eu and china repurpose
TRANSCRIPT
EU & China : An international perspective on current practises
What are the most common IP problems which companies face in China?
...even though the revised Trademark Law contains new
provisions that aim to make the opposition easier, it is still difficult
to establish bad faith.
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Paul Ranjard, from the European Chamber of Commerce provides insight on the current relationship between EU and China.
Ramya Nair
IP problems can vary immensely across different sectors. The most common, or widespread problem which companies have to face, irrelevant of their sector or origin is probably the phenomena of bad faith trademark applications, filed in China by Chinese individuals and companies. It is more and more frequent, for a famous foreign brand, to find very similar trademarks being published by the trademark office and having to go through the expense of initiating opposition procedures. The cause can probably be found in the staggering number of trademark applications. Almost 3 million trademarks were filed in 2015. Filing is getting easier and cheaper (some new business models even offer free of charge filing services). The (externalized) examination service of the Trademark Office, who is under time pressure (9 months maximum), has no time to conduct a proper ex officio search for prior rights. And, even though the revised Trademark Law contains new provisions that aim to make the opposition easier, it is still difficult to establish bad faith. So far, the Trademark Office seems ready to invoke the new article 7 (principle of good faith) as a legal ground for refusing the registration of such trademark applications. Still, companies need to be very watchful and incur significant expenses.
In what ways does the concern about IP enforcement affect company strategy and operations in China?
RN
Looking at the results of the Business Confidence Survey which the European Chamber of Commerce runs on a yearly basis, IP protection per se has not been specifically mentioned by European companies as an obstacle to their decisions to invest and operate in China in recent years. Companies refer generally to market access restrictions, which may however be incidental to innovation related policies, technology transfer rules, investment requirements, protection of IP in cases of anti-monopoly cases. It is therefore hard to say nonetheless that IP protection directly affects business between China and foreign countries.
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In what ways do IP laws and regulations in China reflect international standards?
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RN
The principles of IP protection are basically the same as in developed countries. These laws were among the first to be enacted, after the open door policy was launched in the early eighties. It was necessary to protect foreign IP in order to invite investment. There have been several waves of revisions of the IP legal framework since. The trademark law for instance was revised for the third time in 2013 and the revision of the patent law and the copyright law are ongoing. This said, what is quite different is the variety of enforcement procedures. The so called “double track” system, which allows an IP owner to chose between a rapid and cheap administrative enforcement and a more sophisticated and onerous civil procedure (not to mention criminal actions and customs seizures) is certainly a unique characteristic of the overall protection system in China.
Are there any procedural barriers that hinder companies’ efforts to protect IP in China?
Procedure is the main issue. Access to justice (civil courts) is not easy for foreign companies. They need to submit notarized and legalized powers of attorneys, which sometimes can be problematic, when actions need to be taken rapidly. Evidence originating from foreign countries also need to go through the same notarization and legalization procedure, which is time consuming and expensive. The outcome of civil procedure is often difficult to predict, given a lack of transparency in the process. This being said, it is fair to say that China is making progress and paying special attention to the improvement of the enforcement procedures. An
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overall judicial reform is being implemented, the most visible part of which being the setting up, in 2014, of three specialized IP Courts in Beijing, Shang-hai and Guangzhou. Furthermore, the Supreme People’s Court has created a centre in Beijing which is focusing on the role of case law, a move that is bound to progressively bring China in line with inter-national practice.
The coexistence of administrative and civil enforce-ment procedures may be considered as an advan-tage because of the reasons mentioned above, but this advantage has its limits. A full enforcement procedure should not only aim at stopping the infringement and imposing a penalty to deter the infringer from repeating, but it should also aim at repairing the prejudice suffered by the IP owner. And this, the administrative enforcement route cannot do. It has been suggested that both systems should be combined. It should be possible to collect evi-dence through the administrative way and continue the case in court. A procedural “bridge” would be welcome.
Past and future improvements are only possible if there is an open dialogue. Last year, the EU and China celebrated the 10th anniversary of the EU-China IP Dialogue Mechanism. Both reaffirmed that cooperation in the field of IPR protection remains an important aspect of bilateral relations. In 2013, the EU and China launched IP Key (www.ipkey.org) which focuses on facilitating the development of an intellectual property rights framework in China that is increasingly effective, fair, transparent, and based up international best practices. It also provides a platform for cooperation between EU and Chinese ministries, agencies, courts and a wider community of stakeholder to create an IP landscape that benefits both Chinese and EU industry operating in China.
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The outcome of civil procedure is often difficult to predict, given a lack of transparency in the process. This
being said, it is fair to say that China is making progress...
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What type of differences should companies within the EU recognize when considering the way China’s legal framework treats ownership of improvements
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The parties to a cross-border technology transfer agreement have less contractual autonomy than the parties to a domestic technology transfer contract, even if the technology is the same. They are not allowed to freely negotiate clauses concerning the ownership of subsequent developments or the liabil-ity for infringement of third parties rights, which the transferee might commit through using the tech-nology. These restrictions, stipulated in 2001, were deemed necessary at the time but are no longer justified and, on the contrary, constitute an obstacle to the free flow of technology.
Note on the contributor:
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Paul Ranjard Paul Ranjard is a French lawyer who has been based in China since 1997. He graduated in 1969 from the Paris Law School and joined the Paris Bar in 1972.
Apart from his general practice mainly as a commercial law litigator, Mr. Ranjard has progressively developed a Chinese related affairs practice. In September, 1997, he moved to Beijing.
Since that date, Mr. Ranjard has devoted most of his time to IPR related cases, acting on behalf of French companies to help protect their intellectual property rights, as well as representing the Frenchassociation Unifab, and chairing the IPR Working Group of the European Chamber of Commerce. Now, he is of counsel to WAN HUI DA.
Paul Ranjard is an active speaker at academic seminars and international conferences. He is the co-author of the article “Actions Speak Louder than Words” (Managing Intellectual Property / China IP Focus 2007) and “Relative Grounds of Refusal in China & EU” (MIP / China IP Focus 2008).
Who will I meet ?
IP ManagerHead of Patents (Directors, Managers, VPs)Patent SpecialistPatent Portfolio ManagerPatent Attorney / CounselHead of IP Policy, Head of IP External Affairs. IP Strategy, Head of Patents OperationsHead of IP / IPR (Directors, Managers, VPs)Head of Licensing / Licenses (Directors, Managers , VPs)Litigation CounselAssociate GC, LitigationVP, LitigationHead, LitigationGeneral CounselVP LegalDirector, LegalChief Legal OfficerDirector, Dispute ResolutionIPR Specialist (Directors, Managers, VPs)Head of Legal, In-house Counsel (Directors, Managers, VPs)Head of Litigation, Head of Patent LitigationPatent Attorney / Counsel PartnerManaging Partner
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