Professor Bryan Mercurio on Patent Law: “One Size Does Not Necessarily Fit All”

20150116_104630

 

Professor Bryan Mercurio (photo), Vice Chancellor’s Outstanding Fellow of Faculty of Law of the Chinese University of Hong Kong discussed “Amending the TRIPS Agreement to Promote Innovation” and posed some interesting What if… questions.

Professor Mercurio went directly to the point:

Since there is no conclusive answer to the question whether IP stifles or stimulates innovation, scholarship gives a mixed results depending on a multitude of factors, he wisely recommends further research on the correlation or causal relationship between IPRs (particularly patents) and innovation, including indirect benefits for innovation which patent protection may provide.

Professor Mercurio recommends to re-evaluate the purpose of the TRIPS Agreement. Is innovation a core part of the Agreement? And one should consider adding more detail to Article 27 (1) so as to ensure that it compliments rather than hampers innovation.

Professor Mercurio poses the question whether the current scope and duration of patent protection is suitable for all industries and sectors or whether some differentiation would benefit innovation. Professor Rader disagreed and tried to illustrate it with an example about fat cells in your chest and that the invention cannot be caught by one technology but moves across technologies. It seems to me that Professor Mercurio’s one size does not fit all, makes more sense. One could for example make the duration dependent to the redemption date of the investment plus some profit.

Another sound proposal of Professor Mercurio is adding a more direct and enforceable mandate in TRIPS in regards to patent protection, competition and innovation.

See Professor Mercurio’s slides here: http://www.lawtech.hk/wp-content/uploads/2015/01/Bryan-TRIPS-and-Innovation_HKU.pdf.

 

See more of the Worldwide Patent Law Reform and Hong Kong’s Response HKU Workshop here: http://www.ipdragon.org/2015/01/17/worldwide-patent-law-reform-and-hong-kongs-response-hku-worksop/

 


continue reading…

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.


continue reading…

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. 
continue reading…

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.


continue reading…

Trademark Logo Goes Up in Smoke To Save Australians? Let’s Check The HK-Australian Bilateral Investment Treaty

How to warn peopleagainst blindness who cannot do not want to see? Cigarette manufacturer Philip Morris was not amused when Australia announced last November 2010 that it would prohibit brand logos on cigarette packets, to prevent exposure to children that might be lured to the flames of eternal damnation. Smoking kills 15,000 deaths in Australia each year. According to the […]

Best of Google’s White Paper: Censorship is Hurting China’s Economy

Intellectual property and market access are interdependent subjects. If there is a barrier to the free flow of information (the market access is challenged, regulated or censored when it refers to copyrighted goods), no intellectual property can be exploited and this will feed a demand for pirated works and counterfeit products. Google has problems accessing […]

What Can A Famous Food Brand Do Against Footwear Using Its Mark?

As a vegetarian I do not frequent the many McDonald’s fastfood joints that can be found in China and which turn the slim people obese, just as they did with the American and European populations. I am not really certain what is on sale inside a McDonald’s, but when I was in Shenzhen near the […]

Murdoch, Procrustus and the WTO Copyright Cases

October 12, Sky Canaves of the Wall Street Journal has an article about Rupert Murdoch who is urging China to enforce copyright piracy and open up its market for copyrighted products. See here (or on page 8 of the printed WSJ). Mr Murdoch used the World Media Summit in Beijing to tell the Chinese leadership […]

Supreme People’s Court of China: “Current Economic Situation Makes Granting IPR Injunctions More Difficult”

December 2008, I dealt with the ‘Influence of the Financial Crisis on the Enforcement of Intellectual Property in China‘. In this post I wrote:In China there are still villages dependent on the production of counterfeit and pirated goods. The incentive for the Chinese government to enforce intellectual property and make these people de facto unemployed […]

Taylor Wessing Global Intellectual Property Index and China: The Last Shall Be The First

The People’s Republic of China was ranked last (24th position) in the Taylor Wessing Global Intellectual Property Index 2009, see here. The methodology of the GIPI rating is a calculation by a factor assessment model with jurisdiction assessments and instrumental factors as input. See the methodology here.  About China’s trademark system Taylor Wessing complains about the delay […]

Do ACTA Member Countries Want to Confront China With A Fait Accompli?

Since April 9, when I blogged ‘China and ACTA: Why the problem is not made part of the solution‘, new information about the Anti-Counterfeiting Trade Agreement (ACTA) has leaked, see Wikileaks here. It makes you realise how transparent the founding parties to ACTA want to be. Compare the United States Trade Representative posting a 6 […]

China and ACTA: Why Is The Problem Not Made Part Of The Solution?

Medio December 2008 IP Dragon wrote about the controversial genesis of the China-less Anti-Counterfeiting Trade Agreement (ACTA) by Japan and the US (joined by Australia, Canada, the European Union, Mexico, Morocco, New Zealand, Republic of Korea, Singapore and Switzerland) whose goal it is to stem the tide of counterfeit and pirated goods that originate for […]

Professor Daniel Gervais’ New Book Includes: Confidential Interim Report DS 362

Who won the IPR dispute at the WTO between China and the U.S.? That was the name of my blog posting in October 2008 and gave some leaked information. But what does the official information say? According to WTO document WT/DS362/9, that can be found at the site of the WTO dedicated to DS 362 […]

Drafting An Anti-Counterfeiting Trade Agreement: Where is China?

The drafting of the Anti-Counterfeiting Trade Agreement (ACTA) was, and to a lesser extent still is, shrouded in secrecy. There has been a lot of criticism about the lack of transparency in the negotiation process and drafting of ACTA. Only a leakage in 2007 provided a draft version of ACTA, see here (4 pages pdf). […]

“Free Trade Agreement China-Peru Effective 2009”

A Free Trade Agreement (Tratado de Libre Comercio Perú – China) was announced at a summit in Lima, Peru, between President Alan Garcia and Hu Jintao, read CNN article about it here. Bi Mingxin of Xinhua wrote that a spokesperson of the Ministry of Commerce (MOFCOM) told that the Free Trade Agreement (FTA) between the […]

China’s National IP Strategy 2008: Feasible Commitments or Road to Nowhere Paved With Good Intentions

This article by Danny Friedmann is also published at the site of Duncan Bucknell Company, the consulting firm that specialises in global intellectual property strategy, see here. China’s State Council promulgated a National Intellectual Property Strategy [1]. In the policy document there is a lot of talk about doing everything more efficient and more effective. […]

TRIPs Amendment; China’s Medicine For A New Pandemic?

It is good to be prepared for the worst. Zhu Zhe of the China Daily reports that last Sunday, during the 30th session of the National People’s Congress (NPC) Standing Committee, China’s legislature accepted an amendment to the World Trade Organization Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) to enhance access to […]

Chinese Copyright Pirate created interest in subject of Intellectual Property for Joseph Stiglitz, Nobel Laureate

Joseph Stiglitz, 2001 Nobel laureate in economics and professor at Columbia University delivered the 6th annual Meredith and Kip Frey Lecture in Intellectual Property Friday at the School of Law of Duke University. Naureen Khan wrote for The Chronicle: “He said his interest in intellectual property began 20 years ago, when a Chinese publisher called […]

IPR: Overseas Parties Have 60 percent Success Rate at Beijing No.1 Intemediate People’s Court

Xie Chuanjiao of China Daily wrote the article International laws applied in local IPR cases, read here. Nothing new really, China has this obligation already since April 12, 1986 when it adopted its General Principles of Civil Law . When China became the 143rd member of the WTO on December 11, 2001, it automatically entered […]

China’s TRIPs Compliance Five Years Later: What’s The Score?

Today the USTR issued the 2006 Report to Congress On China’s WTO Compliance, including nine pages (70-79) about China’s intellectual property enforcement. Nothing really surprising, but it gives an overview of China’s compliance with TRIPs through the eyes of the USTR. Pages 96-99, about the legal framework, including transparency, uniform application of laws and judicial […]

James Paradise: WTO Case Will Not Start Before North Korean Nuclear Threat Has Ended

James F. Paradise wrote another thought provoking article on AsiaMedia of the UCLA Asia Institute. The innovation of TRIPS compared to WIPO’s conventions (Berne and Paris) is that disputes about enforcement can be dealt with in a binding manner by a panel of the WTO dispute resolution body. In other words WTO’s TRIPS is WIPO […]