Chinese Intellectual Property
Rights and Enforcement
Antony Craggs
Associate
Intellectual Property
Wragge & Co LLP
Wragge & Co LLP: General
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Background:
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We are a leading European law firm providing legal services to clients worldwide.
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We have over 110 partners and more than 500 qualified legal staff.
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We advise on all aspects of corporate and commercial work.
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We are specialists in all aspects of intellectual property including patents, designs, trade
marks, unfair competition / passing off, copyright, database rights, marketing and
advertising.
Antony Craggs, Associate
Wragge & Co LLP: Intellectual Property
General
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Intellectual Property Specialists:
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European High-tech Law Firm of the Year 2009 - Managing Intellectual Property.
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No 1 UK National Firm – Legal Week Client Satisfaction Report 2009
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Runner-Up TMT Team of the Year 2009 – The Lawyer Awards 2009
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UK Intellectual Property Law Firm of the Year 2007 – Managing Intellectual Property
Antony Craggs, Associate
Wragge & Co LLP: Intellectual Property
China
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Cradle-to-Grave Intellectual Property Management
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Registration
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Management & Exploitation
– Licensing
– Assigning
– Tax
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Enforcement
– Administrative Action
– Civil Litigation
– Criminal Sanction
– Customs Action
Antony Craggs, Associate
Agenda
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Chinese IP Rights:
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Overview
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Copyright
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Trade Marks / Unfair competition
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Designs
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Patents
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Licensing
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Enforcement of Chinese IP Rights
Antony Craggs, Associate
Chinese IP Rights: Overview
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System:
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“Teenage” system: 15-25 years old
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Compliant with TRIPS and WTO (in most areas)
Antony Craggs, Associate
Chinese IP Rights: Copyright
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Features:
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The subject is not always “artistic” – product leaflets, website designs, advertising
slogans and product packaging
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Arises automatically
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Voluntary recordal
– Sample of the work to be registered
– Description of the work (including the purpose of its creation, the creation process and the
'creativeness' of the work)
– Obtain information about the author and the work including: a) the author's name; b) the
author's passport; c) the date and place for completion of the work; and d) the date and
place of first publication;
– Obtain any relevant documents regarding the ownership of copyright including: a) the
employment contract or other copyright assignment; b) (if possible) a letter from the
author stating that he/she created/modified the work and that you are the owner of the
copyright; and c) any other copyright registration certificates for other countries
– Obtain a copy of the certificate of incorporation for the copyright owner.
Antony Craggs, Associate
Chinese IP Rights: Trade Marks (1 of 2)
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Types of sign protected:
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A sign that identifies the goods or services of a producer or service provider and
allows the consumers to distinguish these goods or services from those of others.
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A sign may be composed of words, devices, letters, numerals, three-dimensional
shapes
Translations of non-Chinese signs:
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It is extremely important to register common translations and transliterations of
non-Chinese signs. The registration of a sign in roman characters does not
automatically protect the trade mark against the use of the same or similar sign
written in Chinese.
Term:
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Renew every 10 years
Antony Craggs, Associate
Chinese IP Rights: Trade Marks (2 of 2)
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Class:
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Filing:
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Absolute and relative grounds
Process:
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2 years to register a mark (but aiming for one year)
Examination:
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“First-to-file” system: prior use affords little protection unless your mark is well-known
Time:
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Nice Classification with sub-classes
Approve – advertise – 3 months opposition – registered
Cancellation:
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3-year non-use, absolute/relative grounds, but slow and uncertain
Antony Craggs, Associate
Chinese IP Rights: Designs
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Features:
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Design patents (no unregistered designs)
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No substantive examination
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10 years protection term
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Design registration is relatively simple and inexpensive, and is very useful for
enforcement
Antony Craggs, Associate
Chinese IP Rights: Patents
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Types of patents:
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“Invention” patent: Innovations in the field of technology that are new and
inventive and that are practically applicable.
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“Utility model” patent: Technical solutions relating to the shop and / or structure
of an object that are new.
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“Design” patent: Original designs relating to the shape, pattern, colour or a
combination of an object.
Term of patents:
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Invention patents: 20 years from filing date
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Utility model patents: 10 years from filing date
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Design patents: 10 years from filing date
Antony Craggs, Associate
Licensing
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Confidentiality agreement
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Due Diligence
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Identify the company’s Chinese name (not pinyin), registered address and date of
incorporation
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Identify the company’s legal representative, directors and shareholders
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Accounts / credit check / export licence
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Referees / private investigator
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Inspection / Audit
Contract
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Written contract which is short, bi-lingual and subject to Chinese law
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State clearly who owns the intellectual property developed/licensed
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State clearly payment terms
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Chinese courts / arbitration body
Antony Craggs, Associate
Enforcement of China IPR Rights: Overview
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Three main enforcement options:
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Administrative Action
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Civil Litigation
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Criminal Sanctions
Antony Craggs, Associate
Enforcement of China IPR Rights:
Administrative Action - Overview
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Chinese administrative body enforces intellectual property rights.
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Administrative bodies:
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Intellectual Property Offices (e.g. Yongkang IPO):
– Patents (inc. designs)
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Administration for Industry and Commerce (AIC):
– Trade marks and unfair competition
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National Copyright Administration:
– Copyright
Antony Craggs, Associate
Enforcement of China IPR Rights:
Administrative Action - Remedies
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The administrative body may:
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Raid premises and seize and destroy infringing items
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Order infringing party to cease infringement
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Fines (low)
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Compile evidence
Antony Craggs, Associate
Enforcement of China IPR Rights:
Administrative Action - Advantages
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Administrative actions have the following advantages:
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Cost effective
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Efficient
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‘Immediate’ enforcement
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Evidence gathered can be used in civil action
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Can be used as leverage for settlement
Antony Craggs, Associate
Enforcement of China IPR Rights:
Administrative Action - Disadvantages
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Administrative actions have the following disadvantages:
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Idiosyncratic
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No damages
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Decision does not bind the court in any subsequent civil litigation
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Subject to appeal
Antony Craggs, Associate
Enforcement of China IPR Rights:
Civil Litigation (1 of 4)
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Features of the court systems:
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Civil law system
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No doctrine of binding precedent
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Four levels of courts
– Basic People’s Court
– Intermediate People’s Court
– Higher People’s Court
– Supreme People’s Court
Antony Craggs, Associate
Enforcement of China IPR Rights:
Civil Litigation [2 of 4]
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Injunctions:
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Court can issue interim injunctions (rare)
Two tier approach:
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Court determines infringement
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SIPO determines invalidity of trade mark / design / patent
Stay (pending invalidation proceedings):
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Depends: Less likely to stay infringement actions involving invention patents
Antony Craggs, Associate
Enforcement of China IPR Rights:
Civil Litigation (3 of 4)
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Timeline:
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First instance: 6 – 9 months
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Second instance: 3 months
Damages:
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Typically low but signs of increasing
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2007: Schneider Electric: Ordered to pay US$46 million (appealed and settled for
US$23 million)
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2008: Samsung: Ordered to pay US$7.3 million
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2009: Neoplan: Awarded US$3 million
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2010: Strix: Awarded US$1.5 million
Antony Craggs, Associate
Enforcement of China IPR Rights:
Civil Litigation (4 of 4)
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Remedies:
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Injunction
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Seizure and destruction of infringing goods
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Damages
Costs:
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Only small proportion of costs recoverable
Antony Craggs, Associate
Enforcement of China IPR Rights:
Criminal Sanctions - Overview
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Public Security Bureau (PSB
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Can be referred if liability is over a certain threshold:
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Individuals:
– Turnover: RMB 50,000 or illegal profit of RMB 30,000
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Companies:
– Turnover: RMB 150,000
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Consequences:
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Up to 3 years imprisonment
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Higher punishment of 3 – 7 years if value is 5 times the threshold
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More sever penalty if crime relates to substandard goods that affect people’s
health and safety
Antony Craggs, Associate
Enforcement of China IPR Rights:
Conclusions
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Implement the following steps:
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Register your intellectual property rights
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Perform due diligence on your business partners /licensees
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Ensure your contracts protect your intellectual property rights
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Make scheduled and unscheduled visits to your operations in China
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“Guanxi”: Build up contacts with local government authorities
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Patrol trade fairs
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Enforce your intellectual property rights
Antony Craggs, Associate
Antony Craggs, Associate
Dr. Jian Xu, Associate
Email:
DDI:
Email: jian_xu@wragge.com
DDI:
+86(0)2038103782
Mobile: +86(0)13 902 297 469
antony_craggs@wragge.com
+ 86 (0)203 810 3783
+ 44 (0)207 664 0341
Mobile: + 44 (0)792 188 1397
Antony Craggs, Associate
QUESTIONS
& ANSWERS