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Patent and Trademark Protection in China

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                               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

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                                                                           IPR value and managing risk

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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 enquiries@china-iprhelpdesk.eu
                                                                          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 enquiries@china-iprhelpdesk.eu
                                                                             Business tools for developing
                                                                              IPR value and managing risk

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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: enquiries@china-iprhelpdesk.eu
                                                                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 enquiries@china-iprhelpdesk.eu

				
DOCUMENT INFO
Description: 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.