Tabata, Yasuhiro 'Anti-counterfeits Activities by Japanese by gddmZl

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									Anti-counterfeits Activities by Japanese
        Companies In China


             Yasuhiro Tabata
          Managing Director, JIPA
             October 29, 2003


                               JIPA Japan Intellecual Property
                                        Association
                               Contents
(Part I Introduction)
1. Legal Environment in China
2. History of IP System in China
3. Distribution of Counterfeits on Japanese Products
4. Damage Caused by Counterfeits in China
5. General Approach of Japan toward Chinese counterfeits

(Part II Specific Activities)
6. A concept of Anti- counterfeits
7. R&D, Marketing & Anti-counterfeits Strategy Forming
8. Obtainment of IP Rights
9. Information, Investigation & Identification of Counterfeits
10. Crackdown of Counterfeits
11. Assessment of Crackdown Results
                                                      JIPA Japan Intellecual Property
                                                               Association
                Part I Introduction
      1. Legal Environment in China

1) A complex legal system consisting of custom and
statute.
2) Insufficiency in “Rule of Law”
3) Insufficient independence of judicial system
4) insufficient transparency in legislative,
Administrative and judicial procedure
5) Local-protectionism in legislative,
Administrative and judicial procedure
                                         JIPA Japan Intellecual Property
                                                  Association
         2. History of IP System in China


•   1980 Membership in WIPO
•   1982 Trademark Law
•   1985 Patent Law
•   1990 Copy Right law
•   1993 Unfair Competition Law
•   2002 Entry into the WTO and adherence to the
    Trips


                                      JIPA Japan Intellecual Property
                                               Association
    3. Distribution of Counterfeits of Japanese Products

         By manufacturing country 1)                           By Consuming country 2)

 Midl             North         Latin                                     North          Latin
                 America                                     Midl        America        America
  & Africa                     America
                  3.5%                                        & Africa    6.9%           3.7%
    3.2%                        2.4%
                                                                4.5%
 West                                                West                                         China
                                         China
Europe                                              Europe                                        18.2%
                                         23.8%
 4.8%                                                5.8%
                                           Taiwan                                                   Taiwan
 East                                       16.0%                                                    13.9%
                                                     East
Europe                                              Europe
 1.3%                                                 2.4
                                 Korea                                                    Korea
                                 14.8%                                                    12.2%
     ASEAN         Hong Kong                             ASEAN             Hong Kong
      17.3%          12.9%                                24.3%              8.2%



 1) 2): “Counterfeit Report 2001” by JPO
                                                                         JIPA Japan Intellecual Property
                                                                                  Association
  4. Damage Caused by Counterfeits in China

1)Number of Companies suffering from counterfeits
           800                                  752

           600
                             417       385
           400      360

           200

              0
                    1
                  1997       2
                           1998        3
                                     1999       4
                                               2000


 2) Number of Companies suffering from counterfeits
 • 5-7% of the total world trade volume being that of the counterfeiting
   goods According to a survey of ICC.
 • Damage suffered by Japanese companies in China market would being
   up to 850 billion Yen.                             JIPA Japan Intellecual Property
                                                                    Association
  5. General Approach of Japan toward Chinese
    counterfeits
   Approach by Japanese Government
                                                             Approach by Private Sectors
  “Special Report” by Task Force on Industrial                Missions dispatched by
  Competitiveness and Intellectual Property Policy            JIP, JTMA etc. lobbing
  (2001)                                                      China Gov. for better-
 Strengthening of actions toward China in government for
        Central                                               control of counterfeits




                                                                                                         China Administration
 better-protection IP rights of Japanese companies
        Administration
 “Outline of National IP Strategy” by “The Strategic
 Council ON IP “ hosted by the Prime Minister
 (2002.3)
        Private
        Organization
Policy of strengthening protection of IP rights overseas     Joint Approach by Gov.
        like JIPA
 “Guideline on the Action against Counterfeiting                and Private Sectors
 goods in China” by METI (2003.1.22)                          Missions dispatched by
                                                              “International IP
        Private                                               Protection Forum”
•Establishment IP center in Beijing, Shanghai, Hong Kong
in order Companies
         to help Japanese company's activities against        requesting China Gov.
counterfeits.                                                 To improve its IP system
•Cooperation with China Gov. on raising the IP-protection-    and crackdown of
moral among Chinese people                                    counterfeits
                                                                       JIPA Japan Intellecual Property
                                                                                Association
                Part II Specific Activities
6. A concept of Anti- counterfeiting activity
                              (1)
                        R&D, Marketing
                       & Anti-counterfeits
                        Strategy Forming
                                                   (2)
          (5)

      Assessment of                           Obtainment of
       Crackdown                                IP Rights
         Results




             (4)                                      (3)
                                                 Information,
      Crackdown of                             Investigation &
       Counterfeits                            Identification of
                                                 counterfeits

                                             JIPA Japan Intellecual Property
                                                      Association
R&D, Marketing
     & Anti-
   counterfeits
Strategy Forming
                   7. R&D, Marketing & Anti-counterfeits
                            Strategy Forming
          1) Strengthening of technology innovation in R&D
             from the point of preventing counterfeits
          2) Designing of products with technical
             characteristics being difficult to imitate
          3) Development of business models capable of
             making counterfeiters difficult to sell their
             counterfeiting goods
          4)Development of efficient strategy for crack down
             counterfeits

                                             JIPA Japan Intellecual Property
                                                      Association
 Obtainment
of IP Rights             8. Obtainment of IP Rights
1) System concerning obtainment of IP rights in China
                                 People’s Congress


                                   State Council



     State IP Office          State Administration of          State Publication Bureau
                              Industry and Commerce


       Patent Office           Trade Mark Office                Copyright Bureau




     Granting patent                                              Registration of
     for invention,               Registration of
     utility model and                                            software
                                  trade mark
     design
                                                        JIPA Japan Intellecual Property
                                                                 Association
 Obtainment
of IP Rights
               2) Strengthened Obtainment of IP Rights by Japanese
                  Companies in China

               Top 10 Foreign Corporation According to Their
                         Patent Applications in 2002

                                                  Applications for
          No   Nation    Corparations             invention
          1    NL        Plillips                            1415
          2    JP        Matsushita                          1386
          3    KR        Samsung                             1003
          4    JP        Mitsubishi                           704
          5    KR        LG                                   533
          6    JP        Toshiba                              525
          7    JP        Canon                                504
          8    DE        Siemens                              500
          9    JP        Sony                                 485
          10   JP        NEC                                  472


                                                         JIPA Japan Intellecual Property
                                                                  Association
 Obtainment
of IP Rights
               3) The Main Problems in the System of I
               Obtainment

(1) Too long time needed for grant of patents for invention
   →5-7 years at average, 7-8 years in edge-cutting field.
(2) Insufficient Protection for Cutting-edge Technology
   →e.g. the software can not be a subject of a patent.
(3) Insufficient protection of patent for industrial design
   →No protection for design-in-part
   →Many false or double patents for industrial design,
   because of non-substance-examination system.
(4) Insufficient protection of famous foreign trade mark
   Still no foreign trade mark having been registered at State
   Administration of Industrial and Commerce (SAIC) as a
   famous trade mark.
                                               JIPA Japan Intellecual Property
                                                        Association
  Obtainment
 of IP Rights
                4) Japan’s Approach Toward the main
                Problems

(1) Lobbying Chinese government to review its IP laws
  and practices to access the global standards

(2) Cooperation on staff education with China side
  • Planed to dispatch technology experts to China to train
  Chinese examiner under the joint efforts by Japanese private IP
  organizations or companies.
   • Acceptance Trainees from SIPO, SAIC under JPO's Human
  Resource Development Project every year.



                                               JIPA Japan Intellecual Property
                                                        Association
  Information,
Investigation &     9. Information, Investigation & Identification
Identification of
  counterfeits
                                    of counterfeits

   1) Information Collecting
   ( Information source):
       •Chinese administrations in charge of controlling counterfeits
          ( AIC, TSB, Customs, etc.)
       • Chinese private investigation companies
       • Local branches or dealers of Japanese company
       • informants

   2) Investigation of suspected counterfeits
          : Use of Chinese local investigation companies for carrying out further
          investigations of the suspected counterfeits based the information
          gathered from above information source, to reveal the detail of the
          suspects.

                                                            JIPA Japan Intellecual Property
                                                                     Association
  Information,
Investigation &
Identification of
  counterfeits




3) Preliminary Identification of Alleged Counterfeiting Goods
        Usually for the case the counterfeiter is a whole seller or retailer
4) Problems
       (1) Insufficient information share between parent company and its
       Chinese local subsidiaries or dealers (for a few companies).
              Measure    To Dispatch IP experts responsible for anti-counterfeits
                         from parent company to its Chinese affiliate

       (2) Difficulties on catching the good timing to take action
                            No good idea yet !
       (3) Time consuming for the identification of counterfeiting goods (as
       deadly copied original products).
            Measure      To Develop identification technology to make
                         counterfeiting goods easy to identify
                                                              JIPA Japan Intellecual Property
                                                                       Association
 Crackdown of                     10. Crackdown of Counterfeits
  Counterfeits
                 1) IP enforcement System in China
                                        People’s Congress




                                                                                                           Central Level
                                                                                             Supreme
                                          State Council                                       Court

                                     State Publi-                                    Supreme
   State IP      State Admini-                          State          Ministry
   Office        stration of         cation Bureau      Technology     of Public
                                                                                    Prosecutor
                 Industry and                           Supervision    Security       Office
                 Commerce           Copyright Bureau    Bureau


                             Local government




                                                                                                           Regional Level
Local Patent                       Local Copyright         Local       Local        Local        Local
                    Local AIC                                          PSB          Pros         Court
Administration                     Bureau                  TS B
Bureau
                 Controlling TM     Controlling        Controlling      Criminal procedure
Controlling      infringement       Copyright          products with
Infringement     and Unfair         Infringement       Poor Quality      JIPA Japan Intellecual Property
of patent        Competition                                                      Association
                2) Crackdown of Anti-counterfeits
Crackdown of
 Counterfeits   activity by Japanese Company in China
(1) Remarkable Progress made
  • Canon K.K.
     2001/Oct. to 2002/Mar.: 5 to 6 cases/month raid,
                                 supplies sale raised up to 30%
     2002/Mar. to 2002/Jun.: 43 cases raid,
                                 supplies sale raised up to 70%
     (Key Success factor )
      a) 2 full-time IP experts dispatched to Beijing in charge of
     anti-counterfeits affair
     b) Continuous action against counterfeits
     c) Strong position against counterfeits, which having been
     demonstrated through the activities of corporation top officer
     with China administrative bodies, law firms and investigation
     companies.                                      JIPA Japan Intellecual Property
                                                                    Association
Crackdown of
 Counterfeits


   • Seiko-Epson K.K.
         37 cases raid(2002);
          Seized the counterfeiting goods being of value of about 380
           million Yen.
        (Key success factor)
         a)Special Project Team with the leader being director in
        charge of corporation IP affair
          b) Raiding counterfeits systemically and strategically
         campaign against counterfeits with full use of mass-media
        to demonstrate strong position toward counterfeiters.




                                                   JIPA Japan Intellecual Property
                                                            Association
Crackdown of
 Counterfeits




   • Matsushita Electric Industrial Co, Ltd.
         a) Two IP experts having dispatched to China( one to
             Beijing in1994, another one to Guangzhou in 1997)
          b) Each of 43 Chinese branches has One staff in charge of IP.
          c) Group IP meeting held twice each year.

        (Key Success factor )
          To build a win-win relations with China(Administration, Law
        firms, etc.)




                                                   JIPA Japan Intellecual Property
                                                            Association
Crackdown of
 Counterfeits   3) Problems Concerning anti-counterfeits in China
   (1) problems at Chinese side
         • Insufficient number of qualified IP enforcement Staffs (AIC
        staff s, TSB staffs or local court judges)
         • Local-protectionism in a few local IP enforcement bodies
           (a) No action on its own initiative to take against counterfeits
                in quite a few local IP enforcement bodies
           (b) A few decisions on counterfeits case without fairness and
              transparency
         • No damages in Administrative Enforcement (by AIC,TSB)
         • Expensive and time-consuming in civil Procedure (courts)
            compared with administration procedure.
         •Criminal Enforcement(police, prosecutor) not fully engaged yet

           Measure (1) Lobbying Chinese government to review its IP laws and
                   practices to access the global standards
                   (2) Cooperation on human source with China side
                                                            JIPA Japan Intellecual Property
                                                                     Association
Crackdown of
 Counterfeits




       2) issues to solve at Japan side
                (1) No full-time staff in its Chinese subsidiary in
                charge of affair of anti-counterfeits in quite a few
                Japanese companies.
                (2) Insufficient budget for anti-counterfeits in
                quite a few Japanese companies

                Measure To persuade the top managing officer by assessing exactly
                        anti-counterfeiting activities to make its merit more clear

                (3) Inefficient case-by-case raid tactics

                                    No good idea yet !
                                                               JIPA Japan Intellecual Property
                                                                        Association
Assessment of
 Crackdown      11. Assessment of Crackdown Results
   Results


1) assessment to the marketing result of anti-counterfeits
   activities
2) feeding-back of the assessment results to the stage of
   “R&D, Marketing & Anti-counterfeits Strategy Forming”
   to develop a better anti-counterfeits strategy and realize
   the spiraling-up of anti-counterfeits cycles.
3)Issues to solve
   how to assess exactly the marketing result which caused by
   the anti-counterfeits activity having been taken. And
   attention to be paid on the possible conflict with other
   laws e. g. anti-trust law (competition law), while carrying
   out the anti-counterfeits activities.

                                              JIPA Japan Intellecual Property
                                                       Association
 - END -


Thank you !



              JIPA Japan Intellecual Property
                       Association

								
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