how ict and green tech companies can protect ip in china
TRANSCRIPT
How ICT and Green Tech companies can protect IP
in China
Reinout van Malenstein, IP Expert
Shenzhen, 17 November 2016
Project Introduction
Launched through European Union funding in 2008 and implemented by DEVELOPMENT Solutions, the European Union Chamber of Commerce in China, and the European Business Network.
Raising awareness and preparing SMEs for IPR issues in Mainland China, Hong Kong, Macao and Taiwan: “know before you go”
It is challenging but possible to deal with IPR in China and minimise risk for SMEs!
Free of charge resource and services for European SMEs
Business-focused and practical first-line advice
Delivering IPR business tools and self-help solutions (guides, E-learning)
Enabling EU SMEs to make informed IPR decisions (protection, enforcement, IP management)
Services at a Glance
Enquiry Helpline
IP Guides, Factsheets &
article
E-learning & Business Tools
Training Workshops & Live Webinars Website & Blog
How ICT and Green Tech companies can protect IP in China
Agenda:
1. General IPR Landscape in China
2. Trademarks
3. Patents
4. Copyrights
5. Trade secrets
6. Watch outs
7. Enforcement
8. Take-away messages
General IPR landscape in China
• No registration = no protection (Trademark, Patent)
• First-to-file (Apple)
Trade marks
• A distinctive sign, including: – Words (or Slogan)
– logo’s
– Numbers
– Colour combination
– 3D symbols
– Sounds
• which identifies source product /service – Not: ‘the Hairdresser’ for a Hairdressing Salon
Trade Marks: important
• First-to-file system -> example: Bad faith
• Register through international system (Madrid Protocol) or register with China Trade Mark Office (CTMO)
• Class and sub-class system
• Trade mark agent required for domestic registration if no China address
• Register a Chinese language trade mark
Case study: New balance
• New balance: producer of shoes etc.
• 新百伦 (xinbailun) registered in 2004 by Mr. Zhou
• New balance filed opposition in 2004 © new balance
• Failed -> not well-known trademark
• New balance kept using 新百伦
• Mr. Zhou sues New balance in Guangzhou
What happens?
New balance: case study
• Guangzhou Municipal Intermediate People's Court: – New Balance improperly used the registered
trademark because it was registered by another party
– RMB 98 million in compensation to the right owner and issue a public apology. Appeal: RMB 5 million compensation. © new balance
• Lesson: register the Chinese name of your brand as soon as possible
Patents
• Three types of patent available: Invention (20 years), utility model (10 years) and design (10 years)
• Use experienced patent attorney or agent
• Translation very important to have the correct scope of protection
• China requires absolute novelty - the invention or design cannot have been made public anywhere or patent can be found to be invalid
Graphical User Interface
• Also protectable under design patent
• Need to apply for it together with product
© Apple Inc.
Case study: Neoplan vs Zhongda © Xinhua
Case study: Neoplan vs Zhongda
• 2005: Neoplan registered its bus as a design patent in China
• 2006: Neoplan started legal proceedings against Zhongda.
• Neoplan:
– Zhongda’s A9 bus infringed our design patent.
• Beijing Intermediate Court 2009:
– awarded Neoplan damages of 21,16 million RMB
Case study: Neoplan vs Zhongda
• 2010: Zhongda found picture of bus in a German magazine that was published before the patent application
• 2012, the Beijing High Court overruled the 2009 decision as the patent was invalid
• Lesson: register your design patent in China before you disclose your design patent anywhere in the world!
WATCH OUT: difference with EU
• In EU: registered and unregistered design
• If not registered -> 3 years protection
• If registered -> 25 years protection
• Keep it secret until you have applied for protection in China!
Copyright
You can protect your design through copyright if it is not just an idea, but an expression of your idea.
–Protection for: • Images, photographs, company website, architectural
or engineering drawings, works of fine art, applied art, literary works, music or sound recordings, dramatic or cinematic works, compilations, software, etc
© J.K. Rowling
Copyright registration
• Copyright may exist without registration, but
– How to prove it?
– Register in China!
-------------------------------------------------------------------
• Software:
• Notarise copyright in home country for proof
• Notarise and legalise the above document in China when needed for enforcement
Trade Secrets
When to make it a trade secret?
• Patent = max. 20 years protection
• Trade secret = protection until public knows how
• What is a trade secret?
- Non public information
- Providing a competitive advantage
- Kept confidential by its holder
Secret Protection and Organisation
• Physical measures - Mark documents and bases confidential
- Introduce access restriction and tracing systems
• Technical measures - Separate manufacture and assembly steps
- Special fonts, such as Micro text (copier, scanner-proof)
Secret Protection and Organisation
• Contractual measures - Confidentiality and non-competition agreements with employees (in Chinese and English/local language) – Prepare departure from the company and employee follow-up
- Keep it secret, keep it safe!
- NDAs
• Training of personnel - protection of your own and your competitors secrets
When it goes wrong: Eli Lilly v. Huang
• Huang had signed confidentiality agreement
• Huang downloaded 21 confidential
• Eli Lilly asked for the deletion of files
• Huang refused and resigned
• EL starts trade secret misappropriation action on Anti-Unfair Competition Law for injunctive relief and damages RMB 20,000,000.
Eli Lilly v. Huang
• Shanghai No. 1 Intermediate Court
• first interlocutory injunction for trade secret
• prohibited Huang from disclosing, using or allowing others to use the trade secrets
Watch-outs
• Transfer of tech/patents – catalogues, CHEU
– Authorized (declaration), restricted, prohibited
• Foreign filing licence
– If inventor is a Chinese citizen or a Chinese entity, you must get foreign filing license if you want to file first outside China
• Improvement remuneration
–Otherwise null and void!
– Also for employees and
Chinese partners
Remuneration
• Chinese partners: – cash, shared profits, equity interest, or other types of
property rights
• Employees: – RMB 3000 per invention patent
– RMB 1000 per utility model or design
– Otherwise: percentage of min. 2% each year from the profits generated from the exploitation
– If other party in charge: percentage no less than 10% from the royalty fee.
Enforcement
• First, evidence collection
– Needs to be notarised by Chinese notary public
– Otherwise not accepted by Courts and administrative authorities
• Negotiations / Licensing always an option
• Enforcement options: see next slide
Enforcement
• Administrative enforcement
o before specialised administrations
o fast, cheap, reasonably efficient
o confiscation, destruction, fine but no damages compensation
• Civil enforcement
o before the People’s Courts
o advisable for more difficult cases
o time consuming and more expensive
o compensation awarded
Online protection
• Use trademarks but also copyright as additional layer of protection – Trademark for company name, products and logo
– Copyright protects images of the design such as photographs and those found in instruction manuals.
• Counterfeit items offered for sale online, often use copyright protected images.
• Advisable to use for ‘notice and take down’ actions with Alibaba, Taobao etc.
® Alibaba
Take-away messages
• Register your IP ASAP
• Develop a comprehensive IP strategy and portfolio linked to your business plan • Selling, Licensing or enforcing?
• Always sign NDAs with partners, contractors
and employees
• Contact the China IPR SME Helpdesk
Stay Connected
The China IPR SME Helpdesk provides free, confidential, business-focused advice to European Small and Medium Enterprises (SMEs) relating to IPR in China.
For more information about our services and how the China IPR SME Helpdesk can add value to EU SMEs:
Enquiry Helpline:
Phone:
+86 10 6462 2066
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