When goods are manufactured in China by an original equipment manufacturer factory for export, the foreign buyer is not always the owner in China of the trademark that is affixed on the goods. But what if the trademark is registered in the name of a third party and such third party decides to sue the factory for infringement and stop the export of the goods? This is a long-debated question of which the courts have demonstrated different understandings.
A recent Supreme People's Court (SPC) decision clarified the requirements to cite the prior use defence under Article 59.3 of the Trademark Law. In this regard, the court stated that the only person eligible to cite this defence is the prior user themselves and that such use must have occurred prior to the registration application and the trademark owner's use of the registered trademark. Further, for the first time, the SPC made it clear that geographical scope is a key element in defining the original scope of use.
In China, the practice of defensive trademarks appears to be a guiding factor when determining the legitimacy of a trademark application, but said trademarks remain subject to cancellation in case of non-use. The main challenge is the bad-faith strategy of applying to register many different trademarks without the aim of using them. In this respect, the recent revision of the Trademark Law gives hope that such a highly prejudicial phenomenon will be progressively eradicated.
The Trademark Review and Adjudication Board (TRAB) has released analysis of its decisions that were challenged before the courts in 2018. In addition to this analysis, the TRAB has provided comments on the admissibility of evidence in cancellation cases based on non-use for three consecutive years. This article provides an in-depth overview of the TRAB's findings.
The Beijing High Court recently published an extensive set of guidelines on administrative trademark cases, which are divided into two parts: procedural issues and substantive matters. Although the guidelines clarify a number of matters (eg, the possibility of bringing an action against a ruling of the National Intellectual Property Administration when such ruling was remade in accordance with an effective court judgment), they contain a number of unpleasant surprises.
In 2019 the Trademark Law was rapidly revised without public consultation. This revision, which was relatively limited, aimed to address the problem caused by trademark applications made in bad faith and without the intention to use and to increase the powers of the courts in judicial enforcement. This article analyses what remains to be done and what a fifth revision of the Trademark Law should cover.
The revision of the Anti-unfair Competition Law is part of the new effort to enhance the protection of intellectual property in China. It also reflects the ongoing negotiations between China and the United States on various topics, including IP protection. The revisions provide (among other things) a wider definition of a 'trade secret' and introduce the concept of punitive damages and the inversion of the burden of proof.
In 2018 the China Trademark Office launched a consultation for the fourth revision of the Trademark Law, which will enter into force in November 2019. The revision focuses on two important issues: the proliferation of trademarks, which was one of the main issues on which comments were submitted, and enforcement actions against infringers, which are considered insufficiently deterrent. As the new law was promulgated in such a hurry, further explanation and information on how it will be implemented is necessary.
The State Council recently amended the Regulations on the Administration of Technology Import and Export. The previous regulations, which had been in force since 2002, contained provisions pertaining to patented technologies and technological secrets which directly contradicted the Contract Law 1999. As such, they had been the subject of numerous complaints from the foreign business community.
In October 2018 the National People's Congress decided that all appeals of lower-court judgments rendered in cases with a technical aspect should be submitted to the Supreme People's Court (SPC). Following this decision, the SPC created a detached tribunal known as the SPC IP Court. It also promulgated the Provisions on Several Issues concerning the SPC IP Court, which set out how the new court will function and its jurisdiction.
In 2017 the Beijing IP Court rendered a groundbreaking decision by awarding the owner of an unregistered well-known trademark Rmb3 million in damages for infringement. According to the Trademark Law (2013 version), the owner of an unregistered trademark can prevent a third party from registering or using an identical or similar trademark on the same or similar goods. However, the law is silent as to whether the owner of such a mark can seek damages from third-party users.
The Supreme People's Court recently held a public hearing on the retrial of the administrative litigation concerning the refusal of Parfums Christian Dior's international 3D trademark application. The case was far from simple and raised several procedural issues, including with regard to the definition and publication of an application's subject matter, the consistency of examination criteria and the treatment of solely 3D marks.
The Trademark Review and Adjudication Board (TRAB) recently released an analysis of its decisions which were overruled by the courts in 2017, in which it observed that the ratio of court decisions rendered against its own adjudications in the first instance and on appeal has increased each year. In addition to these statistics, the TRAB provided a commentary on issues such as admitting new evidence in court proceedings, changes of circumstances and trademark coexistence agreements.
Requesting Customs to seize export products on grounds of patent infringement can be a potent legal tool against exporters. If the products involved are subsequently detained by the court and found to be infringing, they will be destroyed. However, it is difficult for patentees to organise customs seizures of exported patent-infringing products. If the other party files a counterclaim, the patentee may end up shooting itself in the foot.
Too many trademarks are filed in China for the purpose of trading them as a commodity for profit. These marks are not filed for the purpose of functioning as a source indicator of goods or services, which leads to frequent procedures before the Trademark Review and Adjudication Board. The courts should scrutinise evidence of use more closely if it is suspected to have been forged by a trademark registrant. The level of scrutiny demonstrated by the Beijing High Court in a recent case is therefore most welcome.
The Paris Convention forms the cornerstone of China's legislative framework on the protection of commercial signs. This framework also comprises the new Anti-unfair Competition Law, which took effect in January 2018, and the Trademark Law, among others. This article analyses Article 59(3) of the Trademark Law and, by way of a comparison with the corresponding provisions of the new Anti-unfair Competition Law, examines how the new law will redefine the legal landscape for protecting commercial signs.
The new Anti-unfair Competition Law took effect in January 2018. As regards damages awards, Article 17 of the new law essentially follows the same calculation principles set out in the Trademark Law. Unfortunately, the new Anti-unfair Competition Law does not include the other modes of calculation provided for in the Trademark Law. In addition, the remedies granted by the Trademark Law and the Anti-unfair Competition Law with regard to unregistered trademarks are different.
The new Anti-unfair Competition Law took effect in January 2018. Although substantial changes were made concerning important issues such as the theft of trade secrets, as regards the principles set out in Article 10bis of the Paris Convention, most of the main concepts and principles of the original 1993 text were maintained. Article 9 of the 1993 law is one such article which remains largely unchanged, although some matters have been clarified, including with regard to misleading commercial publicity.
Article 6(1)(4) of the new Anti-unfair Competition Law prohibits a party from performing "other confusion acts that may mislead consumers to believe that its products are those of another person, or induce a special relationship with another person". This is a convenient fallback provision for IP rights holders which need protection in circumstances other than those explicitly listed in Article 6 of the law.
Article 6(1)(3) of the new Anti-unfair Competition law prohibits the unauthorised use of a website name, webpage or the main parts of a domain name with a certain level of influence. By way of an analysis of this provision from the perspective of Article 10bis of the Paris Convention and a comparison with the corresponding provisions of the Trademark Law, it is possible to examine how it will redefine the legal landscape for protecting commercial signs in China.
The legislature had been planning the recent amendments to the Anti-unfair Competition Law since China's accession to the World Trade Organisation. During the four drafts that followed, substantial changes were made concerning important issues such as conflict between company names, which may lead to confusion with regard to business entities.
The legislature recently made a number of amendments to the Anti-unfair Competition Law, which it had been planning since China's accession to the World Trade Organisation. One topic of discussion during the law's revision concerned the list of signs that cannot be copied, as requests were made to add a product's shape to this list. Further, the use of the word 'famous' with regard to trademarks came under intense debate during the revision process.
The legislature had been planning the recent amendments to the Anti-unfair Competition Law since China's accession to the World Trade Organisation. Although most of the main concepts and principles of the original 1993 text have been maintained, during the act's revision, Article 6 – which concerns misleading consumers and acts of confusion – was one of the most discussed provisions.
The legislature had been planning the recent amendments to the Anti-unfair Competition Law since China's accession to the World Trade Organisation. During the four drafts that followed, substantial changes were made concerning important issues such as the theft of trade secrets. However, as regards the principles set out in Article 10bis of the Paris Convention, most of the main concepts and principles of the original 1993 text have been maintained.
After four drafts, the revised Anti-unfair Competition Law 1993 has finally entered into force. Although the new law essentially maintains the concepts and principles of the original text, a number of changes have been introduced. The most significant change with regard to intellectual property is arguably the introduction in Article 6 of the expression 'a certain influence', which applies to signs and replaces the terms 'known' or 'well-known', which applied to products.
Sources indicate that the Beijing High Court recently released the Provisions on the Adjustment of the Courts' Jurisdiction over Civil IP Cases in Beijing. The new provisions outline the jurisdiction of the Beijing High Court, the Beijing IP Court and the lower-level Beijing courts and abolish the Provisions on the Jurisdiction over First-Instance Civil IP Disputes Heard by People's Courts at Various Levels in Beijing 2008.
The Supreme People's Court recently reversed a Guangdong High Court judgment and held that the trademark and packaging used on a product may constitute separate IP rights. The case serves as a reminder that where products are sold by a licensee in packaging which differs from that of the licensor, the licensee can claim independent IP rights. The licence agreement should therefore provide that on termination any packaging rights will remain attached to the trademark.
The Supreme People's Court recently adopted the Provisions on Several Issues Concerning the Hearing of Administrative Cases Involving the Granting and Affirmation of Trademark Rights, which became effective in March 2017. These long-awaited provisions concern the revised Trademark Law, which opens up new horizons and settles old divergences.
The Judicial Committee of the Supreme People's Court recently adopted final draft trademark provisions following a consultation process. The provisions introduce useful guidance for the Beijing IP Court (first instance) and the Beijing High Court (second instance) in relation to appeals filed against decisions of the Trademark Review and Adjudication Board.
In 2016 the State Administration for Industry and Commerce published its Opinion on Pushing Forward the Reform to Facilitate Trademark Registration Procedure, making such reform its priority for 2016 and 2017. The opinion is intended to broaden the scope of external trademark examinations and addresses outsourcing, the application procedure, registration certificates, the online and sole-examiner systems, information availability and classification.
China's quality watchdog, the General Administration of Quality Supervision, Inspection and Quarantine, has promulgated its long-awaited Measures on the Protection of Foreign Geographical Indications Products. The new measures stipulate rules for the application, examination, approval, supervision and opposition of registrations, and were inspired by the precedent opinions on domestic geographical indication registrations.
The Supreme People's Court recently published its opinion on how to promote the 'three-in-one' system for civil, administrative and criminal cases involving IP rights in courts nationwide. The development of the three-in-one system is a positive and welcome step. However, the development of the basic people's court having first-instance jurisdiction over ordinary IP rights cases will have significant consequences that are worth examining.
The IP Rights Tribunal recently upheld its first-instance ruling in a decision over the manufacture and sale of counterfeit packaging for food seasoning. Highlighting the advantages of China's new three-in-one IP practice, the tribunal defined the boundary between 'counterfeiting registered trademarks' and 'selling illegally manufactured representations of registered trademarks' and identified the circumstances for complicity.
A recent trademark infringement case demonstrates that evidence of establishment and prior use of a business and trade name is sufficient against claims of similarity. This case analyses and clarifies the period and range of prior use, as well as the term 'certain influence', and serves as a point of reference for similar cases.
In an ongoing infringement and unfair competition dispute regarding the computer games World of Warcraft and Warcraft of the State, the Guangzhou IP Court recently granted an injunction to be enforced until the date on which the final judgment takes effect. The injunction prevents the operation and distribution of the defendants' computer game on the grounds that it would reduce market shares and harm the plaintiffs' business reputation.
The Beijing High People's Court recently upheld a decision to prohibit further production or distribution of a television series that was found to constitute copyright infringement. The decision highlights the purpose of the Copyright Law to protect original works and the judiciary's policy to enhance IP protection, after the court explained the methodology for finding 'material similarity' between literary works and instructed on differentiating an idea from an expression.
The Supreme People's Court recently determined that the naming of apartment blocks as 'Star River Garden' constituted infringement due to a likelihood of confusion. The court did not order a complete prohibition against use of 'Star River Garden', but ruled that buildings yet to be developed and sold must not use the name. The verdict protected the trademark owner's interests to the extent allowed by the law, while minimising the harm against the public interest.
The Shanghai High People's Court recently upheld a first-instance judgment dismissing an appeal to invalidate a conflicting exclusive trademark licence, despite finding that the defendant was not a third-party licensee acting in good faith. The court found insufficient evidence of conspiracy or intent to damage the claimant's interests and upheld the contractual right of both parties to use the disputed trademark.
The Beijing IP Court recently established an internal Speedy Trial Panel for administrative litigation cases concerning the review of trademark application refusals. Trademark applicants can now apply to the court for a summary procedure, which will halve their legal fees and allow them to adduce evidence at the court hearing. This procedure will greatly improve the court's trial efficiency, allow judges to gain a full understanding of a case's background and be more convenient for involved parties.
The Shanghai High People's Court recently issued a new regulation introducing some noteworthy changes regarding jurisdiction over civil IP cases in Shanghai. Under the new regulation, some high-level patent cases must bypass the first-instance jurisdiction of the IP courts and be heard directly by the high court. However, questions have arisen over whether this exception is compatible with the Supreme People's Court provisions on the IP courts' jurisdiction.
The State Administration for Industry and Commerce's Interim Measures for the Administration of the List of Businesses Seriously Violating the Law and Becoming Discredited recently took effect. Of the 10 circumstances listed in the interim measures in which a business can be deemed to have seriously violated the law, three pertain to trademark and unfair competition law. Blacklisted businesses will be a target for supervision and administration and will incur various penalties.
In March 2016 the State Council Legislative Affairs Office released a second draft of the revised Anti-unfair Competition Law, which brings welcome changes for rights holders. The revised law amends the IP infringement acts that constitute unfair competition, including use of another party's 'business identifier' and trademark and trade secret infringement. The revised law also significantly increases the level of fine that can be awarded to infringing parties.
In April 2016 the Beijing High People's Court published the Guidelines for the Adjudication of Network-Related IP Cases in a bid to address various issues arising from the adjudication of network-related copyright, trademark and unfair competition cases. While the guidelines are useful for rights holders dealing with a small number of infringement cases, they are less effective for dealing with the high number of cases faced by most Chinese rights holders.
The Jiangsu High Court has issued a significant decision in an original equipment manufacturer (OEM) export case, overturning the non-infringement judgment of the Changshu Intermediate Court and finding that the OEM manufacturer's activities constituted trademark infringement. According to the court, whether OEM export constitutes trademark infringement should be decided on a case-by-case basis.
According to the 'inclusive development' theory, when two similar trademarks have coexisted for some time and are both successful, they should continue to coexist, regardless of whether the first trademark owner agrees. The Supreme People's Court has developed this theory through two of its guiding opinions; however, a recent retrial judgment by the court seems to suggest a change in practice.
The Supreme People's Court recently rendered a judgment which ended the four-year legal battle over the PRETUL trademark. The case centred on a trademark infringement suit brought against an original equipment manufacturer for exported products. However, the court's decision raises many questions. Was it a strategic choice, aiming to boost Chinese exports by any means necessary – even at the cost of trademark protection?
The State Council has launched the Action Plan for the Further Implementation of the National Intellectual Property Strategy for the period from 2014 to 2020. In particular, by 2020 the government intends to reach a "relative high standard for innovation, utilisation, protection and management of intellectual property rights".
The newly amended Trademark Law and its implementing regulations recently entered into force. The implementing regulations provide welcome clarifications of the Trademark Law's new provisions on substantial, procedural, administrative and enforcement matters. However, certain ambiguities and discrepancies remain.
A Shanghai court has found that the mark MYBELIVE, which was registered in Class 3 for cleaning products, became an infringement of L'Oréal's registered trademark MAYBELLINE when used for cosmetics. The court also found that use of the name 'Mei Bao Lian Cosmetic Company' constituted free riding on L'Oréal's market reputation.
The Supreme Court recently rejected an application for retrial filed by Castel Frères SAS in a trademark non-use dispute. Its ruling redefined the concept of 'legitimacy' in trademark use and reversed a previous decision on the same issue in another case published in 2008.
The Shanghai Number 2 Intermediate People's Court recently held that an article imitating the famous Michelin restaurant guides, with a description and rating of French restaurants in Shanghai, constituted a violation of trademark rights, despite the fact that it was presented as a parody. The finding could have significant implications for other foreign brands in China.
A dispute between Nestlé and Master Sauce, over the use of a square-based sauce bottle resembling Nestlé's registered trademark, will alert all trademark owners to the possible limitations that the courts may impose on the protection granted by the Trademark Law.
If a product has lost its design patent protection, but is widely recognised by the relevant public in China as a result of its distinctive design, a recent Supreme Court opinion will make it easier to seek protection under the Unfair Competition Law. The court virtually treated the configuration of the allegedly infringed product as an unregistered three-dimensional trademark.
Tyre manufacturer Michelin has been established in China since the 1980s and the brand's success has attracted numerous imitators. The company filed suit against an individual who was using the same Chinese characters as Michelin and a similar transliteration on sound equipment. The case demonstrates the benefit of obtaining recognition of a mark's well-known status.
The State Administration for Industry and Commerce has approved and released the Management Measures of Trademark Agencies. The measures, which are already in effect, make a particularly significant change to the 2009 measures: law firms can now act as trademark agents.
Since China's accession to the World Trade Organisation in 2001, local courts have experienced an increase in IP rights lawsuits before the civil courts. The number of foreign-related IP lawsuits also increased, although these account for an ever-declining proportion of the total number of cases.