Docstoc

prague-presentationfinal_1240992513

Document Sample
prague-presentationfinal_1240992513 Powered By Docstoc
					IPR and China
 – Putting Czech SMEs ahead of the game
                   Presented by Helpdesk Experts:
                                 Simon Cheetham
                                     Jannik Skou
The Helpdesk Initiative

 • European business is 99% SMEs, about 2/3 of
   employment & about 57-58% of value added (a bit
   like ratio of Chinese origin goods to all counterfeit
   seizures….)
 • Definition of SMEs isn't only 'micro-enterprises'
   (under 10 people) but extends up to 250 employees,
   so covers more of economy than you might think
 • SMEs tend to assume that IPR is: costly, technical,
   'too complicated' and 'not for me' leading them to do
   even less than they could do otherwise
 • SMEs have fewer resources so need help
Helpdesk services
    Office Network                            Business tools
                          Online Portal




  Research/Publication                       Training/Workshop




                         IP Expert Network
Online Portal – A business tool for you to use



   Upcoming                                                  Ask our IP
   events listed                                             experts a
                                                             question

Business tools
easily accessible


 Navigation bar
 for ease of use                                             Helpdesk news




     Coming soon! E-learning module: Trademark protection in China
Workshop Agenda


         Getting ahead through innovation -
         why EU SMEs Need To Consider IPR

            What Do You Need to Protect?

        How Can Businesses Best be Protected:
            - Know before you go
            - While doing business with China
Why Do Companies
Need To Consider IPR?

 EU - China trade in 2008 = US$360 billion



        EU        China = US$113 billion
        EU        China = US$247 billion

                             Source: Ministry of Commerce for China
Prevention
                      T1. Statistics of Patent Applications in China by 2007
    Number
   4,250,000                                                                                             4,028,520
   4,000,000

   3,750,000

   3,500,000                                                                           3,334,374
                                                                                                               3,314,591
   3,250,000

   3,000,000
                                                                     2,761,189
   2,750,000                                                                                 2,727,626
   2,500,000                                       2,284,925                                                                  Accumulated Total
   2,250,000                                                               2,257,515                                          Domestic
                                 1,931,118                                                                                    Foreign
   2,000,000
                                                         1,874,358                                                            EU
   1,750,000   1,622,631
                                       1,595,415
   1,500,000
                     1,344,177
   1,250,000

   1,000,000
                                                                                                         713,929
    750,000                                                                            606,748
                                                                     503,674
                                                   410,567
    500,000    278,454           335,703

    250,000
                                                         103,644           125,366           149,481
                     74,454            86,685
          0
               until 2002        until 2003        until 2004        until 2005        unitl 2006        until 2007        Year
Prevention
       T3. Statistics of Trademark Application of Registration in China 2002-2006
   Number
   800,000                                                            766,319



   700,000                                              664,017

                                                                      669,276
                                          587,925
   600,000
                                                        593,382

   500,000                                527,591
                            452,095
                                                                                           Total
                                                                                           Domestic
   400,000    371,936
                                                                                           Foreign
                            405,620
                                                                                           EU

   300,000    321,034


   200,000


                                                                      97,043
   100,000                                60,334        70,635
              50,902        46,475
                                                                          44,859
                  16,712        15,955        20,720        24,723
        0
               2002          2003          2004          2005          2006         Year
Why Do Companies
Need To Consider IPR?
 • To protect products & ideas         • To create a market for future
                                         development
 • To protect & harness brands &
   reputation                          • To create a strong defence in case
                                         of conflicts / infringement
 • To justify research &
   development costs                   • To record attract investors

 • To take ownership of new rights     • To enable licensing- & co-
                                         operation agreements;
 • To prevent other companies from
   using inventions & designs          • To arrive at the best decisions for
                                         registering rights internationally.
 • To keep competitors at a distance
What Do You Need
To Protect?

 • Brand names      • Designs
 • Inventions       • Software
 • Technology       • Systems & procedures
 • Artistic works   • Know how
 • Literary works   • Trade secrets
 • Domain names
How Can Businesses
Best Be Protected?

 Issues before you start doing business with
 China, you should consider:
   – Are your rights registered?
   – What countries are covered?
   – What about Chinese versions?
   – Who are you dealing with?
   – How do you know if they are reliable?
How Can Businesses
Best Be Protected?

  • China is a “first-to-file” country when it comes to IPR
    registrations.
     - Key issue for many EU Businesses – case study

  • China, Hong Kong and Taiwan use separate legal
    systems, i.e. there is a need to file in both.
  • For trademarks: register broadly in many classes,
    Chinese versions of your TM should be registered
How Can Businesses
Best Be Protected?

  While you are there:
    – Contracts/NDAs/confidentiality – notarise
      agreements
    – Are they likely to develop your product – what
      about IPR?
    – Does your supplier/manufacturer have control of
      brand labels/moulds/production
      equipment/proprietary information?
    – Assess risks – who else does the supplier work
      for? Is there a conflict of interest?
How Can Businesses
Best Be Protected?

 Precautions against loss of technology & IPR

   – Modular sourcing
   – Protect parts against copying
   – Integrate in-house if possible
   – Don’t openly send tech drawings
   – Keep data in Europe
   – Do your homework: Integrate employees
Case study:
Great idea – poorly executed…
How Can Businesses
Best Be Protected?
              Business partners and IPR protection
 • Consider how you want the relationship to work and what
   controls you need to put in place to secure your rights
 • Conditions should be put into a written agreement and
   accurately translated and understood by all parties
 • Take steps to verify that your potential business partner are
   genuine and share the same goals as you
 • If possible, consider keeping your most valuable IP a ‘trade
   secret’, for example, the formula for Coca-cola.
How Can Businesses
Best Be Protected?
            Business partners and IPR protection

 • Consider what samples and promotional materials you
   provide to potential partners
 • Ensure that your property is protected after an agreement has
   ended e.g. include the return of moulds within the written
   agreement
 • Clearly state what Intellectual Property Rights are owned by
   whom in respect any items you supplied
 • Use confidentiality, non-competition and non-disclosure
   agreements
 • Specifically state that your supplier may NOT use a sub-
   supplier without your permission
How Can Businesses
Best Be Protected?

 • Register IPR                      • Contracts / sourcing
    - Use a layered defence

 • Domain names – a growing          • NDA / Confidentiality
   issue in China: list of             agreements - notarize
   officially recommended
   registrars on the CNNIC
   website:                          • Check & ensure IP materials
    http://www.cnnic.net.cn/en/ind     used correctly
       ex/0L/index.htm

 • Keep trade secrets ‘secret’       • Control labels / packaging /
                                       marketing material etc
Detection


 • Police your market e.g.    • Trade Fairs
    - Check suppliers            - Check exhibitor contract
    - Audit manufacturers        - Research other
    - Internet sweeps              exhibitors
    - Feedback from              - Prepare an IP pack
      customers/sales staff      - Determine strategy
    - Market surveys
    - Customs (China & EU)
Enforcement

 Administrative action:
    – There are over 30 different
       administrative authorities.
       No-one coordinates nor
       investigates. You need to
       obtain evidence and convince
       the authorities, who can:
              – carry out unannounced
                raids
              – seize, impound and
                destroy fake goods
              – issue punishment decisions
              – impose fines (not large)
              – revoke business licenses
                                             SAIC building - Beijing
 Criminal action – usually escalated
    via Admin Authorities
Enforcement - Raids
     Examples of raids – car parts, garments, shoes
Enforcement - Raids




                      Exterior of Military area – PLA
                         production base
                      Shoe boxes printed with sale
                         price in £ & Euros
                      Factory making infringing
                         footballs
Enforcement

 Civil action – plenty of resources:
    - 120,000+ lawyers, 10,000+ law offices, 350,000 court staff
 To guide you through the maze:
    – Trade associations / Chambers of Commerce etc
    – China IPR SME Helpdesk
    – Complaint Centers
Summary & Questions

 • You don’t have to be an expert –there are
   plenty out there
 • Register rights – if you don’t own it you can’t
   protect it
 • You need to be the first to file IPR in China
 • Use good contracts
 • Prevention better than cure
 • Be proactive
Online Protection of IPR in China
                     Jannik Skou
       Thomsen Trampedach GmbH
Online Protection of IPR in China
Online Protection of IPR in China
Online Protection of IPR in China
Online Protection of IPR in China
Online Protection of IPR in China



•    Content
    – Introduction
    1. Overview: The Internet and China
    2. Why is internet domain name protection in
       China important?
    3. How can European SMEs protect their IP assets
       online and mitigate related risks?
    4. The domain name registration process in China
    5. How can one recover an infringing .cn domain
       name?
Introduction

                                     Jannik Skou

Danish partner at Thomsen Trampedach GmbH, Swiss based consulting company



     Introductory Project Meeting
Has 10 years experience with domain name strategy and online brand protection


Serviced a number of top 500 multinational brands

               EU-China Chamber of Commerce, Beijing
                                  Service Areas
                                12 March 2009
Domain Name Strategy, Online brand protection, domain name and brand monitoring,
recovery of domain names, investigations

Business process optimization for domain name registrars and ISPs
Online IPR Strategy




                            IP Strategy
                          Domain Strategy


  Marketing                IT                       IPR Protection
   Visibility              Infrastructure          Domains as IP
                           and security            assets




                          Operations
 Domain name policy, work flows, monitor, enforce etc.
1. The Internet in China is booming
  • Almost 300 million netizens
  • Surpassing the US as largest Internet Nation (VIDEO CCTV 2008)
  • Growth of 41.9 %




         Source; CNNIC.cn
Internet is going mobile
 – especially in China

• 650 Million mobile users*
• 40 % of netizens accessing Internet via Mobile phones **
• China Telecom to purchase 50 million mobile phones this year,
  20 million 3G mobile phones.*
• China´s ”go West – programme” likely to accelerate growth in
  number of mobile netizens in China

• Why important for European SMEs?
• Direct navigation > increase importance of domain names
     – Impatient : Guess for the name of the website


Sources: *ChinaDaily.com.cn and **CNNIC.cn
Rapid Growth in Domain Names
 • The world’s largest country code; .cn
 • More than 14 million .cn registrations
 • .cn dominating domain registrations in China (80% .cn)
Domain Names in China not just
another TLD

  •   Romain Characters .cn          • domain.cn
  •   Simplified Chinese .cn         • 清华大学.cn
  •   Traditional Chinese .cn
  •   Chinese Characters ”dot”       • 北京大学.中国
      Chinese Characters
  •   Key Words                      • 手机
                                       – (‘mobile phone’ in Chinese)
  •   Wireless Keywords
  •   34 Regional suffixes (bj.cn,
      sh.cn etc.)
  •   .cn / com.cn/ net.cn /
      org.cn
The .cn Domain name regulations have four
important characteristics



  •   It is based on a ‘first come, first served’ principle
  •   Instant registrations
  •   Low costs
  •   Low demands for documentation

  • as long as the domain name is available, anybody
    can register the domain.
Future Domain Name Developments
already end of 2009

 • New gTLDs - .car, .shop, .brand, .berlin

 • New fast track IDNs (internationalized Domain
   Names) – local characters ”dot” local characters
      – Chinese government specifies four Chinese character
        domain names as the first candidates which are
        ".Zhongguo (means China)", ".Gongsi (means company)",
        ".Wangluo (means Internet) and ".CN", which is the
        original domain name in China's domain name system. *
 •   VIDEO chinese characters in domain suffixes
 • *Source: http://english.ipr.gov.cn/ipr/en (China Daily)
Online Protection of IPR in China


  •    Content
      – Introduction
      1. Overview: The Internet and China
      2. Why is internet domain name protection in
         China important?
      3. How can European SMEs protect their IP assets
         online and mitigate related risks?
      4. The domain name registration process in China
      5. How can one recover an infringing .cn domain
         name?
Why is internet domain name
protection important in China?

  • I have a .com domain name or a .cz – that
    should be sufficiant...

  • You heard that Chinese Chery will buy Volvo?
  • Let us find them:
Chinese Car Manufacturer...easy to find?




                                   Oups, I forgot the ”.” after www
Try again... www.chery.com, right?
can buy that...just make an offer...
… it must be cherycars.com then…
Or chery-auto.com ?
Or cherymotors.com ?
What about Google then ?
Hmmm….do I have to look for a .cn domain?
Cheryauto.cn ?
Maybe just chery.cn ?


                        Where is the
                        ENGLISH button?

                        Chinese use and
                           search for .cn...

                        And Expect Chinese
                           Content!
Internet in China attractive..
For foreign companies... And infringers

 • More shopping / purchasing online
 • Easy to establish online business
     – Less administration in terms of JVs, WOFEs etc.
 • Large growing domestic market

 • BUT: Easy for Criminals as well
     –   Poor protection for right owners
     –   Easy to stay anonymous
     –   Easy to copy online
     –   Easy to ”hit and run”
     –   Hardly any penalties
Types of Online Threats


  • From Cybersquatting to Typosquatting
  • Online Counterfeiting
     – Infringing domain name
     – Under
        • Alibaba.cn, baidu.cn, ebay.cn?
        • Elsewhere
  • Fraud
     – Scams and slamming
  • Phishing
  • False affiliation
Possible impacts of online criminal activity


  •   Traffic diversion
  •   Lost emails *@company.cn
  •   Brand dilution
  •   Lost reputation
  •   Lost trust

  > Lost business and lost customers or even law
    suits from consumers against IPR holders!
Online Protection of IPR in China


  •    Content
      – Introduction
      1. Overview: The Internet and China
      2. Why is internet domain name protection in
         China important?
      3. How can European SMEs protect their IP assets
         online and mitigate related risks?
      4. The domain name registration process in China
      5. How can one recover an infringing .cn domain
         name?
3. How can European SMEs protect their IP assets
online and mitigate related risks?


 • Create a Domain Name Strategy
     – What is the purpose of domain name registrations?
         •   Protection of IP
         •   Increasing visibility (Online marketing)
         •   Infrastructure (emails, websites, intranet)
         •   Security (risk mitigation – avoid lost emails, lost traffic etc)


     ....REGISTER! Do not rely on enforcement

     First step, though is...
Research


 • Domain Name Audit
 • Which domains are registered – by whom?
 • How are these domain names being used?
   (Web content, emails)
Set guidelines

• Domain Name Policy
• Which exact domain names and keywords to
  register?
  – company names, product names, abbreviations,
    translations, transcriptions, IDN.IDNs with hyphens?
    Regional TLDs?
• How to register and use the domain names?
  – Active use, individual websites for Search engine
    optimization, DNS, emails, redirecting?
• Which existing third party domain names and
  keywords to recover?
  – Anonymous buy back? Legal actions? Observe?
nitor and Enforce


   • Monitoring
   • Which possibly infringing domain names are
     registered by third parties on an ongoing basis?
   • Which new websites are selling our products or
     eroding our brands?
   • New Online threats emerging?
   • New industry trends?
   • Enforcement
   • Recover third party domain names, take down of
     infringing websites, or take legal actions.
Online Protection of IPR in China


  •    Content
      – Introduction
      1. Overview: The Internet and China
      2. Why is internet domain name protection in
         China important?
      3. How can European SMEs protect their IP assets
         online and mitigate related risks?
      4. The domain name registration process in China
      5. How can one recover an infringing .cn domain
         name?
4. The domain name registration
     process in China

 •   Translate name
      –   Transliterate and transcript
 •   Check for availability – Roman and Chinese names
      –   http://www.cnnic.cn/en/index/index.htm
 •   Check for infringement
      –   Do others hold a right to this domain name (TM, company name?)
 •   Choose a registrar
      –   Usual European registrar or get Chinese registrar recommended
      –   Foreign registrars http://www.cnnic.cn/html/Dir/2007/06/25/4671.htm
 •   Activitate domain name
      –   Point to website, create emails, other
 •   Renew domain name

 •   Price: 15-40 EUR per .cn domain name per year. Volume discounts typically available.
      –   Multiple periods (1-10 years available)

 •   Special Chinese Restrictions on domain name registrations are...
Article 27

  •   1) Those that are against the basic principles prescribed in the Constitution;
      2) Those jeopardize national security, leak state secrets, intend to overturn the government,
      or disrupt of state integrity;
      3) Those harm national honor and national interests;
      4) Those instigate hostility or discrimination between different nationalities, or disrupt the
      national solidarity;
      5) Those violate the state religion policies or propagate cult and feudal superstition;
      6) Those spread rumors, disturb public order or disrupt social stability;
      7) Those spread pornography, obscenity, gambling, violence, homicide, terror or instigate
      crimes;
      8) Those insult, libel against others and infringe other people's legal rights and interests; or
      9) Other contents prohibited in laws, rules and administrative regulations.
  •   Article 28
  •   Domain Name registrant sign the registrant agreement with the Domain Name Registrar.
      (Online)

  •   Source; China Internet Domain Name Regulations
       –   Order No.30, Ministry of Information Industry of the People's Republic of China (from cnnic.cn)


       – Also; please BE AWARE OF...
What to do?


•   ignore the email
•   reply to the email that you will report this email to
    CNNIC (the Chinese domain name registry) as a
    “slamming” and fraud attempt
•   forward the email to CNNIC at service@cnnic.cn
•   register some of those domain names you were
    maybe already considering to register. Register
    through your local or usual registrar.
Online Protection of IPR in China


  •    Content
      – Introduction
      1. Overview: The Internet and China
      2. Why is internet domain name protection in
         China important?
      3. How can European SMEs protect their IP assets
         online and mitigate related risks?
      4. The domain name registration process in China
      5. How can one recover an infringing .cn domain
         name?
5. How can one recover an infringing
     .cn domain name?

• Assess impact
   – Risk
   – Rights
• Options
   – Buy back
   – Legal actions
      • Domain Dispute
      • Go to court
Option 1


 • Buy Back
    – No legal rights?
    – Urgency?
    – Anonymous through agent?
    – Price; typically just lower than alternative dispute
      resolution fee
Option 2 – Legal action –
Domain Dispute

•   Legal assistance:
     – Send polite cease and desist letter
     – Send ”threatening” cease and desist letter
     If no success or response:

•   ‘CNNIC Domain Name Dispute Resolution Policy’.
     – HKIAC Hong Kong International Arbitration Center
       (http://dn.hkiac.org/cn/cne_welcome.html)
     – CIETAC China International Economic and Trade Arbitration Commission’s
       http://dndrc.cietac.org/static/english/engfrmain.html
     – In Chinese if no other agreement – all documents to be translated
     – Cost for one domain name dispute case is appr. EUR 450, to which one has to add an
       attorney fee of around 1200 EUR.
     – Duration 2 months

•   It is recommended to get assistance from IP Law firms - either Chinese or
    international - with expertise in domain name disputes.
Option 2 - Legal Action -
Domain Dispute

• The main criteria for proving a prior right to a domain name
  are
   – the disputed domain name is identical with or confusingly similar to
     the complainant's name or mark in which the Complaint has civil
     rights or interests;
   – the disputed domain name holder has no right or legitimate interest in
     respect of the domain name or major part of the domain name;
   – the disputed domain name holder has been registered or is being used
     the domain name in bad faith.
• Note: A domain name dispute has to be carried out within
  two years after the initial registration of the .cn domain
  name. After this period one has to go through the legal
  system, which can be a timely and costly affair.
Latest decisions –
as of April 09
Option 3 Go to court


  • If either party wishes to go to court the
    general legal system takes over from
    arbitration.
  • Costs: 100-600 EUR plus attorney fee!!
  • Duration:
           • within a year (8-10 months)*
           • Appeal – additional one year


  •   Sources: Bettinger, 2008: ”Handbuch des Domainrechts.”
Wrap Up
    Poor Online IPR Protection may lead to
    – Lost traffic (Direct navigation)
    – Poor visibility SEO
    – brand dilution
    – fraud
    – lost reputation
    – lost emails
    – Counterfeiting
    – Lost Customers

    Solutions
    Create a strategy:
    – Proactive approach – REGISTER

   Cheap and fast – also for infringers
   Monitor and enforce
    – Enforcement is working : time and cost consuming
Online IPR Strategy



                           IP Strategy
                         Domain Strategy


  Marketing               IT                       IPR Protection
 Visibility               Infrastructure           Domains as IP
                          and security             assets




                         Operations
Domain name policy, work flows, monitor, enforce etc.
Thank You
 Mr. Simon Cheetham is the Team    Helpdesk expert Mr. Jannik
 Leader for the China IPR SME      Skou is based in Denmark and works
 Helpdesk and works for Erinyes    for Thomsen Trampedach GmbH
 International in London           www.thomsentrampedach.com



                       Questions ?
             Email: enquiries@china-iprhelpdesk.eu
                     Tel: +86 (10) 6462 0892
              Website: www.china-iprhelpdesk.eu

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:3
posted:3/4/2010
language:English
pages:74