Trade fairs in China often have special IPR complaint centres. Are such IP complaint-centres set up at all trade fairs and exhibitions in China? How efficient are they?
The Measures for the Protection of Intellectual Property Rights during Exhibitions (2006) call upon organisers of trade fairs/exhibitions lasting 3 days or longer to set up intellectual property complaint centres. The administrative departments at the locality of the exhibition dispatch their personnel to the complaint centres. The Measures do not apply to exhibitions that are shorter than 3 days.
In practice, more and more exhibition organisers are establishing such complaint centres in order to raise the exhibitions' profiles, irrespective of the length of the event. Before signing up as an exhibitor at an exhibition, you should check with the exhibition organisers whether there will be an intellectual property complaint centre and which administrative departments (for example, those dealing with patents, trade mark, etc.) will be invited to attend. If the event lasts only a day or two, you can check whether local enforcement authorities such as the Administration for Industry and Commerce (AIC), the Public Security Bureau (PSB) or the Technical Supervision Bureau (TSB) will be present. If not, the organiser should be able to provide you with a contact that can be addressed in case of infringement.
The effectiveness of these complaint centres at major exhibitions depends to a large extent on two factors
- The resources of administrative enforcement departments available at the exhibition
- How prepared you are
One common problem which arises for enforcement at exhibitions is that there may be many complaints, but insufficient administrative officials / enforcement staff. Another equally common problem is the lack of preparation of rights-holders who may discover infringers for the first time at an exhibition (preparation before an exhibition is discussed in more detail in the Tradefair Handbook, available by visiting our homepage). If you do not have the required documents, while you may not be able to take specific enforcement action at the fair, you may still take pro-active steps, for example, by making notarised purchases. A notarised purchase is a purchase made in the presence of one or two Chinese notaries (depending on the notary public's requirements). The notaries would issue a notarised statement of the fact related to the purchase. It is also important to secure as much evidence as possible for taking action after the exhibition.
What issues are usually considered and acted upon by the complaint centres at trade fairs/exhibitions?
In China, the various intellectual property laws delegate their enforcement to specified administrative authorities, such as the Administration for Industry and Commerce (AIC) for trademarks and unfair competition, Patent Administration Bureau (PAB) for invention patents utility model patents and design patents, and National Copyright Administration (NCA) for copyright. Additionally, the Technology Supervision Bureau (TSB) is empowered under certain product quality laws to take action in certain circumstances.
Where trademarks are infringed, the AIC is empowered to take action by requiring an offending exhibitor to immediately cease the infringement, withdraw from view the offending items, and/or confiscate and destroy publicity materials. If the infringement constitutes trade mark 'counterfeiting' (i.e. identical copies of the trade mark in question) then both the AIC and TSB are competent to take action because the act of counterfeiting a trade mark is also considered to be actionable under relevant product quality laws.
A company whose products are being infringed at the fair can contact both the IP office based at the fair and the local AIC. However, at trade fairs the usual practice is to visit the IP Office first. Both the IP Office and the local AIC can insist that an exhibitor remove any allegedly infringing products but they will not confiscate goods or issue punishment decisions.
The PAB is the administrative authority empowered under the Patent Law. However under the current Patent Law, the PAB has limited enforcement powers – it can inspect allegedly infringing products and can make a determination of infringement. With the exception of the Province of Guangdong, the PAB is, however, not empowered to seize infringing products, seize documents or other materials, or indeed able to impose any penalties or fines. Thus the PAB's role at exhibitions is usually that of a mediator or negotiator between the rights-holder and the infringer.
The situation is slightly different in Guangdong where the Guangdong Patent Protection Regulation grants wider powers, which still do not allow the imposition of a fine, but at least empower the PAB to seize infringing goods. An added complexity with design patents is that under the present law, an 'offer for sale' (which includes displaying infringing products at exhibitions) does not constitute infringement. This poses challenges for intellectual property enforcement since often the evidence of infringement gathered at exhibitions is circumstantial (products being displayed or contained in catalogues or other marketing brochures) and evidence of actual sales is often difficult to come by.
Under the Measures, exhibition organisers are required to keep records of infringements and ban offenders from re-attending the event if they have committed an infringement on more than 2 successive occasions. However, in practice many organisers have conflicts of interest, and it is quite easy for infringers to register under different names even if they are banned.
What actions should we take if we discover that our product is being infringed at an exhibition and how can we secure evidence of the infringement?
First, and well in advance of the exhibition, you should decide whether you aim to take enforcement action at the exhibition, or to take enforcement action after the exhibition. Taking immediate enforcement action at the exhibition may not always be the most strategic move. Whether to take immediate action will depend on many factors such as the potential losses you may suffer if action is delayed until after the fair, your short-term and long-term objectives, the nature of the rights infringed, the nature and strength of available evidence.
The effect of an enforcement action at an exhibition may be limited as it addresses primarily the sales / potential sales resulting from the fair, and will not necessarily address the source of the problem or any longer-term challenges. Therefore, even though enforcement action may be available at exhibitions, such actions should form part of a broader enforcement strategy. The actions you can take are specified below.
Action at the exhibition
Assuming that you have all documents in order and that the person signing the complaint at the exhibition has proof of proper authority (for example, the Power of Attorney), you can file a formal complaint letter at the intellectual property complaint centre and present relevant evidence of your rights and the infringement (please also see the "IP Strategy for European SMEs at trade fairs in China" Handbook). Officers of the relevant administrative authority (which as indicated above depends on the nature of the right infringed) will consider your complaint and if they decide that an inspection is justified, would accompany you to the infringer's stall to mediate the removal of the offending products. Depending on the authority, it may also be empowered to seize the offending products and impose a penalty. Note that (as mentioned above) in Guangdong Province, the PAB has additional powers under the Guangdong Patent Protection Regulations, including the power to seize infringing goods. The power vested in the IP authorities at trade fairs in China vary between events and territory. Please contact the event organiser who can provide you with details of the jurisdiction of the IP authorities at the fair.
Injunctions are theoretically available at exhibitions but difficult to put into effect unless the identity of the infringer who will be exhibiting at the exhibition and nature of the infringement is known with certainty well in advance. Unlike other countries where "John Doe" orders (an order issued by a court that a certain action may be taken against a yet un-known/un-specified target) may be available, in China a court order will only be issued if the identity of the target is specified. In addition, the level of evidence required for injunctions is very high. In practice, a complaint initiating proceedings must be made at the same time an application for an injunction. This, combined with the fact that the duration of exhibitions is short, renders injunctions at exhibitions impractical, except in situations where you have already made preparations to file civil litigation, and the exhibition in question happens to take place once those preparations are complete.
Action after the exhibition
If you choose not to take immediate enforcement action against an infringer at an exhibition, the exhibition provides a good opportunity to collect and/or formalise evidence by taking pictures of any potentially infringing products (photography is often permitted at Chinese exhibitions), collecting the target¡¦s business cards and brochures, and record the name and number of the target¡¦s stall. At this point you should not confront the target. If the case is complex or the investigation looks like it will be quite difficult, you might consider hiring an investigator. In order to formalise the evidence collection, you may wish to consider whether you want a notary to be present during evidence collection, since the notarisation of evidence will:
- Allow you to claim jurisdiction in the city where the exhibition took place
- Make it difficult for the infringer to later argue in court that they were not present, they did not produce the product, or even that the evidence was fabricated.
After the exhibition, you or your local agent can then decide what actions to take, and can for example, send the infringer an initial warning letter. The exact nature of the claims in the warning letter will depend on the strength of the evidence collected, and of course on the strength of your rights. The evidence gathered at the exhibition can be used to initiate follow-up investigations into the infringer and then, if the combined evidence warrants it, you might then consider taking administrative enforcement actions or civil litigation.
Is it possible to demand immediate action against infringers at a trade fair?
Immediate enforcement action at exhibitions against infringers is possible but the nature of the action depends on the nature of your rights (which determine the authorities which are responsible for enforcement). Please see the discussion above on the respective powers of the AIC and PAB and the special situation in Guangdong Province. It is important for you to note that depending on the rights concerned, enforcement action at an exhibition may not prevent infringing trade at the trade fair, so gathering evidence at the exhibition may be an important alternative which may secure the opportunity for taking later action against the infringer in question.
What options are available to a right holder if they are not present in China?
The following options may be available to you if you are not present in China:
- Acting through a local agent. You can contact a local agent to attend an exhibition on your behalf. In this case, you should provide your agent with notarised and legalised copies of your registered intellectual property rights (in the case of patents, you should also include receipts from the State Intellectual Property Office (SIPO) confirming payment of most recent annuities), and executed POAs;
- Acting through trade associations. Like a local agent, local trade associations may be able to assist you in a similar manner by visiting an exhibition on your behalf. However not all trade associations are able or prepared to do this. If a trade association is willing to act, then you should again provide its representative with notarised and legalised copies of your registered intellectual property rights and executed POAs.
What materials need to be submitted in order to file a complaint?
The required documents for filing a complaint at exhibitions are:
- Certificate of ownership of relevant intellectual property rights (notarisation and legalisation is strongly recommended, and is in fact required by some administrative authorities):
- Patents: patent certificate, text of published patent, documents certifying identity of patent owner, and confirmation of the legal status (i.e. that it remains in force) of the patent in question, receipt to prove that annuities have been paid.
- Trademarks: trademark certificates, and any renewals of the trade mark in question (in case it is over 10 years since the first registration of the trade mark in question), and documents certifying identity of trade mark owner.
- Copyright: certification of copyright (if you've exercised the option of registering a copyright), and documents certifying identity of copyright owner.
- Basic information about the suspected infringers (name or description sufficient to identify them at the fair, stall number etc.).
- Explanation and evidence of the alleged infringement.
- Notarised and legalised POA.
What is the procedure for following up on infringement matters after an exhibition has ended? How do the complaint-handling centres at exhibitions and the local IP administrative authorities coordinate with each other?
If action was taken at an exhibition, you should conduct follow up investigations to check if the infringer in question continues producing infringing products. You may be required to take additional enforcement action if either enforcement was not very effective at the exhibition (for example where mediation by the PAB in the case of a patent infringement did not result in removal of the infringing products from the stand), or if there is reason to believe that the infringer is going to re-offend. In any event, re-checking on known infringers, and if necessary, taking follow-up enforcement action represents good practice.
Enforcement after the exhibition can be taken by contacting the appropriate enforcement authority, which may well be different from the authority that assisted at the exhibition, since the infringer is often domiciled in a different jurisdiction to where the exhibition took place.
Another thing you should consider is using the information you learned at the exhibition to improve your intellectual property protection and enforcement strategy. One way this can easily be done is by keeping records of past infringers, checking in good time whether they are going to be at future exhibitions, and then deciding whether to prepare to take action against them at these exhibitions, or whether they should be discouraged from infringing by sending them warning letters before these exhibitions.
What are the usual penalties for infringers of IP at exhibitions?
Penalties for infringers are often modest, if imposed at all, and officials are often unable to confiscate infringing items. The aim of enforcement actions at exhibitions is largely to reduce the potential for infringing sales orders to take place. You need to manage your expectations, and should not expect to stop infringement solely through exhibition enforcement. Follow-up on evidence gathered at exhibitions may lead to opportunities for more effective enforcement action, and larger fines, especially where there is a larger (perhaps organised) infringement issue.
More information can be found in our 'IP Strategy for European SMEs at Trade Fairs in China' Handbook.