribution Centers, Inc. v. United States, 18 C.I.T. 979, 34 USPQ2d 1758 (1994)

Sakar International, Inc. v. United States, 466 F. Supp. 2d 1333, 2006 Ct. Intl. Trade LEXIS 182 (2006)

United States v. Nippon Miniature Bearing Corp. and Minebea Co., Ltd., 25 C.I.T. 635, 155 F. Supp. 2d 707 (2001)

Vivitar Corp., Plaintiff v. United States, 8 C.I.T. 109, 593 F. Supp. 420 (1984)


Remedies in U.S.

Action for Exclusion Order at U.S. International Trade Commission

Action for Injunctive Relief and Damages in United States District Court


U.S. Court Action

Personal Jurisdiction

Trademark License / Joint Venture

Irreparable Harm

Kitty Walk Systems, Inc. v. Midnight Pass Inc., 431 F. Supp. 2d 306 (E.D.N.Y. 2006)

Christopher Norman Chocolates, Ltd. v. Schokinag Chocolates North America, Inc., 270 F. Supp. 2d 432 (S.D.N.Y. 2003)


ITC Complaint

Faster / less expensive

Useful discovery for later court action

Decreases cost of later court action

Equitable relief against foreign parties not subject to personal jurisdiction

Easier burden of proof


ITC Complaint

Section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337

In case of patent or trademark infringement, Section 337 prohibits:

Importation

Sale for importation

Sale after importation


U.S. Industry Requirement

Relevant industry exists or is being established.

• investment in plant and equipment;

• employment of labor or capital;

• engineering, research and development; or

• licensing.


ITC Complaint

Examined by Office of Unfair Import Investigations.

Recommendation to Commission w/in 30 days.

Commission usually determines whether to investigate w/in 30 days of filing complaint.

Notice of decision published in Fed. Reg.

If investigation is commenced, complaint is served on embassy of foreign respondent.

Decisions not to investigate are rare.


ITC Procedure

Hearing before ALJ

Commission Rules, 19 CFR Part 210

APA, 5 U.S.C. § 551 et seq.

ITC offices, Washington, D.C.

ALJ initial determination certified to Commission.

Commission may adopt, modify or reverse.


Counterclaims

ITC does not hear counterclaims

But invalidity may be raised as defense

Counterclaim must be removed to federal court

Complainant may request stay of federal court action

Federal court counterclaim does not delay ITC investigation


Action by Commission

Investigation concluded “at the earliest practicable time” = 15 months from publication of notice of investigation in Fed. Reg.

Decision not to review AJL initial determination is final agency decision


ITC Orders

Exclusion Order

All infringing products (general exclusion); or

Infringing product of named manufactuurer (limited exclusion)

Cease and Desist Order

Resale in U.S.

Preliminary Injunction / TRO


Product Liability

Rockwell, Trademark Licensor’s Liability for Injury or Death Allegedly Due to Defect in Licensed Product, 90 A.L.R. 4th 981

Note, Tort Liability of Trademark Licensors, 55 Iowa L.Rev. 693 (1970)

Franklyn, The Apparent Manufacturer Doctrine, Trademark Licensors and the Third Restatement of Torts, 49 Case W. Res. 671 (1999)

Franklyn, Toward A Coherent Theory Of Strict Tort Liability For Trademark Licensors, 72 S. Cal. L. Rev. 1 (1998)

Germain, Tort Liability of Trademark Licensors in an Era of "Accountability": A Tale of Three Cases, 69 Trademark Rep. 128, 136 (1979)


Restatement

§ 400 of the Restatement (Second) of Torts: “One who puts out as his own product a chattel manufactured by another is subject to the same liability as though he were its manufacturer.”

Compare Restatement (Third) of Torts: Products Liability § 14 cmt. d (1998) (apparent manufacturer doctrine "does not, by its terms, apply to the owner of a trademark who licenses a manufacturer to place the licensor's trademark . . . on the manufacturer's product and distribute it as though manufactured by the licensor")


Issues

Strict Liabilty

Control

Negligence

Defective Design

Need for enforcement action in U.S.


Factors

Risk created by approving unsafe product

Ability and opportunity to eliminate unsafe character of product

Consumer’s lack of knowledge of danger

Consumer’s reliance on trademark / trade name

55

THE END

.

Technology

Powerpoint Slides