An Introduction to Intellectual Property Rights in China.

 

July, 2011

 

The phenomenal growth of China’s economy has brought many opportunities for intellectual property (IP) owners to exploit their rights.  Unfortunately there has also been a corresponding increase in counterfeiting and copying.  As trading conditions in China become more liberalized, China’s IP regime is under greater scrutiny than ever.  China’s IP laws have a relatively short history; a comprehensive IP regime was only introduced in the 1980’s.  Since joining the World Trade Organisation in 2001, China’s commitment to bring its IP laws into line with international standards is clear. 

 

Trade Marks

 

China’s Trademark Law was first adopted in 1982 and subsequently revised in 1993 and 2001.  China is a member of the Paris Convention and WIPO and a party to the Madrid Agreement and Protocol.

 

Trade mark registration is the primary means for protecting trade mark rights in China.  China operates a “first to file” system and, with the exception of well-known trade marks, China does not recognise trade mark rights acquired through use.  Therefore, registration of trade marks is essential to secure protection.  It is also important to consider registration of Chinese character equivalents to a foreign mark.

 

A trade mark means any visual sign, including words, devices, letters, numbers, three-dimensional signs and combinations of colours, capable of distinguishing the goods of one undertaking from those from others.  Although China uses the International Classification, it has adopted a “sub-class” system which means that similar trade marks can co-exist in the same class of the Register provided that they cover goods or services in different sub-classes, or even sub-paragraphs of sub-classes.  Trade mark pirates have been quick to take advantage of the sub-class system.  China operates an examination system and applications will be examined as to formality, inherent registrability and conflict with prior marks.  Certain marks may also be prohibited by law or other reasons. 

 

Chinese trade mark registrations are valid for 10 years, renewable for successive periods of 10 years.

 

Trade mark infringement includes the use of a trade mark which is identical or similar to a registered trade mark in respect of the same or similar goods or services for which the trade mark is registered, selling goods or providing services knowing that the trade mark is applied without the authority of the registered proprietor of the trade mark, and making or selling representations of a mark made without the authorisation of the registered proprietor.

 

Under the PRC Trade Mark Law a trade mark may be recognised as “well-known” by a court or the Trade Mark Office (including allowing an opposition or cancellation of a registration on the basis that a trade mark is a reproduction, copy or translation of a well-known trade mark).  The evidentiary burden of proof to establish a well-known trade mark in China can be high.  However, therecognition confers additional protection on registered and unregistered well-known marks. 

 

A Third Revision has been under discussion since 2006 and proposes major changes to the law including allowing the registration of sound, smell, single colour and motion marks and multi-class applications.

 

Patents and Designs

 

China’s Patent Law was first introduced in 1984 and was amended in 1992, 2000 and 2008 to comply with TRIPs and WTO requirements.  The Third Revision of China’s Patent Law which took effect on 1 October 2009 introduced substantial changes to bring the law even more in line with international developments including requirements for absolute novelty, a prior art defence, prohibiting double patenting (i.e. of utility model and invention patents), genetic resources disclosure requirements, increased statutory damages for infringement, introduction of a Bolar-type exemption and international exhaustion of patent rights.  The amended law also introduces a security inspection filing requirement for inventions-creations created in China.     

 

Under the Patent Law, three kinds of patents are available:

 

  • invention patents which provide a new technical solution relating to a product, process or improvement;
  • utility models which cover any new technical solution relating to the shape, structure, or their combination, of a product which is fit for practical use; and
  • design patents which protect any new design of shape, pattern or their combination which has aesthetic appeal and is applied to an industrial product . 

 

The three requirements for granting a patent are novelty, utility and inventiveness.  The term for an invention patent is 20 years from the filing date in China.  The term for a utility model or design patent is 10 years from the filing date in China.

An invention or utility model patent is infringed by anyone who, without the consent of the patent owner, makes, uses, offers for sale, sells or imports the patented product for production or business purposes.  An invention patent is also infringed by anyone who uses the patented process or uses, offers for sale, sells or imports products obtained through the patented process for production or business purposes.  A design patent is infringed by anyone who, without the consent of the design owner, makes, offers for sale, sells, or imports products incorporating the patented design for production or business purposes. 

 

 

Copyright

 

The Copyright Law was adopted in 1990 and has been amended in 2001 and 2010.  The Copyright Law protects:

 

  • works of Chinese nationals or entities, regardless of whether or not the work is published;
  • any work of a foreigner, provided that there is relevant bilateral treaty between China and the foreigner’s country of origin or residence, or a multilateral treaty which has been acceded to by both China and the foreigner’s country of origin or residence;
  • works of foreigners first published or simultaneously published in China;
  • works of foreigners first published or simultaneously published outside of China in a country that is signatory to an international treaty to which China has acceded.

 

China has acceded to the Universal Copyright Convention, the Berne Convention and the Geneva Convention for the Protection of Producers of Phonograms against Unauthorized Reproduction of their Phonograms.

 

Protected works include literary works, oral works, musical and dramatic works, “quyi” (folk art) and choreographic and acrobatic works, artistic and photographic works, engineering design and product design blueprints, architectural works, maps and diagrams, film, television and video works and computer software. 

 

Registration of copyright is not necessary but it is possible to record copyright with the copyright authorities and registration can be a convenient way for foreign litigants/complainants to produce evidence on the date of creation and ownership of copyright beforea Chinese court or relevant government agencies.

 

Copyright arises on the date of creation of the work.  The term of protection varies depending on the kind of work.  Generally, if the author is the owner of the copyright, the term of copyright is the life of the author plus fifty years.  The term of copyright in an employee work is fifty years from the date of first publication.  The term of protection for moral rights is perpetual.

 

Registration of computer software is specifically regulated under the Computer Software Protection Regulations andMeasures for Computer Software Registration. Separate rules also govern the dissemination of copyright materials and activities related to providing information services via the Internet.

 

Acts of copyright infringement include copying and publishing a copyright work without the consent of the copyright owner, falsely claiming authorship of a copyright work and adapting, translating, annotating or editing a copyright work without the consent of the copyright owner.

 

Layout-Designs of Integrated Circuits

 

The Regulations for Protection of Layout-Design of Integrated Circuits were adopted in 2001.  Applications for layout-designs must be filed with the State Intellectual Property Office (“SIPO”).  The application is subject to examination and a registration is valid for ten years from the date of filing, or the date of first commercial exploitation, whichever comes first.

 

Anti-Unfair Competition

 

The Anti-Unfair Competition Lawwas adopted in 1993 and prohibits the unauthorised use of the name, packaging or decoration peculiar or similar to a well-known product if such use causes the goods to be confused with the well-known product, and misleads buyers to mistake them for the well-known product.  A “well-known product” is “a product which is known and has a certain degree of reputation among the relevant public in the territory of the PRC”.  The factors that need to be taken into consideration when determining whether a product is well-known include the duration and geographical extent of sales of the product; the product’s revenue and market share and the duration, extent and geographical area of any advertising of the product.

 

The Anti-Unfair Competition Law also protects know-how and trade secretsThe kind of information that can be protected is quite broad but it must not be generally known or easily obtained by a person in the relevant field.  It should also have practical and commercial value, or be capable of conferring a competitive advantage on the owner.  Owners of trade secrets must adopt reasonable and appropriate protective measures in order to be eligible for protection.

 

The Chinese IP regime provides an infrastructure which enables administrative as well as criminal and civil enforcement of rights.  Administrative enforcement can offer a quick solution for straightforward infringement problems.  The judicial system is used for more complex infringement cases and/or cases where there is a great deal at stake.

 

Technological revolution and economic globalization has led to the recognition that IP is a strategic resource and core to competitiveness for Chinese and foreign companies alike.  Whilst it will be sometime before IP protection reaches the level of more developed countries, IP law reform in China remains a constant work in progress.

 

 

For further information, please contact:

 

Catherine Zheng, Deacons 

catherine.zheng@deacons.com.hk

 

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