Practical aspects of IP protection in China

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1 Practical aspects of IP protection in China Australian Trade Commission / Australian Embassy Commercial Section Beijing April 8th, 2014

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4 Counterfeits by origin

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9 Counterfeits by product

10 What is the problem? Complete legal framework IP laws and regulations Member of WTO and TRIPs Member of all IP international treaties Improve efforts to fight counterfeiting Protection in exhibitions But. Uneffective implementation and deterrent meassures Lack of coordination between agencies More and better organized infringers Better distribution channels (internet)

11 Risks and Damages IP protection is the main concern when investing in China (frustrating) IPR infringement Economic damages Direct counterfeited products Indirect blocking access to the market Impact on Reputation (goodwill) Damages Direct damages Indirect making use of our reputation Local within the China market In international markets through exports

12 What can be done? Preventive Meassures (ACT) Shorter time Lower cost Higher chances of success Defensive Meassures (REACT) Longer time Much higher cost Much lower chances of success

13 Preventive meassures: Registration Trademarks National or international way Protection for 10 years from registration Patents Requirements: novelty, non obvious and useful National or international way Protection for 20 years from filing Utility model Protection for 10 years from filing Designs Protection for 10 years from filing Other IPR (copyright or domain names)

14 What is a trademark? Identify our product/service and differ from others Words, letters, characters, numbers, devices, 3D, colors, combination of colors. Sounds Cannot be registered: Flags or national emblems of China or any 3rd country Geographical names Generic words, non distinctive or descriptive Against the moral or social customs Constitute exaggeration or fraud with regards to the prduct/services

15 Trademark Registration Specialities of the procedure First to file system (Apple $3.65 milion for iphone) No multi-class application Nice classification but with subclass system Specification of products Possibility of identical trademarks within the same class Requirements to proceed Name and Address of applicant Sample of the trademark List of product/services POA document (no legalization required)

16 Registration Procedure Trademark Search (recomended) Filing of the application Formal examination official action Substantial examination Total or partial refusal (TRAB within 15 days) Preliminary approval Publication (3 month opposition period) Registration and Certificate Duration of the process: months

17 Other relevant aspects Trademark in Chinese characters Why? Consumers need to identify the product If product does not include it, someone will do it for you Ways in which to create it Translation Transliteration Creation of new trademark for chinese market Hong Kong, Taiwan and Macao Customs Registration General Customs Administration Voluntary registration High degree of effectiveness

18 Invalidation of Rights Non use cancellation Before CTMO Only ex parte Non use of trademark for 3 consecutive years Owner must prove use (or justification) Dispute action (nullity) Before TRAB ex officio (CTMO) or ex parte Within 5 years from registration (unless bad faith) Reasons: Affected by absolute or relative grounds Obtained in bad faith

19 Defensive Meassures Administrative action before SAIC Fast and economic Ineffective sanctions Vulnerable to local protectionism No compensation for damages Civil action before the Intermediate People s Court Increasingly used More reliable judicial system (specialized courts) Compensation for damages Forum shopping recommended

20 New Trademark Law In effect from May 1st, 2014 Multi class applications Sound trademarks More defined time limits Modification of opposition process Bad faith Well known trademarks Renewal Stronger punishment on infringers Increase amount of statutory damages to RMB 3,000,000 Severer punishment for recidivist infringers

21 Summing up BE PROACTIVE RATHER THAN REACTIVE Administrative procedures take time, so start your registrations asap Proceed with registration: In China (CTMO and/or SIPO) In Customs In Hong Kong, Taiwan and Macao Create and register trademark in chinese characters

22 Thank you very much!!! Gordiano Casas

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