Real Case Study: Optimizing Your IP Strategy. Elizabeth Wong DLA PIPER

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1 Real Case Study: Optimizing Your IP Strategy Elizabeth Wong DLA PIPER

2 Agenda Overview of intellectual property (IP) rights in China Trade Marks, Patents and Copyright Practical strategies to protect IP rights in China Defensive v.s. Aggressive Lessons learnt Q&A

3 Overview of Intellectual Property Rights in China

4 Trade Marks What is a registrable trade mark? Any visual sign capable of distinguishing the goods/ services of one undertaking from those of others Any word, device, design, alphabet letter, numeral, threedimensional symbol, combination of colours and any combination thereof "First-to-file" Rule Nice Classification of Goods and Services (the 9th edition) The Chinese Goods and Services Classification Manual China is a member of the Paris Convention Priority claim available - Be sure to file within 6 months from the filing date of an earlier-filed foreign application Registered owner has the exclusive rights to use, assign and license the mark in China in respect of the goods/ services for which the mark is registered

5 Patents Patents: Invention patents - any new technical solution relating to a product, a process or improvement Utility model - any new technical solution relating to the shape, the structure, or their combination, of a product, which is fit for practical use Design - any new design relating to the shape, the pattern or their combination, or the combination of the colour with shape or pattern, of a product, which is fit for industrial application Invention patents are subject to substantive examination Utility models and designs may be registered based on formalities examination only Computer programs and software are generally not patentable, but may be protected under the "Regulations on Protection of Computers Software"

6 Copyright China is a signatory to the Berne Convention Copyright is an automatic right, registration is voluntary in China Protectable works include literary, dramatic, artistic and musical works, films and sound recordings and computer programs China confers copyright protection to works created by foreigners whose work is first published in China or in a Convention Country or a country with which China has mutual arrangement Difficult to establish first publication of a work Copyright registration certificate - prima facie evidence of ownership and validity of copyright

7 Practical Strategies to Protect IP rights in China

8 Register your Trade Mark Apply for early "First-to-file" rule Cover possible variations of the mark Advisable for companies which only manufacture in China for export to also obtain registration for their mark Conduct trade mark clearance search To ascertain any marks identical/ similar to your mark already registered in the relevant classes? To give a heads up on potential barriers to registration

9 Devise and Register a Chinese version of Your Mark Consumers in China have little grasp of English/ other foreign languages Important to control the way consumers relate to your brand in Chinese Devise and register a Chinese-language mark in addition to registering your foreign language mark - Coined by the company Coined by the market - inconsistent with your brand's image and values? Examples Ralph Lauren - known as " 三 脚 马 (san jiao ma)" or "three-legged horse" Salvatore Ferragamo - widely referred to as " 飞 甩 鸡 毛 " literally meaning "fly off the chicken feathers"

10 Examples of Good/ Bad Chinese-Language Marks Company Chinese Trade Mark Pronunciation Meaning Comments Coca-Cola 可 口 可 乐 Ke Kou Ke Le Delicious and pleasant Good. A strong and imaginative transliteration with positive meaning. Prada 普 拉 达 Pu La Da None Bad. A strange sounding transliteration with no meaning. Starbucks 星 巴 克 Xing Ba Ke Star for " 星 " Good. A clever combination of translation and transliteration. Google 谷 歌 Gu Ge Songs of crops Bad. A transliteration with strange meaning which is not well received by the Chinese consumers.

11 To File Broadly China operates on a unique subclass system under which goods and services in each class are divided into further sub-classes It is therefore possible for identical/ similar marks to be registered in the same class Example: Class 25 ("sweaters" - subclass 2501; "waterproof clothing" - subclass 2504; "shoes" - subclass 2507) The Chinese trade mark authorities apply the subclass system mechanically, and do not conduct meaningful likelihood of confusion analysis when deciding on the similarity of goods/ services

12 To File Broadly Apply for your mark with a customized specification of goods/ services to cover the following:- Goods/ services for which you intend to use the mark Goods/ services for which you may use the mark Goods/ services for which you wish to block others from registering the mark For broadest protection - To register your mark in all subclasses Note: A registered trade mark which has not been used for 3 consecutive years is vulnerable to non-use cancellation

13 To File Broadly Case in point - Victim of the subclass system: Apple applied for the trade mark "iphone" first in China in 2002, but only under subclass 0901 (computers and computer software) In 2004, a company called Hanwang Technology registered the mark "iphone & device" in subclass 0907 (communication and navigation instruments) Apple lost in the opposition and the subsequent appeal Apple had to pay Hanwang Technology in order to get the mark back

14 Subscribe to Trade Mark Watching Service To establish a professional watching service to watch for marks which may be identical/ similar to your mark To enable you to identify potential conflicts/ infringements involving newly filed applications in China To oppose the marks as they are published in the Gazette Oppositions It generally takes 3-4 years to conclude Effectively delay the registration of the mark No adverse cost implications on the losing party Seen to be aggressively policing your mark

15 Recordal of IPR with Chinese Customs Chinese Customs have the power to stop the import and export of goods that infringe upon IP rights Owners of registered IP rights (e.g. trade marks, patents and copyright) may apply to record their rights with the Customs Recordal is not a prerequisite for obtaining Customs protection But more likely that any seizure of suspected infringing goods will be reported to the rights owner It is advisable to file the customs recordal once your trademark applications are granted registration

16 Domain Name Registration To register appropriate ".cn" domain names incorporating your trade mark/ brand name To replicate the strength of protection elsewhere ".cn" domain names are registered with the China Internet Network Information Center (CNNIC) Registration of ".cn" domain names are limited to companies registered in the PRC (including Hong Kong) only For foreign companies who do not have an associated company in PRC/ Hong Kong, the easier route is to register and hold the domain name through a local PRC agent Local agent to assign the domain name back to the company in the future

17 Documenting Use of Your Mark To adopt a methodical approach to document the use of the mark in China For proving prior rights in the mark and continuous use of the mark in China Particularly important for pending marks Set up a file to collect the following information:- Invoices, receipts and other company documents related to the adoption and first use of the mark in China; Revenues generated by the trademarked goods/ services; Advertisements/ promotional materials that use the mark together with records of the advertising expenses; Reports on damage/loss resulted from infringing activities; and Awards, honours and official recognitions received

18 Lessons Learnt Apply for registration of your mark early Devise and register a Chinese version of your mark File broadly to cover as many subclasses of goods/ services as possible Subscribe to trade mark watching services - Oppose the sighted marks if necessary File IPR recordal with the customs Register ".cn" domain names incorporating your brand name Documenting use of your mark in China Look to experienced advisors to help manage your existing IPR portfolio

19 Q & A Elizabeth Wong T: F: E:

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