Well-known Trademark in China (2014): No Longer Unknown, But Still Unloved?

Saturated Saturday: Tsingtao Beer China's Well Known Trademark

 

 

By Danny Friedmann

 

The Third Amendment to the Trademark Law, which, together with the revised Trademark Regulations, came into effect May 1st, 2014, in combination with the Well-known Trademark Recognition and Protection Regulations stipulated by the State Administration for Industry and Commerce (SAIC), came into effect on May 17, 2014, will clarify among other things:

 

- The routes to get recognition of one’s trademark as well-known, so that one’s trademark will benefit from the extended protection;

- Well-known trademarks can no longer be used as a promotional tool;

- The threshold for well-knownness.

 

The preliminary question is why we need well-known trademarks?

 

The idea of the well-known trademark doctrine can be seen as a correction to the territoriality principle of trademark law. This is especially useful if proprietors have been relying on unregistered marks if they are coming from a first-to-use country, only to find out that in the first-to-file markets, such as China, where they would like to become active, their marks have already been registered. Or if they have never used a trademark in a country (in case of first-to-use countries).

 

At the 1925 revision of the Paris Convention for the Protection of Industrial Property at The  Hague in the Netherlands, it was decided that holders of marks should be protected against registration or use of a trademark for identical or similar goods which constitutes a reproduction, imitation or translation and which can create confusion of a registered or unregistered but used mark that is considered well-known by the competent authority of the country (Art. 6bis(1) Paris Convention).

 

Article 16(2) TRIPS extended Article 6bis Paris Convention (Stockholm Act of 1967) to services, and according to Art. 16(3) TRIPS to dissimilar goods or services, as long as the mark would indicate a connection between those goods or services and the owner of the registered trademark and provided that the interests of the owner of the registered trademark are likely to be damaged by such use (indicating protection against trademark dilution).

 

In short, each WTO member should protect:

- Unregistered well-known marks against misrepresentation by an identical or similar trademark for an identical or similar goods or services;

- Registered well-known trademark against misrepresentation or misappropriation by an idential/similar trademark for identical/similar or dissimilar goods or services.

 

What are China obligations in regard to the protection of well-known trademarks?

China became a member of the Paris Union in 1985 and the WTO, of which TRIPS is an integral part,  in 2001.  So, China has committed itself to implementing Art. 6bis Paris Convention and Art. 16(2) and (3) TRIPS.

China has made it clear in Article 14 Trademark Law 2014 that to the recognition and protection of well-known trademarks should be applied using the passive protection principle, a necessity check and on a case-by-case basis. The passive protection principle means that, although Art. 6bis Paris Convention allows the refusal or cancellation of a trademark “ex officio” (which means that the competent authority, by virtue of the office, can take the initiative) in case of a well-known trademark, but China chooses not to permit this in their legislation. Only the trademark holder can request the protection of a well-known trademark.  

 

The necessity check means that the Trademark Office (TMO), Trademark Review and Adjudication Board (TRAB) or people’s courts first need to look for alternative ways to solve the problem, for example if possible solving the case as a conventional infringement case. Well-known trademark protection should remain a last resort for the Chinese authorities. To deal with well-known trademark protection on a case-by-case basis was already the mode of operation.

 

Routes to well-knownness: who determines what a well-known trademark is in China? 

This depends on the timing of this question:

During the examination phase: the TMO can assess whether the trademark is well-known at the request of the applicant.

During an alleged infringement case: when an AIC is investigating, the TMO can assess whether a trademark is well-known, at the request of the trademark holder.

During opposition/concellation: the TRAB can assess whether a trademark is well-known at the request of the trademark holder.

During litigation: the trademark holder can directly request the court in case of an infringement, or request the court during an administrative appeal to assess whether his/her trademark is well-known .

 

Be a well-known trademark, but do not shout it of the roofs

Until recently the words “well-known trademark” (驰名商标), in both Chinese and English, could be found on bottles and cans of Qingdao beer (click here). However, times have changed. Apparently there was massive abuse, and therefore the government decided that well-knownness of a trademark cannot be used for promotional purposes. Read the explanation of Wu Qun, vice inspector of TMO under SAIC here.

 

Thresholds: well-known trademarks in China

Art. 2 Well-known Trademark Recognition and Protection Regulations (SAIC) of 2003 has the following threshold for the well-known trademark: “generally known to the relevant public and enjoys a high reputation in the trademark” (在中国为相关公众广为知晓并享有较高声誉的商标).

Article 2. Well-known Trademark Recognition and Protection Regulations (SAIC) of 2014 has the following threshold: “thoroughly known to the relevant public” (在中国为相关公众所熟知的商标).

“Thoroughly known” is a higher threshold than “generally known”. Dropping the seemingly redundant “and enjoys a high reputation in the trademark”, seems to have no influence on the threshold, unless one interprets “high reputation” as a positive connotation, in which case the thresholds can be interpreted also lower, since one no longer has to proof this.

However, the 2014 threshold seems higher than the second sentence of Art. 16(2) TRIPS:  “In determining whether a trademark is well-known, Members shall take account of the knowledge of the trademark in the relevant sector of the public, including knowledge in the Member concerned which has been obtained as a result of the promotion of the trademark.” See also the non-exhaustive factors stated in Art. 2(1)(b)(1)-(6) Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks, General Assembly WIPO, September 20 to 29, 1999 (page 6): for competent authorities to determine whether a mark is well-known:

(1) the degree of knowledge or recognition of the mark in the relevant sector of the public;

(2) the duration, extent and geographical area of any use of the mark;

(3) the duration, extent and geographical area of any promotion of the mark, including advertising or publicity and the presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies;

(4) the duration and geographical area of any registrations, and/or any applications for registration, of the mark, to the extent that they reflect use or recognition of the mark;

(5) the record of successful enforcement of rights in the mark, in particular, the extent to which the mark was recognized as well known by competent authorities;

(6) the value associated with the mark.

 

Leah Chan Grinvald argued in A Tale of Two Theories of Well-Known Marks, that case law in both China (see for example Ferrari vs Jiajian 2007) and the U.S. predominantly apply the Interactional Theory of Consumer Recognition instead of the Passive Perception theory, even though this goes beyond the threshold stated in Art. 16(2) TRIPS and except for Factor (1) of Art. 2(1)(b), Factors (2) to (6) all apply the Passive Perception Theory.

The Passive Perception theory views well-known trademarks as having acquired a unique status. Grinvald referred to Frederick W. Mostert, who argued in Well-Known and Famous Marks: Is Harmony Possible in the Global Village?(86 TRADEMARK REP. 103, 116–17 (1996)) that the evidentiary standard is quite low for internationally well-known trademarks  with a presumption in favor of the foreign well-known mark.  Instead, the Interactional Theory of Consumer Recognition needs to demonstrate some type of consumer-interaction with the trademark; such as purchases, inquiries, or website activity, according to Grinvald. In light of this distinction the 2014 threshold “thoroughly known” might point to a formalisation of such an interactional theory.

 

Take away

To register one’s trademark in China is preferable over relying on the well-known trademark protection. However, trademark holders should continue to monitor Chinese character versions of the trademark, and register defensively those that are obvious transliterations or phonetic transcriptions.


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CPD Course: Transnational Trademark Issues: Budweiser Conflicts May 17, 2014

By Dr. Danny Friedmann

 

I will give a course in Transnational Trademark Issues using the Budweiser Conflicts as an illustration, in the China Club Building (9th floor), in Central Hong Kong, this May 17, 2014 between 14.30-17.45.

More information you can find here.
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Blair and Huntsman: In China “Ethical” Multinationals Procure Counterfeit Items

By Dr. Danny Friedmann

 

The Report of the Commission on the Theft of American Intellectual Property which was written in May 2013 by  Dennis C. Blair (former Director of National Intelligence and Commander in Chief of the U.S. Pacific Command) and Jon M. Huntsman, Jr (former Ambassador to China, Governor of the state of Utah, and Deputy U.S. Trade Representative) includes  the following sentence:

 

In China, where many overseas supply chains extend, even ethical multinational  companies frequently procure counterfeit items or items whose manufacture benefits from stolen IP, including proprietary business processes, counterfeited machine tools, pirated software, etc.

 

One questions how many counterfeits an “ethical”  multinational company should procure before it is not considered an ethical multinational company in the eyes of the commission.

Read the report here.
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Fashion Law Conference (HKU) May 10, 2014

The University of Hong Kong organizes the conference ‘Charting the New Frontiers of Intellectual Property Protection of Fashion Brands and Designs’ May 10, 2014.  See the programme here.
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Ohio State University Economists: “Increase in Southern IPR Does Not Always Benefit North”

By Dr. Danny Friedmann

 

A never ending scholarly debate, put on the agenda by Professor Keith E. Maskus many years ago, about whether intellectual property rights harness or hinder Economic Development including Foreign Direct Investment from North (developed countries) to South (developing countries) has been enriched by Yuan Wang and Huanxing Yang (both Ohio State University, Department of Economics) with some interesting insights.

 

In their article ‘Foreign Direct Investment Cycles and Intellectual Property Rights in Developing Countries’ Wang and Yang distinguish between short and long run effects of IPR in developing countries.

 

Their model generates FDI cycles:

“[N]ew FDI, which brings new generations of products, occurs only when the technology gap between the South and the North exactly reaches some threshold. The FDI cycle length captures how frequent new FDI occurs, and in general determines the technology gap between the North and the South. Within this framework, we identify the short run effect and the long run effect of South IPR. In the short run (within each FDI cycle), a stronger IPR tends to discourage imitation and reduce South welfare. However, in the long run (across FDI cycles), a stronger IPR tends to reduce the FDI cycle length (FDI becomes more frequent) and increase South welfare.”

 

The authorse gave the following example of a FDI cycle in the automotive industry Volkswagen Passat’s production in China (see more here):

Volkswagen Passat B2 was introduced in Europe in 1981. Its variant Santana has been produced in China since 1986, and another variant Quantum was produced in Brazil from 1985 to 2002. In late 1980s, new generations of Passat, B3 and B4, were introduced in Europe (1988) and North American (1990). But they were never produced in China, and Volkswagen started to produce them in South America only after 1995. However, shortly after the newer generation of Passat, B5, was introduced in 1996 in Europe, Volkswagen started to produce it in China.

However, the big improvements in IPR in China came in the run up to WTO membership in 2001 and afterwards, so this example is probably in need of an update.

The conclusion of the study confirms previous findings that developing countries, and especially least-developed countries, each have different IPRs requirements to maximize their welfare.

 

According to Wang and Yang:

 

the “North does not always benefit from an increase in the Southern IPR. This is because an increase in the Southern IPR might reduce the equilibrium cycle length. In this case, FDI would occur more frequently, which reduces the expected length of the monopoly of any existing FDI, or the competition among different generations of the Northern FDIs is intensified.

 

Read Wang and Yang’s article here.
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IEEM IP Seminar 2014 Macau/Hong Kong

The Institute for Globalisation and International Regulation (IGIR) of the Maastricht University, led by Professor Anselm Kamperman Sanders, has organized this year a IEEM IP Seminar 2014 on Trade Secrets, Restrictive Covenants and the Knowledge Economy, Macau Cultural Center, May 19-20, 2014.

 

Then May 21, 2014, the Advanced Professional Update will be held (Programme for the IGIR -IEEM IPKM 2014) in association with the Hong Kong Intellectual Property Department. Read here more.
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IP Dragon Teaches CPD Course in HK: Transnational Trademark Issues: Observations from a Century of Budweiser Conflicts

By Dr. Danny Friedmann

 

In 2006 Professor Justin Hughes of Cardozo Law School wrote one of the defining articles on Geographical Indications: “Champagne, Feta, and Bourbon: The spirited debate about geographical indications”, you can find here and an excellent presentation here.  In his presentation Professor Hughes also mentions the Budweiser cases, starting at 42 minutes see here.

 

Dr. Christopher Heath of the European Patent Office, wrote a great chapter about “The Budweiser Cases: A Brewing Conflict”, in Christopher Heath and Anselm Kamperman Sanders (eds) Landmark Intellectual Property Cases and Their Legacy, 2011, 181-244, see here.

 

Inspired by Hughes and Heath this author is teaching on March 8, 2014 a CPD course (3 points) in Hong Kong for The Profectional Company, see here, on these Budweiser cases, since they are a great tool to teach about the following topics:

 

  • Rationales of Trademark Law
    1. By the end of this course the participants will know the rationales of trademark law, the essential function of trademark against confusion or a likelihood of confusion: source of origin, quality and product distinctiveness and their derivatives; the doctrines of sponsorship and affiliation confusion, initial-interest confusion, post sale confusion and reverse confusion will be all explained.
    2. Beside the “essential” function, the participants will also learn about the communication, advertisement and investment functions, and the measures against trademark dilution or a likelihood of trademark dilution, which can be crucial for the trademark proprietor.  There are two branches of the trademark dilution doctrine, which will be illustrated by relevant case law: trademark dilution by blurring and trademark dilution by tarnishment.

 

  • Characteristics of Trademarks
    1. Trademarks will be discussed in regard to different categories, each having very different characteristics: registered/unregistered, inherently distinctive/acquired distinctiveness, well-known/famous/reputable, collective/certification, appellation of origin/geographical indication.

 

  • New Challenges for the Trademark
    1. First the history of trademark infringement and trademark dilution will be highlighted in order to better understand the present situation.  This course will then elaborate on the challenges of two fundaments of trademark law; territoriality principle in regard to globalisation and the internet, and the specialty principle and the problems related to the Nice Classification. Alternative systems will also be reviewed.

 

  • Relevant Treaty Law for Geographical Indications
    1. The course will explicate how collective/certification trademarks, Paris Convention, TRIPS and Lisbon Agreements are relevant for the protection of Geographical Indications, the similarities and differences in the different jurisdictions will be discussed.  The participants will understand the relation and conflict between a normal trademark and a Geographical Indication.

 

  • European Intellectual Property Law
    1. This course includes a primer on EU IP law; the participants will understand the difference between regulations and directives, and how the National Courts of the EU, the European Court of Justice/Court of Justice of the European Union and the Advocate General of the CJEU and their relationships.

 

  • The Budweiser Cases
    1. After comprehending the aforementioned building blocks of the course, the participants will fully appreciate and comprehend the rich case law on the manifold Budweiser legal conflicts which will be reviewed.  By the end of this course, the participants will have an up-to-date knowledge of the ECJ/CJEU decisions and even an ECHR (human rights) judgment in regard to the Budweiser cases.

  

You can find more information on the course here.


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Guest Post: International Patent Filing Strategy Survey for Patent Attorneys in Biotech and Pharmaceuticals

By Richard Schurman

 

Dear IP Dragon readers,

 

A Team of law students, who are members of the Intellectual Property law Fellowship at the Thomas Jefferson School of Law in San Diego, California, are working on a Research Project directed toward aiding patent attorneys in developing international patent filing strategies for biotechnology and pharmaceutical companies. With the help of IP Dragon readers, the Team is working to amass statistically significant survey data on the countries patent attorneys are filing patents in for their biotechnology and pharmaceutical clients most often, and the factors considered when making the decisions to file.

 

As China institutes the universal healthcare program and modernizes its economy, the demand for biotech and pharmaceutical products will likely increase. With increased demand, the market competition and incentive for companies to patent their research and products will likely increase as well. Once the results of the survey are published, policy makers will have more information on the factors patent attorneys from different countries consider most important when making their filing decisions. The results will also give Chinese patent attorneys better information as to where in the world they can promote their legal services and partner with foreign law firms for patent applications being filed in China. Responses from Chinese patent attorneys will be particularly valuable to see where the growing life sciences sector in China intends export its new products.

 

The survey is open to patent attorneys from any country who prosecute patents in the biotechnology of pharmaceutical sectors. The survey can be found by following the hyperlink below. All personally identifiable information will be kept confidential. It should take approximately 15 minutes to complete. As a token of our gratitude for completing the survey, respondents have the voluntary option of entering in their email address to receive the survey results when they are released, and to be considered in a drawing for one of several gifts.

 

Survey Link: http://edu.surveygizmo.com/s3/1465783/WHERE-TO-FILE-A-Framework-for-Biotechnology-and-Pharmaceutical-Companies-to-Develop-an-International-Patent-Filing-Strategy

 

If you would like more information or have any questions about this project please visit: http://www.tjsl.edu/news-media/2013/10478 or email one of the team members directly at: schurmrh@tjsl.edu. The results of the survey will be released on April 11, 2014, in San Diego, at a public seminar event with panel discussions on the evolving field of international patent law.

 

Thank you for your time and thank you to IP Dragon for allowing this guest post.

Richard Schurman


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Baidu In Search of Copyright Solutions After NCA Fine, and Lawsuits May Follow Suit

By Danny Friedmann

 

Baidu Inc. and QVOD were each fined 250,000 RMB on December 27, 2013 for copyright infringement by the National Copyright Administration of China (NCA) and had to enjoin their infringing activities. The NCA started the investigation on November 19, 2013 after receiving complaints from Youku Tudou (since the merger in 2012 China’s biggest video website operator), LeTV, Sohu, Tencent, MPA, CODA, Wanda Films and Enlight Media; that Baidu Video, Baidu TV Stick, Baidu Yingyin media player and Baidu Video mobile app had infringed their copyrights. The complaints were also directed against QVOD, another software video player.

 

The Global Times reported that the 250,000 RMB was the highest fine the NCA could give to Baidu and QVOD. However, this would be only correct if the illegal earnings were no more than 50,000 RMB. If the illegal revenues exceeded 50,000 RMB the maximum is five times the amount of the illegal revenues, and they can also confiscate the equipment such as computers that is mainly used to provide the network service.  See Articles 18 and 19 Regulation on the Protection of the Right to Network Dissemination of Information (updated February 25, 2013 by Bridge IP Law).

 

Wang Fan wrote for the China Daily here about a campaign to deter illegal streaming of unauthorised videos in June, when 20 video website operators had to submit documents to the NCA to demonstrate that they had authorisation to stream 2,374 different films and television programmes.

 

250,000 RMB? What happened to the claim of 300 million RMB?

The administrative route is a relatively time and costs efficient mode of enforcement in China, but it lacks the remedy of compensation of damages. Therefore it was to be expected that on November 13, 2013, a consortium of video companies announced at a press conference at the Beijing Shangri-La that they were going to file a lawsuit against Baidu and claim 300 million RMB in damages. Paul Bischoff of Tech in Asia reported that Youku Tudou (since the merger in 2012 China’s biggest videosite), LeTV, Sohu, Tencent, CODA, Wanda Films and Enlight Media and other video companies were unified in the “China Online Video Anti-Piracy Alliance”.
According to Eric de Fonenay of MusicDish, Capital Copyright Industry Alliance Capital Protection Division, the China Radio and Television Association of the Television Production Committee, and many Chinese production companies gave acte de présence, see here. The Motion Picture Association of America (MPAA), Sony Pictures Entertainment, Warner Brothers, Disney and Paramount were present too, see here, although, according to Brid-Aine Parnell of The Register, the MPAA did not join the copyright infringement claim, see here. Ms Parnell wrote also that the alliance had tried to negotiate with Baidu, to no avail, because according to her Baidu would not agree to rules on violating copyright unless QVOD did the same.

 

Baidu argued that it took already four steps towards mitigating piracy: Research and development into an automatic piracy filtration system; Open complaint channels where a 24-hour team reviews reports of pirated content and consequently removes it; recommending high quality genuine content to steer users away from pirated material and Baidu’s web search will stop linking to pirated video sites.

 

Copyright infringement? Taking unfair advantage? 

 

According to Global Times’ Li Qiaoyi Baidu and QVOD were “identified as the top two violators of copyrighted video content for 2013” by Yu Cike, head of the department of copyright management, of the NCA.

 

The claim against Baidu and QVOD was that they deeplinked to copyrighted videos without authorisation: in other words that copyrighted content of third parties were directly accessible via Baidu or QVOD video players. This way, the rights holders were deprived of their right to communicate their works, performances or audio-visual recordings to the public (conform Article 8 WIPO Copyright Treaty to which China is a member since 2007, compare the language used in Article 26 Regulation), and internet users never had to visit the third parties’ sites, and devoid of advertisements on those sites. At the same time Baidu and QVOD were taking unfair advantage of the content, storage and bandwidth of the rights holders of the videos.

 

One can argue that the CJEU rule that “transmission and retransmission of works (even where those [users] streaming the content were legally permitted to view the original broadcast) constitutes a “communication to the public”, can be applied in this case as well. Read Annsley Merelle Ward’s analysis at IP Kat.

 

China has safe harbour provisions for online (network) service providers against secondary liability in case of copyright liability, comparable to the DMCA in the US (the E-Commerce Directive in the EU works horizontally, and is applicable to trademark infringements too, and is not just applicable to copyright infringement, anti-circumvention and technological adjuncts). Articles 18 (1) and 19(2) Regulation state that the network service provider is liable for copyright infringement if it is providing works, performances, or audio-visual recordings to the public through the information network without permission; and is obtaining economic benefits. The safe harbour provisions are not providing immunity against liability in case of actual or constructed knowledge, see Articles 22 (3-4), 23 Regulation.

 

Another claim was that Baidu provided access to video sites that host pirated content and do not have official licensing to operate in China. It was also stated that Baidu was profiting from advertising revenue sharing agreements with such sites.

 

Professor Eric Priest of the University of Oregon School of Law sets out in ‘The Future of Music and Film Piracy in China‘, that the conflicts about piracy of videos (at least for the part that are permitted by the Chinese authorities) could be prevented if China would apply an Alternative Compensation System (ACS) (where for example a percentage of the costs of an internet subscription via a fixed line of mobile will be redistributed to the rights holders in the relation to the usage of their works). The future Professor Priest outlined in his 2006 publication in Berkeley Technology Law Journal, is still worth considering today. The Institute for Information Law (IViR) in Amsterdam is doing a comprehensive study between 2012 and 2015 on ACS under the guidance of principal investigator Professor P. Bernt Hugenholtz, see here
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Participate in IP Dragon’s CPD Course on Century of Budweiser Conflicts: Hong Kong March 8, 2014

March 8, 2014 Danny Friedmann will give a course on Transnational Trademark, and deals with the observations of a century of Budweiser conflicts.

 

This course will provide an insight into transnational trademark law.  The trademark law in Hong Kong will be used as a reference point: to clarify the differences and similarities between the Hong Kong, EU and US systems.

 

The course will illustrate transnational trademark law in the process via the ongoing legal battles between the US and Czech beer breweries in many jurisdictions all over the world.  Rationales of trademark law, trademark categories and new challenges for the trademark are building blocks to comprehend the cases that will be used.  The case law, including that of the CJEU, makes clear that beside trademark law, EU regulations about Geographical Indications, the Lisbon Agreement to Protect Appellations of Origin, contract law and bilateral agreements are all relevant factors to the matter.

 

If you are interested in IPR, CPD points or beer, this course is for you. At a great location: The Chinese Club of Hong Kong in Central. See the curriculum of The Profectional Company course, and participate now here.


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Divergence of US and UK Policies in Regard to IP in China: Pressure vs Papering Over the Cracks

By Danny Friedmann

 

China’s increasing economic power keeps on rumbling. While the US and UK seemed like identical twins in regard to foreign policy during the Bush-Blair era, recently the Anglo-American unity in regard a policy towards China seems to be diverging. David Cameron, the UK prime minister and leader of the Conservative Party, has jumped on the seemingly unstoppable train of China’s economic successes (according to Cameron: “Last year China became the world’s largest trading nation. Next year China is set to become the world’s largest importer of goods and later this century it will become the world’s biggest economy.”), while the US  and also the other EU countries, seem to be more circumspect.

 

Cameron’s message to open up the EU for trade with China coincides with the UK’s biggest trade delegation ever to visit China (131 persons). The IP industries are well represented: executives from the automotive industry which is IP intensive (Jaguar Land Rover),  Royal Dutch Shell (patents), GlaxoSmithKline (patents), TalkTalk (music copyright) and the football Premier League (copyright and broadcasting rights), TV producer Peter Bazalgette (formats/copyrights), etc., read more here.

 

See James Chapman’s article ‘China’s an opportunity, not a threat, gushes Cameron: PM uses interview to say nation’s rise is a ‘defining fact’ of our age – even if the West doesn’t like it’ for the Daily Mail, see here.

 

Chapman wrote: “Mr Cameron is also promising to speed up the process for patents so that businesses concerned about the economic impact of intellectual property infringement in China, estimated to cost from tens of millions to several billion pounds. In 2012, 1 in 4 UK businesses were put off doing business overseas due to concerns around intellectual property theft.”

 

Gary Locke, the US ambassador to China, articulated a similar concern perceived by US businesses that operate in China. According to Edmond Elococo: “There is still a long road ahead before right holders in China can feel confident that their IPR will be both fully protected under the law and effectively enforced,” Locke told the 2013 U.S. Ambassador’s Intellectual Property Rights Round-table. At the same time, he said China’s enforcement regimes are “clearly moving in the right direction.” Elococo’s article for Bloomberg News here, and he notes that Locke argued that China’s IP lacks transparency and consistency (which is a recurring theme at IP Dragon and in ‘Paper Tiger or Roaring Dragon, China’s TRIPS Implementations‘).

 

 

 

 

 

 

David Cameron, UK Prime Minister

The differences in emphasis might be summarised as follows: The UK sees the status of China as an economic superpower as a fait-accompli or at least a seront accomplies and even though UK businesses perceive that their IP is not adequately protected in China, the UK government does not want to pressure China to improve its IP regime and implicitly seems to encourage the UK businesses to find a way to deal with it. And regardless the effectiveness of China’s IP regime, the UK is advocating an EU free trade agreement with China. Chapman argued that other EU countries feared that this will result in cheap and fake products originating from China flooding the EU market.

The US government is stating more neutrally that China’s IP is transparent nor consistent and that US rights holders do not feel confident that their rights will be effectively protected and enforced, and it seems not to be afraid put pressure on China to further improve its IP system.

 

Locke’s remarks proved to be sensitive for Foreign Ministry spokesman Qin Gang:  “We hope that the U.S. can be more objective and fair in understanding this. We hope that relevant countries can strengthen dialogue and not keep applying pressure and blame.”

 

In your opinion, what will be the most successful approach to improve IP enforcement in China: more trade or more political pressure? And is it fair that the UK government is not willing to exert pressure, and therefore probably landing lucrative trade deals with China, but if US pressure is successful it benefits from this as well?

 

 

Gary Locke (US Ambassador to China, since 2011) and John Locke (English philosopher of the Enlightenment and writer of Two Treatises of Government, which includes Locke’s theory on property, 1689)  two advocates of the protection of property, which one can argue includes intellectual property rights. 
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Peter Cheung Encourages Companies to Register Smell Marks in Hong Kong

At the HK/EU Expert Conference on cooperation in protecting and developing IP and brands at the beginning of this month, Peter Cheung, director of Intellectual Property Department (IPD) of Hong Kong SAR, is demonstrating that he is a man of all seasons in regard to encouraging smell marks in Hong Kong. Under the name Fragrant Hong Kong, which is a well chosen pleonasm since Hong Kong already means “fragrant harbour”, each season has its own activities to raise awareness about and interest in smell marks, see here, suggesting that a company can provide a good with different smells for different seasons.  One of the non-traditional marks Hong Kong allows is the smell mark (Cap. 559 Trade Mark Ordinance of Hong Kong, Section 3(2). Like any trademark it should be distinctive. Applicants cannot just provide a chemical formula, but must also give a description that is clear for members of the public looking at the electronic register exactly what the mark is being applied for.

 

香 heung/xiang= fragrant

 

港 gong/gang =  harbour

 

香港= Hong Kong (En), Heung Gong (Cant.), Xiang Gang (Cn)= fragrant harbour

 

The IPD’s philosophy is that companies can compete using all sensory stimuli in their goods and will organise the Global Sensory Branding Forum in Hong Kong in 2014.  
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Albert S.K. Ho of Hong Kong Customs Gives Preview of the Future of Enforcement, Including 3D Printing

During the IP HK-EU Series 2013 Expert Conference, which was entitled “Hong Kong – European Union Cooperation in Protecting and Developing Intellectual Property and Brands: Current Situation and Future Trend”, September 2 at the Hong Kong Baptist University, Albert Ho, Assistant Commissioner, Intelligence and Investigation Branch, Hong Kong Customs and Excise, shared some great ideas that would help right holders worldwide enforce their rights in Hong Kong.

 

Innovative rights holders can stay one step ahead the producers of counterfeits, but they have to inform the customs of how to distinguish between genuine and counterfeit products. The practice was that a representative of the rights holders goes to the customs and checks whether the products are genuine or not, or gives the customs training to be able to do this by themselves. Hong Kong Customs and Excise has been thinking outside of the box about ways that rights holders outside Kong Kong can help determine Hong Kong Customs what is counterfeit.

 

 

Hong Kong Customs and Excise is developing electronic recordation of the goods;
A video-link could be established between Hong Kong Customs and the rights holder, so that the latter can virtually examine whether the goods are counterfeit;
The rights holder can send the design file of their product which includes some indicators that distinguish genuine from counterfeit to Hong Kong Customs, which they subsequently can print out via a 3D printer.

 

“New at IP Dragon: HK Customs will experiment with 3D printing to enforce”  http://clicktotweet.com/ vBdTq


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Government Asks Popular Weibo Users to Take National Interest into Account When tweeting

In the wake of a prostitution scandal involving a famous investor (Xue Manzi) and the trial of the former secretary of the Communist Party in Chongqing on the suspicion of corruption (Bo Xilai), the Chinese government via the People’s Daily urged popular Weibo accounts (China’s version of Twitter) that have more than a million followers (also known as 大 V (Big Verified) Weibo users) to take the national interest into account when tweeting. Read Brian Spegele’s article for China Real Time (WSJ) here.

 

By listening to what the population is tweeting and sometimes to act upon public outcries the Chinese government is experimenting with a selective direct digital democracy. But as the exhortation in the People’s Daily shows it wants to use the Chinese twittersphere not just passively but also actively as an instrument to influence the people.

 

Read Danny Friedmann,  Paradoxes, Google and China – How Censorship Can Harm and Intellectual Property Can Harness Innovation in GOOGLE AND THE LAW: IT AND THE LAW, (Aurelio Lopez-Tarruella, ed., TMC Asser, 2012), here.


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Sapping Tesla Motors’ Battery by Squatting its Well Known Mark In China

Tesla Motors planned to sell its Model S in China as of 2013. It’s already doing so in the U.S. and Europe. However, the sale of the cars, made in California and the Netherlands, have been stalled allegedly partly by a trademark squatter/troll or more politically correct “an entity using the trademark not in a trademark sense”.  Reuters wrote that Zhan Baosheng registered the Chinese trademark in 2006 for a logo at Jinda Trademark agency in Guangzhou, that seems identical, apart from the TESLA lettering which is a bit different. The car on the Zhan’s Tesla Motors site is similar to Tesla Model S, is likely to confuse consumers and it seems not too difficult to claim copyright infringement.

 

What about trademark infringement?

 

Article 14 of China’s Trademark Law states:

Account shall be taken of the following factors in the establishment of the well-known mark:

1. reputation of the mark to the relevant public;

2. time for continued use of the mark;

3. consecutive time, extent and geographic area of advertisement of the mark;

4. records of protection of the mark as a well-known mark, and;

5. any other factors relevant to the reputation of the mark.

The trademark Tesla has been used since 2003. One can argue that at least the last 7 years it has a reputation world wide in the market for electric cars.  One can also argue that the defendant by setting up a site with copyright infringing computer renditions of a car similar to Tesla Model S has not really made use of the trademark in the trademark sense (has not made use of the trademark in the course of trade).  Article 41 Trademark Law explicates that if a well known mark was registered in bad faith the limitation to dispute the approval of a trademark with the Trademark Review and Adjudication Board (TRAB) does not count.

Danny Friedmann

 

 

 

 

 

 

 

 

Read also Reuters’ article written by Norihiko Shirouzu and Samuel Shen here. More about Well known trademarks in China, read Wan Jun’s terse article Well-known Trademark Certification: Practical Thinking of “Dual-track System” in China IP Magazine, here. Or Jing “Brad” Luo & Shubha Ghosh”s scholarly work “Protection and Enforcement of Well-Known Mark Rights in China: History, Theory and Future”  in the Northwestern Journal of Technology and Intellectual Property 2009, see here.


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China and Indonesia Will Cooperate On IPR

China and Indonesia just signed a Memorandum of Understanding (MOU) on IPR cooperation, see here. In regard to the necessity of the protection of traditional knowledge and genetic resources China has found an ally in Indonesia.

 

Peter Leung of Managing IP wrote the blog post Intellectual Property with Chinese characteristics about China’s more assertive stance in regard to international IP standards. That while smaller countries work to comply to international IP standards, “China, while also doing that, has also the clout to change the standard themselves.” 

 

It will be interesting to watch whether cooperation with countries such as Indonesia can help in accomplishing China’s goal of  establishing traditional knowledge and genetic resources as an international IPR norm.

 

 

 

 


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Happy Dragon Boat Festival! 端午节快乐!

 

 


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Imbalance in China’s IP Development Points to Relevance of Location, Location and Location

Where in China are my intellectual property rights most safe, or where in China can I enforce my IPRs best in case of an infringement or commercial dispute? To answer these questions one should ask first where is intellectual property most developed in China? You mean where in China do they most apply for patents registration, trademark registration or software copyright registrations? Or where these were most granted? Or where they enforce intellectual property infringements the most? But if they enforce intellectual property the most, does that mean that that region has the most infringements? Each question poses new questions. To be able to answer the first question “where is IP most developed in China” will remain complex.  One can argue that it has to do for the most part with the experience, education and fairness of the People’s courts; are they prone to corruption or local protectionism (localism), can they make impartial independent non-political decisions?

 

To reduce the complexity and come up with a workable answer IP Dragon has consistently written that Beijing, Shanghai and Shenzhen have the best People’s courts for IP litigation, based on research and experiments of people in the field. The National Intellectual Property Development and Research Center (国家知识产权发展研究中心) of the State Intellectual Property Office (SIPO) seems to confirm this. It published a report about the intellectual property development in different regions in China in the five years between 2007 and 2012.

 

The report ranked provinces and cities based on:

 

  • 4 primary indicators (creation, utilization, protection, environment); 10 secondary indicators and 40 tertiary indicators.
The results are not surprising:
Top 10 ranking
1. Guangdong province
2. Shanghai
3. Beijing
4. Zhejiang
5. Jiangsu
6. Shandong
7. Fujian
8. Hubei
9. Anhui
10. Sichuan
Numbers 1 to 7 (except for the capital Beijing) are all located at the east coast of China, and which are most economically developed. There is a clear parallel between the inequality between economic development in the east and west of China (Candelaria, Daly and Hale wrote more about the persistent regional inequality in China here (2013)  and the imbalance between the IP development in the east and west of China which can be expressed in IP development indices.
Wages are of course lowest in the regions that are less economically developed. Therefore, the choice for certain activities such as manufacturing at a location with low wages should always be weighed against the concomitant IP risks.

 

Read the 2012 National Intellectual Property Development Report (2012 年全国知识产权发展状况报告) here in Chinese.

 


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Supreme People’s Court: More Grassroots Courts Must Deal With Design and Utility Patents

Litigating intellectual property rights, especially patents, requires quite some specialised expertise. For a long time, therefore, patent disputes were dealt with by people’s intermediate or higher courts.  But since ever more Chinese companies are patenting their design patents, utility patents and invention patents, in many cases subsidised by the government, the work load of these courts have been growing correspondingly.

To see whether some of the work load, namely the design patent and utility patent cases, that are generally deemed more simple, can be transferred to “grassroots”  courts, such as district and municipal courts, a pilot programme was started in 2009 at  Haidian District Court in Beijing, Yiwu Municipal People’s Court in Zhejiang Province and Kunshan Municipal People’s Court in Jiangsu Province, which was considered successful, so that now the Supreme People’s Court has announced here (Chinese) to expand the number of  grassroots courts that can deal with intellectual property rights cases.

The argument that now the experience with IP is bigger and that many judges have more expertise in this field. But the question remains how the judges of these grassroots courts can have built up expertise with IP cases, unless of course they have worked at a people’s intermediate or higher court before.


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Enterprise Name vs Trademark Case Makes Grandma Even More Spicy

In the Chinese language grandmother is pópo (婆婆) and a spicy grandmother is là pópo (辣婆婆). As you would already expect it is a bad idea to fool around with the feelings of a spicy grandmother.  Spicy Grandmother, the enterprise name of a chain of restaurants in Beijing, was annexed without permission in the trademark logo of  Yu Xiang Spicy Grandmother (Yú xiāng là pópo 渝乡辣婆婆), a competing chain of restaurants in Beijing and Shijiazhuang.

 

Spicy Grandmother sued but lost the case in first instance. They appealed at Beijing No. 2 Intermediate People’s Court, which will rule on the case.

Source IPR in China here.


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Ring the Right Bell for Enforcement of IPR in China

Christian Nowak, Science and Technology Adviser of BEA (Bureau d’Electronic Appliqué), a Belgian company that manufacturing sensors for especially doors.  BEA is active in China since 1996.  First only with a representative office. But the smart thing BEA did was they registered their invention patents and design patents and a trademark in China.

In 2002, BEA discovered that their product was copied.

China IPR SME Helpdesk posted a video of Nowak explaining how BEA dealt with the case.

According to Mr Nowak he went to a patent attorney, who advised him to go to the State Administration for Industry and Commerce.  “And on Monday Morning we were in Shantou city, north of Hong Kong, ringing the bell of the State Administration of Industry and Commerce and requesting the manager in charge of the patent infringement.

Say what?

Mr Nowak must have mistaken the State Administration for Industry and Commerce (which is in charge of trademark infringements) with the State Intellectual Property Office (which is in charge of patent infringements).

The raid by the State Administration for Industry and Commerce, or more likely, the State Intellectual Property Office, was successful.

 

Mr Nowak is enthusiastic about the administrative enforcement route and says that litigation costs too much time and money.  If it is simple straightforward case the administrative enforcement route might be recommendable. The real question is, however, whether the activities at the infringing premise will not be resumed a little bit later somewhere else. To avoid this waterbedding effect, one might want to really strike hard at the infringers, piercing the waterbed so to say.  A big advantage of the litigation enforcement route is that damages can be compensated. Then there is the criminal enforcement route, which can put the infringer behind bars, but which of course has higher evidentiary thresholds.

Here are some of the administrations one can go to to enforce one’s intellectual property rights:

- State Administration for Industry and Commerce (SAIC) = trademarks

- Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) = in case of shoddy goods

- State Intellectual Property Office (SIPO) = invention patents, utility patents, design patents

- National Copyright Administration of China (NCAC) = copyrights and neighbouring rights

- General Administration of Customs = for all kinds of IPRs

- Public Security Bureau (PSB)/People’s Procuratorate Bureau (PPB) = in case of criminal enforcement

 

To give you a primer on how to enforce and who can help you enforcing your IPRs in China, read:

How to work within China’s IPR enforcement system for trademark and design rights

How to Prevent and Act Upon Intellectual Property Rights Infringements in China.

 


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EUCCC study: Nothing New Under the Sun: Quotas Lead To Bad Patent Quality and Indigenous Innovation Policy Is Still Active

Dan Prud’homme of the European Chamber of Commerce in China wrote a study called Dulling the cutting edge: How Patent-Related Policies and Practices Hamper Innovation in China.     To summarise 226 pages: Prud’homme basically says that China’s patent promotion policy which includes quotas per 10,000 people is not conducive to quality and he asserts that […]

After 30 years Trademark in China More Important Than Ever

The Supreme People’s Court commemorated the first Trademark Law of the People’s Republic of China in August 1982, see here. Remember 1982? It was the year when Deng Xiaoping was in power at the Zhongnanhai, Reagan in the White House and Brezhnev in the Kremlin. Deng had set out a new course for China in […]

Confusion of Tongues in China and Counterfeiters as Arbitrageurs of Language

Counterfeit trademarks in China: Castel’s “uniqueness is arrested”, Penfolds has become victim of “get rich in a hurry”   By Danny Friedmann   Until the majority of the Chinese population is more familiar with foreign brand names, foreign brands should take the destiny of their own brand in China in their own hand. If foreign […]

International Trade Law Prominent in National Law of People’s Republic of China


Professor Thomas Cottier, managing director of the World Trade Institute (WTI) and Swiss National Centre of Competence in Research (NCCR) Trade Regulation shared his expertise on international trade law at the Summer Programme organised by the WTI and CUHK in Hong Kong.

Professor Cottier covered the international framework for IP protection, from the Paris Convention to the TRIPs Agreement, and about intellectual property in a trade law setting, and the crown jewel of the WTO: its effective dispute settlement.

After professor Cottier’s lectures one realises in a profound way that the life of international law is in its national law. China’s system is monistic, in that international law rules supreme over its national law.


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Things to do in the Summer, CHECK: WTI/CUHK Summer Programme on Intellectual Property in HK

IP Dragon spent his holiday participating in the WTI/CUHK Summer Programme on intellectual property, indeed co-organised by the World Trade Institute in Bern and Chinese University of Hong Kong, from July 9 -20.

 

The coming days I would like to give you an overview of some of the things, relevant to intellectual property rights in China and Hong Kong, I learned from professors Thomas Cottier (WTI) see here, Arno Hold (WTI), Michael Pendleton (CUHK), Bryan Mercurio (CUHK), Peter K. Yu (Drake University), Elliot Papageorgiou (Rouse), Mathias Schaeli (Swiss IPI), Philip Monaghan (Mayer Brown) and last but not least Ron Marchant (former head of IPO UK).  Beside getting updates on bilateral and multilateral treaties, WIPO, WTO, law in China and Hong Kong, the event brought professors together from Bangladesh, China, India, Indonesia, Laos, South Africa, Switzerland, Trinidad and Tobago, and Vietnam, to discuss intellectual property and policy issues.

 

 

 


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Counterfeiter Burgundy Wine Is No Connoisseur, But Neither Are Many Chinese Consumers, Yet

The French newspaper Le Midi Libre reports about a wine from the domaine de la Romanée Conti à Vosne-Romanée which was counterfeited in China.  Oftentimes the counterfeiters manufacture a product that is almost identical to the genuine product. However, this time the counterfeiters are no connaiseurs. Unfortunately many people in their target market, China, also lack […]

Grading Chinese Provinces and Cities for IPR Protection But Not Enforcement Useful Exercise?

Danny Friedmann

 

The goal of the China IP Index is to “assess and analyze the different development status of intellectual property capacities in 31 provinces and municipalities of China through setting up a scientific, systematic and formal system.” The result, that only focuses on protection (namely application and registration) of IPRs and not on enforcement and excludes the whole category of copyright is claimed to be of “substantial significance”, by the researchers of the index here. Whether this is justified will be questioned after an overview of the ranking.
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Plethora of Comments Delayed Release Second Draft Revised Copyright Law

Later in June or beginning of July the National Copyright Administration of China (NCAC) will release the second draft of the revised Copyright Law. The first draft of the revised version was released March 31, 2012, see here. The NCAC announced that 81 of the 88 provisions will be changed. This as a reaction to […]

Directly After China Comes Germany As the Country of Origin of Most Copycats Found on German Market in Capital Goods Industry

EBM Papst Group, producer of energy-saving fans and motors has set up an assembly line in Shanghai. They have invested 8 million U.S. dollars in their activities in China, trying to stay ahead of the competition and preventing IPR infringements. Hans-Jochen Belike, general manager of EBM Papst has experienced infringed ventilators in China and Germany, […]

FIRST INTERNATIONAL IP TREATY BORN IN CHINA: Beijing Signed Beijing Treaty on Audiovisual Performances

IP Dragon Alert The Chinese delegation has signed the Beijing Treaty on Audiovisual Performances ( 视听表演北京条约) on June 26, 2012, read the Chinese article here. It’s the first international intellectual property treaty that was “born” in China. World Intellectual Property Organization (WIPO), who convened the Diplometic Conference, gave the following statistics: – 156 member states; 6 intergovernmental […]

Who Cares About Human Rights If You Have Intellectual Property Rights

Senator Tom Coburn of Oklahoma said after visiting China, that a country that doesn’t protect human rights would have no respect for IPR and other minor rights, according to Liu Kin-ming in a Hong Kong Standard article. But why have an either or solution? The State Council approved and authorized the National Human Rights Action Plan of China (2012-2015)国家人权行动计划 […]

Prof. Mercurio: In Analyzing IPR in China One Should Distinguish Between Trademark, Copyright and Patent Law

Professor Bryan Mercurio, specialist in international economic law, with particular expertise in WTO law, free trade agreements and the intersection between international trade and intellectual property law and Associate Dean of Chinese University of Hong Kong, has written an interesting brief: ‘The Protection and Enforcement of Intellectual Property in China since Accession to the WTO: […]

We take YOUR questions!

IP Dragon has received many questions and answered them privately. Now we would like to invite you to come up with a question you want answered publicly. During the next IP Dragon Roar podcast Danny Friedmann will answer some of them.

 

Please let us know whether you want to stay anonymous or not.

 

Send your questions to:  info@ipdragon.org
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Demystifying Intellectual Property Rights With Professor David Llewelyn

Professor Llewelyn before a scholarly audience, including professor Barton Beebe on the right

 

 

Professor David Llewelyn’s latest presentation did not miss to resonate with a scholarly audience. The earlier presentations IP Dragon attended included the highly relevant topic such as “Leveraging your IP” and testified an ability to clarify in a concise way, such as explaining all IP in one hour.  This time professor Llewelyn spoke at the ‘Charting the New Frontiers of Intellectual Property Protection of Luxury Brands’, June 16, 2012 at HKU.

 

 

IPR is getting too complex

As the last speaker of the day professor Llewelyn gave his view unapologetically on the previous presentations which included a deluge of social theories:  “Veblen? Intellectual property rights are already too complex.”
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We Take YOUR Questions

IP Dragon has received many questions and answered them privately. Now we would like to invite you to come up with a question you want answered publicly. During the next IP Dragon Roar podcast Danny Friedmann will answer some of them.

 

Please let us know whether you want to stay anonymous or not.

 

Send your questions to:  info@ipdragon.org

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The Making of the Beijing Treaty: Actors’ Rights Feature in Capital

There is a Diplomatic Conference on the Protection of Audiovisual Performance going on. Convened by the World Intellectual Property Organization and hosted by the People’s Republic of China. It started June 20 and will be concluded on June 26, 2012.  After 12 years the Audiovisual Performances Treaty got a new lease on life. Professor Justin […]

Protection of Trademarks in China Is Not Problematic, Prof. Peter K. Yu Explains Why

Saturday IP Dragon was at the conference ‘Charting the New Frontiers of Intellectual Property Protection of Luxury Brands’ organised by the University of Hong Kong. Professor Peter K. Yu of Drake University Law School, Des Moines in Iowa, U.S., gave an insightful presentation on some of the complexities of counterfeiting in China.

 

 

Already in 2005 Ernst & Young suggested that the luxury industry in China would first grow 20% per year and between 2008 and 2015 with 10% until sales would exceed 11.5 billion U.S. dollars in 2015 and “Chinese consumers could be as influential as the Japanese and account for 29% of all global luxury goods purchases. A temporary obstacle seems to be counterfeiting.
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IP Dragon Roar Podcast 2 “Spirit, Software, World of War Craft, Compulsory Licensing”

Here is IP Dragon Roar’s second podcast about “Spirit, Software, World-of-War Craft, Compulsory Licensing”.     First Jamon Yerger and Matthew Kowalak discuss the following blog posts:     Stir up people to innovate by slogan or by a change of culture Supreme People’s Court Took AMSC v. Sinovel Wind Group Case On Software Copyright Infringement Trend […]

Measures for Compulsory Licensing of Patent Implementation 2012 added to IP Dragon Laws and Regulations Update

IP Dragon has translated the Measures for Compulsory Licensing of Patent Implementation 2012, and added the English and Chinese version to IP Dragon Laws and Regulation Update.
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