Tag:  “China”  | (24) posts

New hope for trademark owners in China

In China, the trademark system is based on the “first-to-file” system, which means that the first company or person to file owns the legal right to the trademark. There is no requirement for the intention to actually use the mark as we know it from a.o. the US system.

Up until now the so called “Trademark Squatters” have been a huge problem in China. These Trademark Squatters file hundreds of names with the Chinese authorities long before the brand owners enter the Chinese market and then they try to extort the owners in settlements, forcing them to “pay up” if they wish to be able to use their trademark in China.

Revised rules to prohibit trademarks registered in bad faith
China has recently implemented a new revised set of rules that among other things prohibits registering trademarks in bad faith. This is a step towards the system we know from Europe.

Until this point, trademark owners have been left with the options of either creating an entire new trademark for the Chinese market, expensive settlements or taking legal actions and spending huge amounts on legal fees in the hope of gaining legal right to their own trademark. Tesla, Apple, Sothesby’s and Michael Jordan are only some of the many trademark owners that have fought battles with these Chinese Trademark Squatters. Many of these battles have proven unsuccessful up until now.

Recently, the American brand Michael Bastian has fought for their trademark and won the case against a Trademark Squatter before the Chinese Trademark Review and Adjudication Board (TRAB). A Chinese company had registered the trademark Michael Bastian’s English name and the Chinese transliteration in 2007. The TRAB found that the Trademark Squatter had abused the trademark registration, use and administration process in China even though there was insufficient evidence of Michael Bastian’s use of the trademark or publicity in China prior to the date of filing by the defendant. Further the TRAB found that the defendant violated the principle of Honest and Good Faith. According to his principal counsel Foley & Lardner, Michael Bastian is the first non-Chinese individual or entity to win a case under the principle of honest and good faith despite little evidence of prior use.

A step in the “right” direction, but…
So does this mean that all troubles are solved in China and that trademark owners can feel home safe? Definitely not! It is important that trademark owners are aware that there are distinguishing features in this decision and uncertainty as to how much weight the TRAB will give to this decision in the future. In the Michael Bastian case, the TRAB cited that the defendant had engaged in similar conduct and attempted to file many trademarks identical or similar to other prior trademarks. Therefore in this case it was rather clear that the defendant actually was a Trademark Squatter. It is therefore uncertain whether the TRAB would have reached the same decision had the defendant not clearly just registered trademarks to put pressure on right holders and make money from this.

However, the decision is a step in the “right” direction so to speak. Moreover, this decision is important in the sense that it will send a signal of increased confidence to foreign companies entering the Chinese market, and to use their name and IP to build their brand in China. Hopefully, this decision will set precedent and make it easier for trademark owners to regain and protect their IP rights in China.

It is still uncertain what line the TRAB will take against these Trademark Squatters, and we at Awapatent will definitely advice right holders to still consider the previous cases in China as a warning to get their trademarks registered early in China, at least if at some point in the future China is considered a market of interest.

Maria Dam Jensen, Legal Counsel

New IP courts major step forward in China’s judicial reforms

In November and December 2014, China announced the long awaited establishment of three specialized IP courts in the Tier 1 cities of Beijing, Guangzhou and Shanghai. These courts are empowered to hear the following cases:

  • First instance civil and administrative cases related to patents, new plant varieties, layout design of integrated circuit, technological secrets and computer software;
  • First instance administrative cases involving copyright, trademark and unfair competition against administrative decisions of the State Council Department or above the county level departments (Beijing IP court will have exclusive jurisdiction over first instance appeals against decisions of the IP Administrative Authorities, such as the Patent Review Board and the TRAB);
  • First instance civil cases regarding the recognition of well-known trademarks and;
  • Second instance civil and administrative cases regarding copyright, trademark and unfair competition heard at first instance by district/primary courts.

The IP courts in Beijing and Shanghai will have jurisdiction over the cases in their respective cities, while Guangzhou IP court will have cross-regional jurisdiction over the entire Guangdong province.

IP professionals in China are generally upbeat about these welcome developments and see many potential advantages for IP owners flowing from the introduction of these new IP courts:

  • The establishment of specialist IP courts will help unify the trial standards and make rulings more consistent (For example, the rulings made in different IP tribunals in Beijing No.1 and No.2 Intermediate Courts were not always consistent previously).
  • This will bring more specialization and expertise. The judges will hear only IP cases and will therefore be specialized in handling IP disputes. The new system also allows for “technical investigators” (not judges or lawyers) in the IP courts. These technical investigators are employees of the court with scientific backgrounds, and their role is to assist the judges on the complicated technical issues, provide judges with professional advice and technical support. Undoubtedly, they will play an important role in patent and software copyright cases.
  • The “Decision on establishment of intellectual property courts in Beijing, Shanghai and Guangzhou” also states that IP courts could have cross-regional jurisdiction on IP cases in the upcoming 3 years. If this is implemented, the IP courts would function more independently, which will help curb the problem of local protectionism during the trial and in relation to the judgments of IP cases.

In light of the above, the establishment of specialized courts is a major step forward in relation to China’s judicial reforms. We still have much to look forward to, for instance the IP court’s jurisdiction to hear IP criminal cases, establishment of specialized IP appellate courts, etc. Also, there are still many problems and challenges for China’s IPR protection. China is still on the US 301 Watch List, and counterfeiting is still rampant. Nonetheless, from the continuous improvement of the IP legal system, we can see the Chinese government’s strong determination as well as its unremitting efforts in strengthening IPR protection, and we expect that the legal environment in China will continue to evolve in the right, positive direction in the next few years. We are after all only 5 years away from 2020, by which time China wishes to be in a position to say that it is a knowledge based economy, and no longer the world’s factory.

Ai-Leen Lim, CEO and Principal Counsel, AWA Asia

New Trademark Act in force in China since 1 May 2014

The intention of this new Act is inter alia to go after trademark infringers and strengthen the position and ensure a fair market for trademark holders. This blog will mainly focus on some of the changes in the application procedure.

Some of the more significant changes are:

  • the introduction of a multiple class application system
  • increased protection for well known marks
  • an increase in statutory damages
  • shortening of the application procedure
  • possibility to protect more types of signs

The possibility to include more than one class in a trademark application is of course a significant improvement compared to the previous single class system. This will most likely lower costs and speed up the application process. Due to the multiple class system the principle of a reexamination notice is reintroduced. The reexamination notice allows the applicant, upon request from the examiner, to describe or amend the application. If obstacles then remain and the application is partially rejected a divisional filing can be made, which will allow an applicant to move forward with a new amended application but with the original filing date intact.

Further, protection for well known marks is strengthened, as it is now possible for a holder of a well known mark to prohibit use of the mark even on dissimilar goods if the use is likely to cause confusion, i.e. ban others from registering their trademark or using similar ones. A trademark can, based on the holder’s request, be defined as well known, when the facts of the relevant case supports such a conclusion. It is no longer allowed to use the phrases “well-known trademark” or “renowned trademark” on goods, packages, in advertising or other commercial activities. This amendment makes the “well-known” criteria open only to them who can actually show that their trademark is well known to the relevant consumers. Bearing in mind that Chinas’ population is well over 1.3 billion people, it could be rather tricky for producers of consumer goods to establish that their mark is well known.

In close connection to the above it is now also regulated in the new act that the use of other’s registered trademarks as trade name is prohibited. There is now also a connection between the trademark act and the unfair competition law, and combined they regulate that the use by a third party of a registered trademark or a well-known unregistered mark as trade name constitutes unfair competition.

In order to raise the stake for intruders the maximum amount of compensation for statutory infringement is raised to RMB 3 million (slightly below USD 500 000) which is six times the previous maximum amount. The burden of trademark holders to provide proof of infringement is mitigated and instead the alleged infringers must now at the court’s request provide documents, such as e.g. account books, to assist the determination of damages. Otherwise, they are facing the risk that the compensation could be determined according to amounts proposed by the trademark holders. This of course indicates that the Chinese authorities are getting increasingly serious in dealing with trademark infringements and they will be more consistent with international practice.

A statutory time limit for examination has been implemented. The Chinese Trademark Office’s (“CTMO”) preliminary examination period of a trademark application is shortened and should now not take longer than 9 months, followed by a possible review (within an additional time frame of 9 months) by the Trademark Review Adjudication Board (“TRAB”) of the CTMO’s rejection of a trademark application. Similar time limits are also in place for oppositions, invalidations and cancellations.

Further, it is now possible to register sound as a trademark, as long as they can be recognizable and distinguish mark owner’s goods from others. An applicant however, must provide a musical sample together with an explanation how the sound mark is used and also describe the sound mark by either a staff or numbered musical notation with literal explanation. The act expressly mentions sounds as an example but this is followed by the Chinese sign equivalent to “etc”, hence, this is not exhaustive and another example mentioned is registration of single colour marks. And just in case anyone should come to think of trying to register certain hymns as sound marks: the list of prohibited signs is expanded with the Chinese “national anthem” and “military song”. In line with the explanation of a sound mark an applicant of a 3-D mark must also explain how the 3-D mark is used inter alia by submit a specimen by which the 3-D shape can be determined, the specimen must contain at least three view drawings of the 3-D mark.

All the above noted changes in the new trademark act is as mentioned done to strengthen the position of trademark owners and speed up and otherwise promote the application process. It remains yet to be seen how the new trademark act will be handled in practice by authorities and courts.

Peter Hermansson, Attorney at Law

How do you protect an interactive GUI?

Have you ever considered protecting a GUI? If yes, did you have problems finding the right form of IP protection? I have.

A GUI may be the swishing windows, the dazzling backgrounds, the bouncing menus and the smart finger moves that convinced you to buy your latest smartphone. More generally, it may be described as an interface between you and your computer which allows the two of you to interact. Most of today’s GUIs are not only animated but also interactive – the appearance changes over time depending on what you do, what happens inside the machine and what data it receives from the Internet.

Some countries/regions allow design protection for GUIs. Static parts of the GUI – those you can’t change with your inputs – are usually accepted, and some authorities, including the OHIM, now allow animated icons. In other words, you’re basically limited to registering isolated screenshots of the action. A screenshot captures the “look” but hardly the “feel” of a GUI, and in my opinion, design protection fails to protect the interactive nature of the GUI.

An alternative, or a complement to design registration, is to try to patent the new aspects of a GUI. A patent serves to protect the functionality of the GUI and may hence be used to protect the dynamical behaviour of the GUI. However, this form of protection requires the functionality of the GUI to be novel (which it usually is) and to involve an inventive step (which, to be honest, it usually doesn’t). While a few pioneering GUI functionalities have been successfully patented in the latest years, the need for inventiveness bars the vast majority of them.

So what should you do with your GUI designer’s latest opus – eye-pleasing, user-friendly, intuitive, even fun, but clearly not an invention? If you’d asked me that question a few weeks ago, I am not sure I would have given you a good answer.

I was pleased to hear, recently, that the State Intellectual Property Office of China (SIPO) is taking a step in the right direction. The SIPO is lifting out its prohibition on design protection for GUIs (even static ones) and introduces, as of May 1st, 2014, protection for dynamic GUIs – animated and interactive alike.

GUI views likely to be registerable under the new guidelines; examples from one of our Chinese agents.

GUI views likely to be registerable under the new guidelines; examples from one of our Chinese agents.

In order to apply for a design protection for a dynamic GUI, the revised Chinese guidelines states that “As far as the design of the product containing a graphic user interface [GUI] is concerned, the view of the design of the whole product shall be submitted. Where the GUI is a dynamic image, an Applicant shall submit at least the aforesaid view of the design of the whole product in one state and may submit only the view of the key frame in other states, provided that the views submitted shall be able to unambiguously determine the changing trend of the animation in the dynamic image” (our translation). In other words, the applicant should submit different views of the dynamic parts of the GUI allowing the changes of the GUI to be followed.

In my view, the revised design protection rules in China may fill at least part of the gap between classical design protection and patent protection for GUIs. This opens new opportunities for stakeholders on the Chinese market. It will be interesting to follow the initial development for this new form of protection, and I sincerely hope other markets will follow China’s example in the near future.

Sofia Åberg, European Patent Attorney

The dark side of the Internet

On Friday the 14 June 2013 we participated in a seminar arranged by the Danish PTO in corporation with the Confederation of Danish Industry on the topic “IP infringements online”.

The seminar aimed at discussing how to protect against infringement of one’s IP-rights on the Internet, and moreover a discussion of counterfeit, its extent and the seriousness about being aware of it. Several interesting speakers gave their view on the different issues under this topic.

The first speaker was David Shore, Director of Global Security EMEA at Pfizer. He gave a very interesting speak on counterfeit in relation to medicines, and the danger and consequences of buying such. He gave several examples from Pfizer, and their strategy in discovering and unraveling of some parts of the major counterfeit business within medicines.

Nikolai Bisgaard from GNResound also shared his experiences as Vice President of IPR & Industry Relations. He described a specific case, where GN Resound discovered that someone was copying one of their products. The case ended with court proceedings in China, and Nikolai Bisgaard explained the many challenges and immense formalities faced by GN Resound in the process of this lawsuit. Moreover he highlighted the importance of registering trademark rights in all countries where these are used, as trademark rights are “easier” to defend, as there is well developed practice within the trademark area in contrast to the unregulated Internet.

Erling Vestergaard, Vice Public Prosecutor, also gave a speak on the criminal fight against IP infringements on the Internet. He explained about the scanty practice within this area in Denmark. He only highlighted copyright cases, as this is the only area within IP where Denmark actually has practice regarding IP infringements on the Internet. He stressed the fact that the Danish legislation is not accommodated to the Internet. According to Mr. Vestergaard our laws have simply not developed in pace with the Internet and the extent of it.

What stood out as a main point from this seminar was that the global reach, openness, versatility and unregulated character of the Internet creates both a great place for marketing and easy access to consumers, but it also creates an obvious place for trademark abuse. In other words, the Internet has a very dark side as well. The non-material damage an infringement can cause a trademark is often much worse than the loss in turnover. Sale of counterfeit goods under a trademark can lead to the dilution of this through a false association of the trademark and goods not originating from the owner of this trademark. Therefore is it crucial to protect these rights.

There were several questions from the attendees. One of the start-up companies asked David Shore and Nikolai Bisgaard as being representatives from established companies, what they would recommend in order to prevent infringements on the Internet. Without any doubt the speakers answered that registered trademark rights formed the best basis to prevent infringements. 

Based on our experience, we fully agree with the reply from the speakers and therefore take this opportunity to stress the importance of having registered trademark rights in all the countries where you intend to use your trademarks. This gives you a right that is recognized, and a right which can be enforced. Moreover, we at Awapatent can assist you in navigating through this complex web of rules, and by forming an online trademark protection strategy. We can assist you in monitoring and surveilling your trademarks through our knowledge and access to specialized online trademark monitoring services.

As something new Awapatent also offers registration and monitoring of trademarks in Trademark Clearinghouse in relation to the new top level domains (TLD). Read more about this service here.

Henriette Vængesgaard Rasch, Attorney at law

Maria Dam Jensen, Associate

Awapatent attended SIPPS 2012 in Shanghai

A couple of weeks ago we participated in the Second Session of Shanghai Intellectual Property Practice Summit. The summit aimed at providing Chinese companies input on how to protect and utilize their IP in the best possible way outside China. It was supported by Shanghai Pudong Intellectual Property Bureau and Shanghai Pudong Science & Technology Association, hosted by Shanghai Pudong Intellectual Property Protection Association and organized by Shanghai Shenxin Law Firm.

There were several very interesting presentations covering different juridistictions all over the world. Our contribution was made by Maria Stenbäck who gave a presentation on European patent prosecution, including the Unitary patent and the Unified patent court .

The conference confirmed our earlier experiences that there is a huge interest in IP matters in China and that all people involved – from companies, universities and the government – are very interested in learning more about all advantages IP protection can bring and how they can use them to their benefit. The Chinese patent law has existed in less than 30 years, but in these quite few years China has come a very long way in providing possibilities to protect intellectual property and to defend intellectual property rights, and further progress is being made at an impressive speed. It is also very fascinating to see how important promotion of inventions are regarded from different parts of the society – from the “Beijing spirit” characterized by the four words patriotism, innovation, inclusiveness and virtue, which can be found around the capital, to the current five year plan.

We are looking forward to our next visit to this interesting region, to continue following the developments in this area.

Maria Stenbäck, European Patent Attorney and Jessica Höeg Hassing, Patent attorney

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Chinese focus on IP

Recently representatives of Awapatent participated in the China Intellectual Property Focus 2012 conference in Shanghai. Our participation is a part of our effort to make Awapatent’s name known in China, but we also believe that it is important to contribute to the growing IP awareness in China. Accordingly, Mikael Bergstrand from our Malmö office gave a speech on how to draft a patent application, which will be successful outside China, and we were also among the conference sponsors. Other speakers focused on how to put patents and trademarks to practical use, so that they are not “just documents hanging on the wall for decoration” as one speaker put it, and shared their IP litigation experiences. It may safely be concluded that there is a great interest in expanding the protection of Chinese innovation to other countries and in becoming better at making innovations profitable by licensing and selling IP rigths. 

Sign above the entrance to Beijing's Silk Market

The increased focus on IP in China is reflected in many ways. During this trip, which started in Beijing, the most surprising example was the banner shown on the photo. It was hanging at the entrance to the Silk Market, which is notoriously known as one of the places, where you may come across surprisingly cheap “Rolex” watches or maybe even an iPhone6. Though some vendors had apparently entered via another entrance and not seen the banner, it is clear that the IP situation in China is improving rapidly, not least due to a push from Chinese companies beginning to realize the importance of being able to protect their own innovations.

Future trips to China will most certainly reveal many other thought-provoking displays of IP awareness and we will make sure to share them with you!

Vibeke Warberg Rohde, European Patent Attorney

Counterfeit Goods in the EU – Troubling News but No Surprise

On July 24, the European Commission published a press release concerning its report on seizure of counterfeit goods during 2011 in the EU (see the full report).

It turns out that seizure of suspected counterfeit goods increased some 15 % compared to 2010. Top categories are medicines (24 %), packaging material (21 %) and cigarettes (18 %). China continues to be the main source of origin for these goods (73 %). It is also important to note that out of all detained postal packages, a worrying 36 % concerned medicines.

Sadly, the press release is no surprise. The problem of counterfeit goods is not new and we know it is increasing. The true number of counterfeit goods entering the EU, however, must be many times higher than what the customs authorities manage to seize. This in itself is troubling. More worrying is that medicines is at the top of these seizures, as fake medicines may actually harm people severely. In addition to personal health, fake goods may affect consumer loyalty and severely damage the reputation built up by the brand owner. All in all, the constant and evidently growing influx of counterfeit goods into the EU is a serious problem.

The only positive note is that over 90 % of all the goods seized were either destroyed or brought to court, which indicates that the work of the customs authorities is fruitful. It also shows the importance of filing customs applications to give the customs authorities the best possible information to detect suspected counterfeit goods.

To combat the negative trend of counterfeit goods, right holders need to take an active part in aiding customs authorities to detect counterfeit goods by lodging customs applications to a greater extent than today. Besides this, the EU may wish to establish specialized courts and a speedier and less costly procedural framework for court cases concerning seized goods. Finally, a reverse burden of proof concerning the authenticity of the goods may have a positive impact as well.

Most of all, however, we as consumers must make a stand. Rejecting counterfeit goods, if we can tell they are, will be the greatest weapon against counterfeiting.

Mattias Karlsson, Attorney at Law

The Danish Supreme Court fights back

On 30 May 2012 the Danish Supreme Court pronounced an interesting judgment in a case concerning imitation of shoes and awarded New Balance a larger compensation than what is normally awarded in such cases. The judgment is an affirmation of the Maritime and Commercial Court’s judgment from 2010. The judgment is a clear signal that Danish Courts – under the right circumstances – are willing to award economic compensation of a not inconsiderable amount.

According to the judgment, the clothing company Bestseller has imitated two different shoe models which were formerly marketed by New Balance. At an earlier stage, New Balance had tried to obtain a trademark registration of their sole and shoe toe, but both the Danish PTO and OHIM rejected these applications. Therefore, it is not a question about a trademark infringement of a sole and a shoe toe. On the contrary, it is a question about an infringement of New Balance’s trademark CHEVRON and PF FLYERS and about slavish imitation of the shoes according to the rules of the Danish  Marketing Law.

In the present matter, New Balance has stated that one of their shoes is a re-design of one of their previous models and that the other shoe is a modern version of a classic shoe. They have argued that the shoes have a history and that among other things it is a question of well-considered details, well-defined proportions and elegant appearance as well as a deliberate and characteristic choice of material. According to the Court those exact conditions are decisive for their conclusion that New Balance’s shoes are characteristic and they also express an independent creativeness to such an extent that they are protected against counterfeit according to the Marketing Law §1. As a matter of fact, the Court finds that Bestseller’s shoes are slavish imitations of New Balance’s shoes, in spite of the fact that a few details on one of the imitated shoes are not identical with, but have a strong resemblance to, the original.

The Court finds it proved that Bestseller have produced their shoes with New Balance’s shoes as models and that Bestseller have had the intention to seize upon the design of the original shoes and to bring counterfeit shoes to the market. In addition, the Court points out that Bestseller, with their knowledge of the market, including the trend-setting designs, is the closest to bear the risk that it is a question of an imitation. Thus, the Court states that the fact that the shoes are being produced in China by a sub-contractor does not exempt a company from responsibility, when the product is sold in Denmark.

After a general assessment the Danish Maritime and Commercial Court set the compensation and remuneration to 2.5 million Danish Kroner. To this must be added the costs at around 203,000 Danish Kroner. The Supreme Court affirmed this judgment with an additional payment of 256,000 Danish Kroner in costs. In total, the compensation, remuneration and costs amount to around 3 million Danish Kroner. This is a quite larger compensation than what has typically been given in previous cases.

My opinion is that the amount of the compensation is closely related to the specific existing circumstances, namely especially the obvious intention and that it was a question about a completely slavish imitation of the two models of re-designed, trend-setting shoes as well as an infringement both according to the Trademark Law as well as the Marketing Law. I am pleased to see that the Danish Maritime and Commercial Court and the Supreme Court in this case have sent a strong signal by awarding a large economic compensation. 

Henriette V Rasch, Attorney at Law

Awapatent at the 4th China IP Counsel Conference 2012

On 22-23 May 2012 representatives from Awapatent participated in the 4th China IP Counsel Conference held in Shanghai. The program was very interesting with many different angles on IP, particularly on how to protect your IP in the best possible way.

A representative from the Chinese Intellectual Property Office (SIPO) opened with a speech about the Patent Prosecution Highway (PPH), a topic which raised many questions from the audience. Then it was time for our contribution: Maria Stenbäck explaining how to draft a patent application, which at the same time meets the requirements set by patent authorities in the USA, Europe and China but without becoming too expensive. Not an easy task!

The following break showed that the Chinese are very interested in hearing news from other areas of the IP world and the networking area was very busy.

Chinese speakers from large companies and research institutes then presented topics varying from how to protect your trade secrets to examples of how IP strategies can be used to improve business. It was obvious that a lot is happening in the Chinese IP community.

During the final panel discussion we noted that the frustration sometimes felt by European companies trying to enforce IP rights in China is shared by Chinese companies, but that they experience that things are changing for the better.

Indeed a very exciting visit to China and we hope to be able to participate in future conferences here in Shanghai. 

Maria Stenbäck from Awapatent speaking at the 4th China IP Counsel Conference in Shanghai.

Vibeke Warberg Rohde, European Patent Attorney
Maria Stenbäck, European Patent Attorney
Claus Marcussen, Attorney at Law