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K ING & W OOD. PRC IP & Development Trends Gabriella Liu IP Department King & Wood PRC Lawyers

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Presentation on theme: "K ING & W OOD. PRC IP & Development Trends Gabriella Liu IP Department King & Wood PRC Lawyers"— Presentation transcript:

1 K ING & W OOD

2 PRC IP & Development Trends Gabriella Liu IP Department King & Wood PRC Lawyers

3 K ING & W OOD 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

4 K ING & W OOD PART I IP Registration in China - Procedures, Time Frame & Costs

5 K ING & W OOD 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 KING & WOOD PRC LAWYERS

6 K ING & W OOD 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

7 K ING & W OOD Chinese Trademark Statistics

8 K ING & W OOD 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: RMB (US$ ) KING & WOOD PRC LAWYERS

9 K ING & W OOD 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 years10 years Examination Substantial Review Formality Review Formality Review

10 K ING & W OOD Patent Authority: State Intellectual Property Office (SIPO) Invention: 3 – 4 years Utility Model: 12 months Design: 10 months KING & WOOD PRC LAWYERS

11 K ING & W OOD Chinese Patent applications Statistics

12 K ING & W OOD Top Ten Foreign Corporations in 2005 No. CountryIn the name of 1 KR Samsung Electronics JP Panasonic NL Phillips JP Sony KR LG LG Electronics US IBM JP Toshiba JP Seiko Epson KR SDI Samsung SDI JP Canon 940

13 K ING & W OOD Top Ten Countries in 2005 NO.STATESNUMBER 1Japan US Korea9300 4Germany7502 5The Netherlands3988 6France3190 7Swiss2106 8Italy1632 9UK Sweden1101

14 K ING & W OOD PART II Protection of Non-registrable IP

15 K ING & W OOD 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; KING & WOOD PRC LAWYERS

16 K ING & W OOD 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. KING & WOOD PRC LAWYERS

17 K ING & W OOD 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 KING & WOOD PRC LAWYERS

18 K ING & W OOD 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; KING & WOOD PRC LAWYERS

19 K ING & W OOD 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

20 K ING & W OOD 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. KING & WOOD PRC LAWYERS

21 K ING & W OOD PART III Dual IP Enforcement System - Procedures, Remedies and Practical Choices

22 K ING & W OOD Administrative Enforcement Authorities State Administration for Industry and Commerce (AIC) - tr ademark, 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

23 K ING & W OOD 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

24 K ING & W OOD 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)

25 K ING & W OOD 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

26 K ING & W OOD 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.

27 K ING & W OOD 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

28 K ING & W OOD 2005 Administrative Enforcement Trademark

29 K ING & W OOD 2005 Administrative Enforcement Copyright

30 K ING & W OOD 2005 Administrative Enforcement Patent

31 K ING & W OOD 2005 CUSTOMS Protection

32 K ING & W OOD Supreme Peoples Court Higher Peoples Courts Municipalities directly under the Central Government Provinces, autonomous regions Intermediate Peoples Courts Municipalities directly under the Central Government Provinces, autonomous regions Maritime courts Railway transport courts Basic Peoples Court PRC Court System

33 K ING & W OOD Judicial Protection of IP - Civil Not encouraged previously, more encouraged after Chinas 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

34 K ING & W OOD 2005 Court new cases- Civil

35 K ING & W OOD 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 KING & WOOD PRC LAWYERS

36 K ING & W OOD 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) KING & WOOD PRC LAWYERS

37 K ING & W OOD PART IV New Developments & Trends – Legislation, Enforcement & Judicial Protection

38 K ING & W OOD 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 Courts interpretation on music TV Anti-unfair Competition Law: proposed Supreme Courts interpretation on conflicts of prior rights, etc.. Proposed legislation of Anti-Monopoly Law KING & WOOD PRC LAWYERS

39 K ING & W OOD IP Administrative Enforcement Chinese Governments 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. KING & WOOD PRC LAWYERS

40 K ING & W OOD IP Judicial Protection Chinese Governments 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 Courts trial system or methods are observed – Order of Investigation (Diao Cha Ling), unified IP tribunal for administrative, civil and criminal cases. More….. KING & WOOD PRC LAWYERS

41 K ING & W OOD THANK YOU! ! Gabriella G. Liu King & Wood PRC Lawyers Phone: (1 ) (US) (86) (Beijing) KING & WOOD PRC LAWYERS


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