VIEWS: 103 PAGES: 4 CATEGORY: Business POSTED ON: 10/19/2010
Until you register a patent or trademark in China, you do not own that right, meaning that applying for a patent and trademark before entering the China market is of utmost importance. This guide walks you through an overview of patents and trademarks, how to apply for them and how to your rights in case of an infringement.
Business tools for developing IPR value and managing risk www.china-iprhelpdesk.eu Patent and Trademark Protection in China Patent Protection in China national patent office within the EU. The applicant has to initiate the 'national phase', i.e. the Introduction procedure with the Chinese Patent Office, no later than 30 months from the priority date. Every company producing innovative products in China is A very careful translation of the application is of strongly advised to use the Chinese patent system. It is utmost importance. The national Chinese patent absolutely crucial to apply for patent protection in China application has to be in the Chinese language, for each and every innovation, even if a launch of the and only the Chinese patent claims eventually respective product in the Chinese market is not yet on the determine the scope of protection. horizon. Markets change rapidly and patent protection has to be requested before the respective product In China, if there are two patent applications filed on the is introduced anywhere in the world. In particular, a same innovation, the patent is granted to the one who European registered patent has no legal effect in China. filed its patent application first. IP protection measures should not be limited to filing 2. Patent types, terms of protection & registration patent applications. It is advisable to implement an overall procedure IP strategy covering legal, technical, administrative, and political aspects. Chinese patent law covers three distinct areas: The Patent Office of the Chinese State Intellectual An invention patent is granted for innovations in the field Property Office (SIPO) receives and examines patent of technology that are new and inventive over the prior applications and 'invalidation requests'. art, and that possess practical applicability. Protect your innovations: In order to obtain patent A utility model patent is granted for new technical protection in China, the inventor or his employer has to solutions relating to the shape and/or structure of an file a Chinese patent application. To ensure full protection object. In general, the degree of invention required for from infringement, the application should be filed before a utility model patent is not as high as for invention the innovation is disclosed to the public by marketing or patents. selling. A design patent is granted for original designs relating to the shape, pattern, colour or a combination of an object. 1. Application/Registration Patent rights commence from the date of publication in Foreign companies without a registered office in China the Patent Gazette. The term varies depending on the must use a local patent attorney to handle the filing of a type of patent. patent. The quality of the patent attorney and the quality of the application is critical for the value of the protective Terms right. Treat your patent applications as one of your Invention 20 years from the filing date company's most valuable assets in China. Utility Model 10 years from the filing date There are three ways to file a patent: Design 10 years from the filing date Average duration of application/registration • Directly filing a patent application in China procedure (as of March 2008) • Filing a patent application first in a foreign country (must be a Member State of the Paris Convention, Invention patents 3-5 years like all EU countries), and then file a second patent Utility/design patents 1 year application in China within 12 months (6 months for designs), claiming the priority date of the first In order to obtain enforceable protection rights as soon application. as possible, it is advisable to file a utility and invention patent application in parallel, and abandon the utility • Filing an international patent application under model patent once the invention patent has been issued. the Patent Cooperation Treaty (PCT), naming China as one of the designated states. A PCT application can be filed with the European Patent Office or any To ask our experts about any aspect of China IPR, email email@example.com Business tools for developing IPR value and managing risk www.china-iprhelpdesk.eu 3. Practical tips for obtaining effective patent protection are likely to result in inadequate court proceedings. If in China a company encounters patent infringement in China: Translation: Translation accuracy is always a major The first step should be to hire an experienced issue for patent applications filed by foreign patent lawyer. entities in China. Unfortunately, it is common that The second step requires an in-depth analysis of the a patentee finds out the invention, as defined in facts of the case by the patent lawyer (in particular, a Chinese patent, deviates substantially from the an analysis of the infringing embodiment and a original patent application as a result of inaccurate review of the validity of the patent). translation. To avoid translation errors, especially in a patent application for an important invention, it An infringement complaint can either be filed at the place is prudent to seek professional confirmation of the where the infringer is located, or where the infringing translation of the patent specification in Chinese. act (e.g. the sale) occurs. However, unlike the provincial Patent Co-operation Treaty applications: The text courts, Beijing, Shanghai or Guangzhou courts have more of the original PCT specification is accepted as experience in handling patent law cases. It is therefore the authentic text of a national Chinese patent recommended to file an infringement complaint with application. It is recommended to use the PCT route these courts. It is also necessary to establish proof of to file patent applications in China. infringement in these cities e.g. by initiating a delivery. For this purpose, it is advisable to use local investigation Amendments during prosecution: China has a very firms to approach the infringer. stringent approach regarding added subject matter and/or amendments made during prosecution. The plaintiff can also make a request to the People‘s Court Extending the scope of protection beyond that of to stop infringing acts immediately, preventing losses the original application may result in a patent being before and during the lawsuit. This is called a 'preliminary invalidated. injunction'. Claims: There are very strict rules on post-grant 6. Trial procedures, timeline and outcome amendments of claims. Claims can only be amended by features which are already present If the proceedings are not stayed pending the separate in the dependent claims. Dependent claims invalidation proceedings before the Patent Re- should include as many useful technical features examination Board (PRB), the average duration of as possible to cater for possible post-grant claim first instance proceedings involving a foreign party is amendments. approximately two years. The Civil Procedure Code requires a second-instance case to be completed within 4. Enforcement of patent rights in China three months, but the courts can extend the time limits. For foreign-related cases, there is no definite time limit Patentees have two main options for enforcement once for rendering a final decision. they discover that their rights are being infringed. The court fees for each instance are relatively low (1.0% In practice, judicial enforcement is by far the most of the value of the infringement, and 0.5% of the value important option. exceeding RMB 1,000,000). Administrative enforcement by the local Intellectual Property Office (IPO) may be an option in rather simple 7. Damages and fines cases, namely design patent infringement cases (in particular at trade fairs). The IPO may be also helpful to There are four methods for calculating the amount of mediate patent disputes. damages for patent infringement (reasonable expenses spent by the patentee on investigation and prevention of In contrast, complex technical questions related to infringement): 'invention' or 'utility model' patents are normally much less suitable for administrative procedures. The loss suffered by the patentee; The profits the infringer has earned; 5. Preparing a patent infringement complaint Appropriate multiple of licensing fees; When damages cannot be determined by any of the Filing a civil patent infringement complaint requires very three methods mentioned above, the court may careful planning and preparation of the case. Deficits award 'lump sum' damages up to RMB 500,000. To ask our experts about any aspect of China IPR, email firstname.lastname@example.org Business tools for developing IPR value and managing risk www.china-iprhelpdesk.eu Trademark Protection in China new entrants to the Chinese marketplace, and mandatory for foreigners without residence or Introduction place of business in China. • National applications can only be made in Chinese. Since China has a centralised registration system, For trademarks applied for directly in China, a the assessment and registration process is relatively separate application must be filed for each class. straightforward. • National registrations are protected for 10 years It is important to note that China uses the 'first-to- (renewable). file' system, meaning that companies may lose legal International System protection in China if a similar mark has already been registered within China. China is a member of the Paris • Upon receipt of the application for extension of Convention and WTO, so you ought to file in China within protection, the WIPO issues a certificate, publishes six months of registration of the same mark in Europe in the trademark in the International Trademark order to keep the original application date. Gazette and notifies the Trademark Authority of the state concerned. Use of a trademark is defined as 'use on the goods, • An international application can be made in English packages or containers, or on trading documents, in or French. advertising, an exhibition or any other business activities' • The international application may cover more than to avoid a request for non-use. one country at the same time and at the same cost, and the basic fee covers up to three classes of 1. Trademarks goods and/or services. What is a trademark? • International registration is usually processed faster than national registration. A trademark is a sign that serves the specific and primary purpose of identifying the goods or services of • International trademarks are protected for a a producer, thus allowing the consumers to distinguish (renewable) period of 20 years. goods or services of one producer from those of another. • Since the duration of protection provided for internationally is 10 years, fees must be paid in two What can be registered as a trademark? instalments. The sign may be composed of words, devices, letters, numerals, three-dimensional signs (shapes), combinations 3. Trademark Certificate of colours or any combinations of the above. It is necessary in China to request the TMO to certify an Trademarks in Chinese international registration, which may take up to three Chinese consumers are likely to find a Chinese name months, and this may affect the speed of an enforcement for foreign trademarks either by way of translation or action. by transliteration. It is advisable to register a Chinese version of a foreign trademark. Indeed, the registration of Chinese trademark agents usually provide a watch service a trademark in roman characters does not automatically for their clients. It is highly recommended that this protect the trademark against the use or registration of service, as well as the assessment and advice regarding the same or similar trademark written in Chinese. the possibility to oppose, be entrusted to Chinese- speaking professionals and conducted in Chinese, as 2. Registration procedure some infringing trademarks that should be opposed may be in Chinese. A trademark can be registered either through the ‘national system’ implying a direct application to China’s Trade 4. Lodging a complaint: Administration for Industry and Mark office (TMO) or through the ‘international system’ Commerce (AIC) meaning an application to the World Intellectual Property Organisation (WIPO). A complaint can be lodged with the local trademark bureau of the Administration for Industry and Commerce National System (AIC), above the county level, where the infringement is committed (manufacture, sale, storage, etc.), specifying • To begin, select a trademark agent from the the trademark rights of the owner (a copy of the official list. The involvement of a trademark trademark registration certificate) and providing any agent for the filing of the trademarks at the evidence of the infringement (sample of the infringing TMO is advisable for all companies, particularly To ask our experts about any aspect of China IPR, email email@example.com Business tools for developing IPR value and managing risk www.china-iprhelpdesk.eu product, for example). This action is mainly of a 'practical' • In theory, the court may act as fact finder and order nature and is aimed at investigating and seizing. At the inspection, but usually, evidence is produced by the end of a raid, if the AIC is satisfied that an infringement parties themselves. has been committed, it will order the infringer to stop • At the end of the hearing, the court asks the parties the infringing acts immediately. In principle, AIC should if they wish to settle the dispute. systematically confiscate and destroy the infringing goods and the tools specially used for manufacturing the • The judgment is delivered within a few months, infringing goods or labels. depending on the complexity of the case. Remedies as a result of civil procedure The AIC may also impose fines. The amount of the fine depends on the size of the illegal business, and cannot The court may apply the following measures: exceed three times this amount. However, the calculation • Order to cease the infringements (injunction); of the 'illegal business' is not an easy matter since in most • Confiscate infringing goods, materials as well as the cases the infringer does not produce any accounting tools and equipment used in the production of the material, and reference to the price of authentic goods is infringing goods; still not as a rule accepted by the Chinese authorities. If • Order the payment of damages. the fine cannot be easily calculated, a fixed amount may be decided by AIC, with a maximum of RMB 100 000. Damage for infringing a trademark right is calculated according to : AIC cannot grant compensation, it can only act as a • The losses suffered by the IP owner; mediator. Assessing and granting compensation is • The profits gained by the infringer out of the therefore within the exclusive jurisdiction of the People’s infringement; Courts. • An amount of damages not exceeding RMB 500,000 where difficulties arise to determine the illicit profit 5. Administration of Quality Supervision Inspection and that the infringer has earned or the loss suffered by Quarantine (AQSIQ) the injured party. AQSIQ is in charge of managing the quality of products: 7. Criminal procedure setting out national standards, certifying the quality of products and taking anti-fake and poor quality goods What acts constitute a trademark crime? actions. Since the main issue is a quality issue, and The activities concerned are: not the protection of an intellectual property right, any person may go to AQSIQ and complain without having to • Manufacturing or knowingly selling counterfeits justify a personal interest. • Forging or selling unauthorised representations of a trademark. It is necessary to base the claim on one of the two following grounds: Public prosecution • Sub-standard quality of the goods Generally, criminal cases are brought before the court by • That the goods are sold in a package bearing the a bill of indictment of the People’s Procuratorate. name and address of another person. AQSIQ has the same powers as AIC during a raid. The fine Links for fake and poor quality goods is, in most cases, between State Administration for Industry and Commerce (SAIC)/ Trademark Office (TMO) two and five times the value of the goods. www.saic.gov.cn www.tmo.gov.cn 6. Civil procedure General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) Protection of trademark www.aqsiq.gov.cn State Intellectual Property Office (SIPO) www.sipo.gov.cn The civil procedure is operated according to the following steps: • A complaint needs to be filed with the civil division China IPR SME Helpdesk of the People’s Courts. E-mail: firstname.lastname@example.org Tel: +86 (10) 6462 0892 • The court decides on a date for a pre-trial hearing, Fax: +86 (10) 6462 3206 during which evidence is examined and discussed Office C319, Beijing Lufthansa Center by the parties before the court. 50 Liangmaqiao Road, Beijing To ask our experts about any aspect of China IPR, email email@example.com
"Patent and Trademark Protection in China"