2 PRC IP & Development Trends Gabriella LiuIP DepartmentKing & Wood PRC Lawyers
3 PRC IP & Development Trends PART I : IP Registration in ChinaPART II : Protection of Non-Registrable IPPART III: Dual IP Enforcement SystemPART IV : New Development in IP Legislation& Practice
4 PART IIP Registration in China- Procedures, Time Frame & Costs
5 Trademark KING & WOOD PRC LAWYERS Authority: the Trademark Office (“TMO”)PRC adopts “first come, first file” principle, but protects prior rightsFollows Nice Classification English EditionDivides International Classifications into Sub-classesPermits Co-existence in different Sub-classes
6 Trademark KING & WOOD PRC LAWYERS Filing through PRC subsidiaries or agents (a signed POA in favor of agent required)Application process: 30 months (recently)Registration Term: 10 yearsOfficial filing fee: RMB1,000 (US$125)Opposition, cancellation, judicial review available
8 Copyright & Software KING & WOOD PRC LAWYERS Authority: National Copyright Bureau (“NCA”)Voluntary registrationBona fide evidence, unless reasonably challengedOfficial Registration Process:Copyright: 1 month; Software: 2 monthsBasic Official Charges: RMB (US$ )
9 Patent Patent for Invention (Patent) Utility Model Design Subject MatterAny new technical solution relating to a product, a process, or improvement thereofAny new technical solution relating shape, structure or combination of a productNew design of shape, pattern or their combination, or combination of color , shape or pattern of a productPatent Term20 years10 yearsExaminationSubstantial ReviewFormalityReviewFormality Review
10 Patent Authority: State Intellectual Property Office (“SIPO”) KING & WOODPRC LAWYERSPatentAuthority: State Intellectual Property Office (“SIPO”)Invention: 3 – 4 yearsUtility Model: 12 monthsDesign: 10 months
12 Top Ten Foreign Corporations in 2005 No.CountryIn the name of1KR三星电子株式会社Samsung Electronics35082JP松下电器产业株式会社Panasonic30423NL皇家飞利浦电子股份有限公司Phillips27094索尼株式会社Sony16525LG电子株式会社LG Electronics14246US国际商业机器公司IBM12137株式会社东芝Toshiba11778精工爱普生株式会社Seiko Epson11199三星SDI株式会社Samsung SDI105210佳能株式会社Canon940
13 Top Ten Countries in 2005 NO. STATES NUMBER 1 Japan 36221 2 US 20395 3 Korea93004Germany75025The Netherlands39886France31907Swiss21068Italy16329UK161310Sweden1101
15 Trade Secrets & Know-how KING & WOODPRC LAWYERSTrade 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;
16 Trade Secrets & Know-how KING & WOODPRC LAWYERSTrade 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.
17 Import & Export of Technology KING & WOODPRC LAWYERSImport & Export of Technology3 Categories: Freely Tradable, Restricted or Forbidden TechnologiesRecordals 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
18 Import & Export of Technology KING & WOODPRC LAWYERSImport & Export of TechnologyIllegally Monopolizes Technology & Impedes Technological ProgressRestricting 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;
19 Import & Export of Technology KING & WOODPRC LAWYERSImport & Export of TechnologyIllegally Monopolizes Technology & Impedes Technological Progress2. Restricting one of the parties from acquiring from another source technology similar to, or competing with, that of the technology provider;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;
20 Import & Export of Technology KING & WOODPRC LAWYERSImport & Export of TechnologyIllegally Monopolizes Technology & Impedes Technological Progress4. 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; or6. 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.
21 PART III Dual IP Enforcement System - Procedures, Remedies and Practical Choices
22 Administrative Enforcement Authorities State Administration for Industry and Commerce (AIC) - trademark, trade name, trade dress, advertising, market supervisionState Intellectual Property Office (SIPO)– patentGeneral Administration for Quality Inspection, Quarantine & Supervision Bureau (TSB) – labeling, product qualityNational Copyright Administration (NCA)– copyright & publication
23 Administrative Enforcement Authorities General Administration of Customs – anti-counterfeiting , anti-piracy, patent infringementMinistry of Culture – anti-piracy, anti-piracy of online music, TV, film and sound recordingsMinistry of Public Security – anti-counterfeiting & piracy, investigation of IP crimes
24 Administrative Enforcement Authorities Procedure & DocumentsWritten complaint stating rights and infringing factsProof 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 Administrative Enforcement Authorities RelievesOn-site inspection & inquiryConfiscation or seal of infringing goods, tools, book-keepingsOrder to stop infringementFines (several times of illegal turnover; TM cases: up to 3 times of illegal turnover or RMB100,000 (US$12,500)Destruction of infringing goodsTransfer of serious cases to Police for criminal investigation
26 Administrative Enforcement Authorities ProsQuick, simple & relatively cost-effective solutionMore 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 Administrative Enforcement Authorities ConsDifferent enforcement levels at different levels of authoritiesCertain local protectionism unavoidableNo Compensation available (unless mediated or settled)Weak for copyright and patent enforcement
32 PRC Court System Supreme People’s Court Higher People’s Courts Municipalities directly under the Central GovernmentProvinces, autonomous regionsIntermediate People’s CourtsMunicipalities directly under the Central GovernmentProvinces, autonomous regionsMaritime courtsRailway transport courtsBasic People’s Court
33 Judicial Protection of IP - Civil KING & WOODPRC LAWYERSJudicial Protection of IP - CivilNot encouraged previously, more encouraged after China’s WTOStronger deterrent effect than administrative enforcementPreliminary Injunction, evidence or assets preservation availableRemediesOrder to stop infringementOrder to eliminate infringement effects/influencesCompensation of damages and legal costs
35 Judicial Protection of IP - Criminal KING & WOODPRC LAWYERSJudicial Protection of IP - CriminalStrongest deterrent effect in anti-counterfeiting/piracy, trade secrets infringementsCurrently most desired and pushed by foreign right holders in ChinaEmerging legal culture of Chinese and Chinese governments on pursuing IP infringers’ criminal liabilities7 IP Crimes with new more operable criteria
36 2005 Court Cases – Criminal KING & WOOD PRC LAWYERS Criminal liabilities pursued in 505 cases and to 741 persons3567 new casesCertain difficulties in establishing criminal casesTransfer of administrative IP cases to PSB (Police)
37 PART IV New Developments & Trends – Legislation, Enforcement & Judicial Protection
38 IP Legislation KING & WOOD PRC LAWYERS Proposed to further amend Trademark LawProposed to amend Patent LawCopyright: new administrative rules and potential joining of international treaties on Internet copyright; proposed Supreme Court’s interpretation on music TVAnti-unfair Competition Law: proposed Supreme Court’s interpretation on conflicts of prior rights, etc..Proposed legislation of Anti-Monopoly Law
39 IP Administrative Enforcement KING & WOODPRC LAWYERSIP Administrative EnforcementChinese 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 eventsCertain 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.
40 IP Judicial Protection KING & WOODPRC LAWYERSIP Judicial ProtectionChinese 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…..
41 KING & WOODPRC LAWYERSTHANK YOU! 谢谢! Gabriella G. Liu King & Wood PRC Lawyers Phone: (1 ) (US) (86) (Beijing)