The Brief
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Belgrade
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Brussels
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Special supplement
Bu charest
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Budapest
China Intellectual Property News
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Casablanca
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Editorial: a flourishing year for the intellectual property
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sector
Dubai
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China keeps on amending its intellectual property legal framework in order to
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improve its intellectual property protection and further guarantee owners’ rights.
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Ho Chi Minh-City
On June 5th, 2008, PRC’s State Council issued an Outline of the National Intellectual
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Property Strategy to guide the development of IP undertakings in China for a relatively
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long period. It aims at improving the intellectual property regime and the intellectual
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property enforcement. In that respect, new measures that illustrate the
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implementation of this Intellectual Property strategy in China have already been
Istanbul
enacted.
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The end of the 2008 year has been marked by the vote on December 27th of a long‐
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awaited amendment to PRC’s patent system, which will be effective from October
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1st, 2009. Improving the patent protection directly responds to the goals set forth by
the new strategy. Additional provisions specifying the scope of the new Patent Law
Lo ndon
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are expected in 2009: Draft of the Amendment to the Implementing Provisions for the Patent
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Law and Draft of the Amendment to the Guidelines for Patent Examination and Approval.
M os cow
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China also aims at strengthening the regulations related to technology import and
export. Important related measures are under process: Draft of Amendment of Measure
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for the Administration of Technology Prohibited or Restricted from Export, Draft of
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Administrative Measures for Export‐Prohibited or Restricted Technologies, Draft of
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Administrative Measures for the Registration of Technology Import and Export Contracts,
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Draft of Implementing Measure on Customs Intellectual Property Rights Protection. Beside,
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the amendments of the trademark law and the copyright law are in process.
Prague
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China is stepping‐up IP protection through efficient and effective enforcement and has
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prepared numerous regulations to encourage innovation in the Chinese territory that
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should be enacted in 2009.
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Saint Petersburg
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gl n.sa intpetersburg@ gide.com
Shang hai
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Tunis
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Warsaw
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2
THE PRC SUPREME COURT’S DRAFT
At this time, hundreds of trademarks have been
INTERPRETATION ON RECOGNITION OF
deemed well known, with the majority of those being
WELL‐KNOWN TRADEMARKS
(a) Chinese marks and (b) so deemed in the course of
litigation. The number of trademarks declared well
known, including the number of foreign marks, has
Introduction
steadily increased. Foreign brands deemed well known
include French brands such as “Yves Saint Laurent”
In November 2008, the PRC Supreme People’s Court
(YSL) and “LACOSTE” (2005), L’OREAL and the
issued for comment and consultation a draft called the
monogram trademark of Louis Vuitton (2006) , and
Interpretations on Several Issues Concerning the
“MONTAGUT” (2008).
Recognition and Protection of Well‐Known Trademarks in
Hearing Civil Cases on Trademark Infringement (the
Clarifications and Amendments to Well‐Known
“Interpretation”), in order to regulate the judicial
Trademark Recognition Provided Under the
standards on well‐known trademarks and to complete
Interpretation
the existing law on such marks.
Limitations on Cases in which Applications for Well‐
As a preliminary comment, the power of the People’s
Known Status will be Considered
Courts to recognize well‐known trademarks was
initially confirmed in the Interpretations of the Supreme
In what is an indication that the Supreme People’s
People’s Court Concerning the Application of Laws in the
Court believes the current system is being abused
Trial of Cases of Civil Disputes Arising from Trademarks,
(with too many marks being deemed well known in
on 12 October 2002.
the last few years) Articles 2 and 3 of the Interpretation
limit the courts’ ability regarding admissibility of
Well‐Known Trademark Protection in the PRC
applications for well‐known status. The provisions
seem to aim at preventing cases launched by
Based on the principles regarding protection of well‐
trademark owners in order to obtain recognition of
known trademarks inhering in the Paris Convention
their trademarks as “well known”.
for the Protection of Industrial Property of 1883 (the
“Paris Convention”), and the Agreement on Trade‐
Article 2 states five situations in which the recognition
Related Aspects of Intellectual Property Rights
of a trademark as well known may be examined by the
(“TRIPS”) of 1994, well‐known trademarks were
PRC Courts:
formally recognized under Chinese law in Articles 13
and 14 of the PRC Trademark Law of 2001.
(1) Breach of Article 13 of the Trademark Law;
Article 13 of the Trademark Law makes clear that the
(2) Use or registration of a domain name which is
following additional protections are conferred upon
similar or identical to the plaintiff’s trademark,
trademarks deemed well known in the PRC:
thus constituting a breach of the plaintiff’s
trademark rights or an act of unfair competition;
(1) In the case of a well‐known trademark that is not
yet registered in China, there is protection against
(3) Use of a company name containing terms similar
the registration by a third person of a similar or
or identical to the plaintiff’s mark, thus
identical mark for use on the same or similar
constituting a breach of the plaintiff’s trademark
goods to those on which the well‐known mark
right or an act of unfair competition;
appears.
(4) Use of a trademark that infringes the plaintiff’s
(2) In the case of a well‐known trademark that is
registered trademark, with the defendant raising
already registered, there is protection from
a counterclaim that he has made prior
registration or use by a third person of similar or
unregistered
use
of
the
trademark
(the
identical trademarks on goods dissimilar to those
unregistered trademark being deemed well‐
for which the registration has been granted, i.e.,
known);
cross‐class protection. Protection for a standard
trademark registration only prevents use of a
(5) Other circumstances in which the recognition of
similar or identical mark on similar or identical
the trademark’s well‐known status is necessary
goods.
under the law, regulations and factual situations.
3
Article 3 contains additional limitations to the
the case, for example, where the trademark’s
recognition of well‐known status by the Courts:
reputation in China is already widespread and well‐
entrenched.
(1) The confirmation of an act of infringement by a
Court is not conditional upon recognition of the
It is to be noted that the term “relevant public” and the
well‐known status of the plaintiff’s trademark.
other terms in Article 14 have been interpreted so far
Indeed, the infringement allegation relates to the
with reference to the Chinese market. This has acted as
use of a trademark similar to a registered
a limiting factor for those brands that are well known
trademark on similar or identical goods, which
overseas, but have only recently entered the Chinese
can be characterized merely by the fact that the
market. Article 4 (2) resolves this matter by stating that
complainant’s trademark is registered; and
as per the concrete situation of the case and when
necessary, notoriety outside China, may also be duly
(2) The defendant will not be found to have infringed
considered. This should increase the chance for a
a trademark simply on the grounds that the
trademark to be recognized as well known even if its
plaintiff’s trademark is recognized as a well‐
reputation in China pales in comparison with its
known trademark. For example, the trademark of
reputation overseas.
the defendant cannot be deemed identical or
similar to the plaintiff’s registered or unregistered
Clarification on the Burden of Proof for Trademark
mark, where it cannot be established that the
Owners
public would be confused by the use of the
allegedly‐infringing mark.
Article 5 of the Interpretation emphasizes that the
plaintiff bears the burden to demonstrate that its
Together, these rules will limit both the number of
trademark was definitively “well known” at the time
applications for well‐known status filed in the course
the alleged acts of infringement or unfair competition
of a litigation, as well as the number of applications
occurred.
granted by the judges.
Article 6 of the Interpretation also clarifies that for
Further Clarification of Factors for Determination of
trademarks previously deemed well known by another
Well‐Known Status
People’s Court or the SAIC, unless the defendant
challenges such well‐known status or provides
Article 14 of the PRC Trademark Law sets out the basic
sufficient evidence to support that the trademark
factors for determination of a well‐known trademark
should not have been so deemed or is no longer
status:
famous, the People’s Court shall rely on the prior
decision and deem the trademark as well known.
(1) the degree of notoriety of the trademark among
the relevant public;
Finally, pursuant to Article 7, regarding trademarks
already widely known to the general public in China,
(2) the length of continuous use of the trademark;
if the plaintiff provides strong preliminary evidence of
fame or the defendant does not raise any objection, the
(3) the continuous length, degree and geographical
People’s Court may recognize the well‐known status of
scope of the publicity for the trademark;
such trademark.
(4) the record of protection of the trademark as a
Clarification of Criteria for Recognition of Well‐
well‐known trademark; and
Known Status
(5) other factors associated with the trademark’s
The primary purpose of providing protection to well‐
notoriety.
known marks under Article 13 of the Trademark Law
is to prevent unfair use of a famous trademark and any
Rather than requiring a detailed examination of each of
use that may mislead or confuse the public. For
these factors, Article 4 (1) of the Draft Interpretation
example, under Article 13, paragraph 1 of the
provides that if the well‐known status can be
Trademark Law, the PRC Trademark Office (“TMO”) is
determined by a court by examining only certain of the
specifically authorized to refuse registration and
factors mentioned above, the remaining factors in
prohibit the use of a trademark that “constitutes a
Article 14 do not need to be analyzed. This would be
reproduction, an imitation, or a translation, liable to
4
create confusion with another’s well‐known trademark
Conclusion
not registered in China”. Article 13, paragraph 2
prohibits registration of trademarks similar or identical
As can been seen from the draft Interpretation, the
to well‐known trademarks registered in China in the
Supreme People’s Court has attempted to clarify the
event the “use of such trademarks on dissimilar goods
process for recognition of well‐known trademarks,
or services would confuse the public and possibly
prevent some practices that could be deemed an
prejudice the interests of the owner of the well‐known
“abuse” of the system, and at the same time, in some
trademark”.
ways simplify the process for trademarks that are truly
“famous” or “well known” to be readily recognized as
Article 8 of the Interpretation clarifies the term
such in appropriate cases. It remains to be seen
“confusing the public” under Article 13 (1) of the
whether further modifications will be made to the
Trademark Law, indicating such confusion exists
Interpretation based on the comments collected during
where the use of a trademark “may mislead the
the consultation period, and if so, whether those
relevant public regarding the origin of the good, in a
modifications will be of further help to brand owners,
way that makes the relevant public believe that there is
or a further hindrance.
a specific relationship between the two producers of
the branded products”.
A few days before the publication of this article, the Supreme
Court of China adopted the Interpretations on 23 April
Similarly, the term “mislead the public and possibly
2009. This text will enter into force on 1 May 2009. The
prejudice the interests of the owner of the well‐known
final version integrates most of the Draft Interpretations
trademark” under Article 13, paragraph 2 is also
with the exception of Article 4 (2), which has been removed.
clarified: such a case is made when the use of the
Therefore, the status of well‐known trademark will only be
trademark in question “is sufficient to make the
considered regarding the Chinese market. This limitation is
relevant public believe there is a certain relationship”
unfortunate.
between the producers of the branded products and
“takes advantage of the reputation of the well‐known
trademark on the market, affecting its distinctiveness
HIGHLIGHTS OF THE NEW DRAFT
as a well‐known trademark, or impairing its market
IMPLEMENTING RULES OF PATENT LAW
reputation”. This Article completes the definition of
the term “confusing the public” broadening its legal
After disclosing a first version of the Draft
scope and protection. With such clarified explanations,
Implementing Rules of Patent Law at the end of 2008, a
judicial uncertainty and unnecessary over‐protection
new version of the Draft Implementing Rules (the
of trademarks is likely to be reduced.
“Draft Rules”) was submitted to the State Council for
examination by the State Intellectual Property Office
Limitations on Actions for Infringement of Well‐
(the “SIPO”) on 27 February 2009 and a call for public
Known Trademarks
comment launched on 9 March 2009. The Draft Rules
are aimed at improving the efficiency and convenience
Under Article 13 of the PRC Trademark Law, plaintiffs
of the patent application process, increasing patent
are permitted to initiate litigation to stop infringement
protection, and reaching a better balance between
of their registered trademarks. The Interpretations
patentees’ interests and public interest. The new Patent
define certain limits to this right: (1) the litigation is to
Law recently voted on (the “New Patent Law”) will
be launched before the defendant’s registration
become effective on 1 October 2009, so the new Draft
becomes irrevocable, i.e., within five years from the
Rules are expected to be finalized and effective in 2010.
date of the defendant’s trademark registration; and
(2) the plaintiff’s trademark should have been
The Draft Rules intend to establish the implementation
recognized as well‐known at the time of the filing for
conditions of the main features established in the New
trademark registration by the defendant. However,
Patent Law. Following is an overview of some major
the Interpretations are silent regarding whether such
changes.
rules are applicable to disputes based on domain or
company names.
5
Inventions made in China
The Draft Rules further define the term “genetic
resources” as “any material taken from human, animal,
Application of the principles set forth by the New
plant or micro‐organism, containing genetically functioning
Patent Law under Article 20, Article 9 of the Draft
elements with new, actual or potential value”” in Article
Rules requires that during the patent process
27. It is clearly stated that failure to comply with such a
application, all entities or individuals, both foreign and
disclosure would result in the refusal or invalidation of
domestic, planning to file a patent abroad regarding an
the Chinese patent.
invention made in China, should submit a request for
confidentiality examination through one of the
Evaluation Report on Utility Models and Design
following methods:
Patents
(1) First, to the patent administrative authority,
Pursuant to Article 56 of the Draft Rules, after the
together with a detailed description regarding the
announcement of the decision to grant a patent for a
patent technical scheme, in the event the
utility model or for a design, the patentee or any other
application shall be directly filed in a foreign
interested
person
may
request
the
patent
country or if the request concerns an international
administrative authority to make an evaluation report
patent which shall be submitted through a foreign
on the patent.
agency.
By “interested party”, the Draft Rules refer to the
(2) Upon or after filing the patent application if the
exclusive or non‐exclusive licensee who has been
patent application shall first be filed with the
granted the right to sue by the licensor. However, the
Chinese patent authority and then abroad
persons in real need of such a report, such as potential
through a foreign agency.
licensees, competitors, or potential or alleged
infringers, are excluded by the Draft Rules.
(3) A request is considered to be made in the event it
concerns an international patent application to the
This option may be a first step to the implementation
Chinese patent authority.
of Article 9 of the Draft Rules, which prohibits
simultaneous filing of a patent invention and a utility
According to the Draft Rules, the patent administrative
model.
entity shall notify the applicant within three months
upon reception of such request if the invention or
The introduction of a Primacy Defence
utility model is considered as likely to involve national
security
or
substantial
interests
requiring
According to the regulations in force, an invalidation
confidentiality. In the absence of notification in this
request of a design patent based on a conflict of prior
time frame, the applicant may freely apply for
rights is accepted by Patent Re‐examination Board
registration of the patent abroad. The consequence of
(“PRB”) only if effective decisions or judgments may
such provision should “indirectly” oblige applicants to
be provided in the PRC. Pursuant to this “wrongly
file an application in China first, in order to ascertain
interpreted” provision, invalidation requests remain
their priority filing date.
difficult or impossible to obtain, and enhances copies
of previous patents, adversely affecting the efficiency
In addition, the Draft Rules do not provide any
of the Chinese patent system.
information regarding the interpretation of Article 20,
where two undefined terms remain: “invention
The Draft Rules modify this regulation, and thus
completed in China” and “disclosing the technical scheme
patent invalidation based on the grounds of a conflict
before filing for patent”.
of prior rights may be accepted by the PRB, but only if
filed by the ʺformer owner or an interested partyʺ. Such a
Definition of Patents Concerning Genetic Resources
clause enables prior rights owners to invalidate patents
of copies and to improve the quality of patents in
The New Patent Law, under Article 5, requires
China, and at the same time to eliminate abusive
compulsory disclosure of direct and original sources of
invalidation requests by infringers, done in order to
genetic resources in the event the invention relies on
gain time.
genetic resources.
6
Restriction on Compulsory Licences
Conclusion
The New Patent Law significantly amended the system
The Draft Rules provides some answers to the legal
of compulsory licences, and the Draft Rules provide
issues raised by the New Patent law; however, this
further details regarding the enforcement of this
draft may be amended again based on the comments
principle. Article 76 of the Draft Rules aims to interpret
provided by the SIPO.
the condition of “not sufficiently exploiting a patent
within three years after the issuance of the patent”, which is
regulated under Article 48 (1) of the New Patent Law.
This article states that a patent exploited in a manner
or on a scale that fails to meet the expectations of the
domestic market for the patented product or process is
not sufficiently exploited. This clause, which is too
imprecise, may be used by infringers as a means to
acquire a compulsory licence.
Furthermore, compulsory licences may now be
applicable to the production of pharmaceutical
products for public health purposes. Articles 77, 78 and
79 of the Draft Rules further regulate detailed
requirements and procedure for compulsory licences
of pharmaceutical products which might be at stake in
future practice.
Reward for the inventor
Article 16 of the New Patent Law grants the inventors
of a service invention the right to obtain rewards if
patent rights are granted for their service inventions.
The Draft Rules further specify that, unless detailed
regulations exist regarding rewards for a service
invention in the internal rules of the entity or in the
labour contract of the inventor of such service
invention, the entity shall pay the inventor a reward
representing at least 2 % of the after‐tax benefits per
year obtained from the exploitation of the concerned
invention or the utility model, or at least 0.2% for
designs. Rewards paid in a lump sum are possible,
calculated with reference to the above mentioned
percentages.
In addition, if the legal entity transfers its patent rights
or grants a license to a third party, it shall pay the
inventor a reward amounting to no less than 10% of
the transfer price or the royalty fee after taxation.
Finally, in the event of an investment in kind with such
patent right, the reward shall not be less than 10% of
the monetary value or the value of the shares.
Beijing
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Hu Jia Lou, Chaoyang District
Beijing 100020 - PRC
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Fax +86 10 65 97 45 51
gln.beijing@gide.com
IP Contact
Hubert Bazin
bazin@gide.com
Hong Kong
Suites 1517-1519
Jardine House
1 Connaught Place
Central, Hong Kong - PRC
Tel. +852 2536 9110
Fax +852 2536 9910
gln.hongkong@gide.com
IP Contact
Daniel Plane
plane@gide.com
Shanghai
Suite 2008, Shui On Plaza
333 Huai Hai Zhong Road
200021 Shanghai - PRC
Tel. +86 21 53 06 88 99
Fax +86 21 53 06 89 89
gln.shanghai@gide.com
IP Contact
Huang Zhen
huang@gide.com
Paris
26, cours Albert 1er
75008 Paris - France
Tel. +33 (0)1 40 75 60 00
Fax +33 (0)1 43 59 37 79
info@gide.com
IP Contact
Charles-Henri Leger
leger@gide.com
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