Click on the topics on the right to learn the dos and don'ts of Intellectual Property Rights in China by viewing the experiences of other European small and medium-sized enterprises.
If you have an IP case you would like to share please email firstname.lastname@example.org
Status in China: Manufacturing and selling products
A British SME with a registered trade mark in China found several counterfeits of its products on a popular e-commerce platform. Before starting a take-down action, the Helpdesk recommended to proceed with a search for basic information from the Chinese company infringing their rights. The Chinese company had an offline shop in a popular market in Guangzhou where the EU SME sent an investigator to collect further evidences of trade mark infringement. The investigator organised notarised purchase and notarised pictures of the infringing products. Once the case was built, the dossier was filed with the local AIC (Administration of Industry and Commerce).
The AIC proceed with a surprise administrative raid action. They seize the infringing products and a month later issued an administrative notice fining the Chinese company for trade mark infringement.
The fine notice is an administrative decision that could be used as evidence of trade mark infringement. The company rightfully decided to use it for several follow-up actions:
- to speed-up the take-down of the Chinese counterfeiter’s infringing links on several e-commerce platforms,
- to send a warning letter to the Guangzhou market hosting the infringing shop based on the prohibition to sell goods infringing on registered trade mark rights, and
- to ask for damages with the civil court.
When you find counterfeits online, it is advisable to check the sellers’ information before initiating an online take-down, to see whether it’s possible to take offline actions against them. Always collect notarised evidence of infringement before initiating any enforcement action. Keep in mind that administrative enforcement for straightforward infringement can be a fast and cheap option, which might further open the door to follow-up actions. Finally, note that it’s essential to have your rights registered in China to enforce them with Chinese authorities.
Status in China: Distributing
An Italian manufacturer of skin products contacts the Helpdesk. The trade mark registration of his products was rejected by the Chinese Trade Mark Bureau as there was a similar registration. The company asked if there is anything they can do.
The Helpdesk asked if there was any relationship between the Chinese company that registered the trade mark and the European company. The European company did not have any business dealings with the Chinese company, therefore unfortunately as registration based upon the principle of bad faith with regard to known associate would not work. Furthermore, the Helpdesk asked if the Chinese company had registered a logo apart from a word mark. The answer was no, the Chinese company had only registered a word mark. Unfortunately, that meant that using copyright as a prior right to a logo could not be brought in as a ground for invalidation of the trade mark. Thirdly, the Helpdesk asked if the European company knew of more registrations the Chinese company might have with regard to trade marks similar to that of already registered in the EU and USA brands. The European company did not know the answer to this. The Helpdesk offered to do a quick search to see if this was the case. From the Chinese Trade Mark Office online Chinese database it turned out that the company had indeed more than fifty registrations of names similar to those of already registered trade marks of European Union and USA companies.
According to the recent practice of the CTMO, if you can prove that a company has registered at least thirty or more trade marks of other companies in the EU or USA etc., then you could ask for invalidation of the trade mark based upon bad faith, i.e. the company knew the existence of the European company and they purposely registered the trade mark so that the European company would have to pay them a sum of money for trade mark transfer and market entrance. The European company took up contact with a trade mark agent and started to file an invalidation request. After the invalidation request was filed, negotiations with the Chinese company also commence to see whether or not the Chinese company would be able to transfer the trade mark for a decent price to the European company.
Proceed with a broader trade mark search based on the Chinese registrant to collect evidences of bad faith registration.
Status in China: no presence
An Italian tourist stumbled upon a large flagship store of his favourite Italian brand X when visiting Beijing. He took many pictures and once back in Italy, he congratulated a friend of his who was an employee of the company X. That’s how X learned about the making of a flagship store in the center of Beijing.
The company contacted the Helpdesk which offered strategic advice.
No trade mark registered by X and China is a first-to-file system, so trade mark enforcement was discarded.
Counterfeits of the packaging and logo were identical. The Helpdesk advised for the company to register the copyrights for both the packaging and logo, although copyright registration is not mandatory, the copyright certificate will be extremely helpful by authorities to proceed with enforcement. We also advised for a notary public to notarise the stores in order to get the evidence of infringement, which is necessary to lodge a litigation case based on copyright infringement.
The Helpdesk also advised to have a wider approach and consider anti-unfair competition and food safety issues for this matter –reaching out legal counsel specialized in these areas and also referring to the EU SME Centre.
Proceeding with trade mark registration in China should be considered by all companies, even when they do not operate in there, given the proactivity of counterfeiters and the first-to-file system.
If a company finds an infringement of their copyrights, registration is needed in order to proceed with enforcement.
To lodge a litigation, Courts in China need for the evidence of infringement to be notarised.
It is interesting to approach an infringement from other angles besides IP (food & safety regulations, anti-unfair competition, etc.)