36 DEC. 2016
2016 ID5 joint statement.........................................2
China vows to strengthen protection of IPRs...............3
Mr. Hao Ma was elected president of AIPPI...................3
China's applications for evaluation report of patent for design exceed 20,000....................................................4
The China Trademark Office approved the registration of the first sound trademark filed by a foreign applicant... 4
JEEP vs. BATTLEFIELD JEEP in Chinese by CCPIT was selected as excellent case................................5
"YKK" recognized as well known trademark by the Supreme Court.....................................................6
China's new patent infringement trial rules become effective - introduction to the Judicial Interpretation (II) regarding patent infringement..................................7
Patent litigation in China (I)....................................13
Guidance on the Regulations of Reducing Patent Fees in China.............................................................18
Practical tips for managing annuities in China............20
Judgment of distinctiveness of trademarks combining 3D marks and other elements................................22
A flexible approach to law making ...............................29
From the Editor
The coming year of 2017 means more to us. We are going to celebrate our 60th anniversary. We stick to being one of the leading IP law firms in China depending on our standout performance in both prosecution and contentious practices. It's our experience, energy, forward-thinking and dedication in IP practice that makes us trustworthy. 2017 will be a new start for us!
Besides the significant IP news, we discussed continuously in this issue the Judicial Interpretation (II) regarding patent infringement released by the Supreme People's Court. Staying with patent litigation, we introduced the basic practices in terms of form and substance.
Meanwhile, our experts in the administrative department probed into the details of the new Regulations of Reducing Patent Fees and shared their experience on how to manage annuities in China.
Elsewhere, we discussed judgment of distinctiveness of trademarks combining 3D marks and other elements, considering that it is still hard to have the distinctiveness of a 3D mark recognized by examiners and judges.
Finally, we revealed through 3 cases the great discretion of the judges in trying IP cases. Although we welcomed generally the judges' active roles in these cases, we cautioned that judges should be prudent in applying their discretion.
1. 2016 ID5 joint statement
The European Union Intellectual Property Office (EUIPO), the Japan Patent Office (JPO), the Korean Intellectual Property Office (KIPO), the State Intellectual Property Office of the People's Republic of China (SIPO), and the United States Patent and Trademark Office (USPTO) (hereinafter collectively referred to as the "Partner Offices") met in Beijing, China, on Nov 1-2 , 2016 at the 2016 ID5 annual meeting. The World Intellectual Property Organization (WIPO), being invited as observer, participated the meeting.
The Partner Offices reiterated the ID5 objectives adopted at the inaugural ID5 annual meeting in 2015, including promotion and furtherance of the development of highlyefficient and interoperable industrial design protection systems.
Recognizing the importance of providing better services to users and the public and of further promoting innovation in the industrial design sector, the significance of in-depth cooperation among the Partner Offices for ensuring concrete and tangible ID5 deliverables, and the necessity of promoting transparency of ID5 cooperation, the Partner Offices reached further consensus on aspects of general principles and cooperation areas as follows to fulfill ID5 objectives.
The Partner Offices decided to continue cooperation through collaboratively developed project-focused methodology under the principle of consensus through consultation, ensuring deliverables benefiting stakeholders, Partner Offices and ID5 design systems.
The Partner Offices decided to cooperate on industrial design topics including examination practice studies, IT support systems, industrial design classification, quality, statistics, etc., and to work together to explore possible solutions to emerging technologies and related new industrial design issues.
The Partner Offices decided to launch 12 projects at the current stage, namely:
Development and Maintenance of an ID5 Website
Compilation of Industrial Design Statistics
Catalogue of Eligibility for Industrial Design Protection
Catalogue of the View and Drawing Requirements for Designs
Study of Priority Document Exchange by ID5 Offices
Study of Practices of Priority Rights for Industrial Designs by ID5 Offices
Study of Design Classification Conventions & Practices
Comparative Study of Practices Concerning Product Indications
Analysis of Underlying Economic Factors and IP Office Actions on How They Impact Global Design Filings
Comparative Study of the Application of a Grace Period for Industrial Design Applications
Comparative Study of Partial Designs as an Effective Means of Protection for Industrial Design Innovation
Study of Practices on Protection of New Technological designs
Deliverables of the above projects are expected to benefit users and the public not only by enhancing efficiency and quality of Office's work but also by facilitating users' understanding on existing systems and reducing their burden.
The Partner Offices decided to make a set of rules for functioning of ID5 ensuring that ID5 is conducted in an efficient and effective manner.
The Partner Offices endeavor to ensure that inputs of ID5 stakeholders (e.g. users, the public, examiners from ID5 countries/region) will be collected and taken into account during the advancement of cooperation, and project progress will be reported. To enhance openness and transparency, the Partner Offices decided to establish an ID5
cooperation website (www.id-five.org) as an effective platform for sharing ID5 information and its progress with the public.
Signed in Beijing, China
1 November 2016
2. China vows to strengthen protection of IPRs
On Nov. 27, 2016, China released a Guideline on better protection of property rights, in an effort to shore up social confidence and to promote social justice. The Guideline highlights, among others, the intent of strengthening protection of intellectual property rights (IPRs).
In particular, the Guideline calls for,
intensifying the punishment for IPR infringements by increasing the legal cap on liability, exploring and establishing the punitive damage system for infringing IPRs such as patent rights and copyrights, and urging infringers to pay punitive compensation for his/her malicious behaviors and any reasonable expenses of right owners for preventing infringement, thus increasing the costs for IPR infringement;
establishing working mechanism for collecting source information of counterfeiting products and including willful infringement behaviors over IPRs into the credit records of the relevant enterprises or individuals, so as to further push forward the information disclosure of administrative cases of IPR infringement;
improving the working mechanism for judicial examination on IPR cases to ensure an active role of the intellectual property courts in advancing the adjudication system of combined trials of criminal, civil and administrative IPR cases, so as to strengthen the convergence of administrative enforcement and criminal justice to intensify the judicial protection of IPRs;
improving the foreigner-related IPR enforcement mechanism by strengthening the international cooperation of criminal enforcement and intensifying the investigation of foreigner-related intellectual property criminal cases;
cracking down upon unfair competition, strengthening protection of brand reputation;
combining protection and utilization of IPRs, fastening the establishment of mechanisms and platforms for
transfer of IPRs to speed up exploitation of IPRs.
In a very recent patent infringement judgment made by Beijing Intellectual Property Court on Dec. 8, 2016 regarding a patent for a USBKey used by banks, the Court supported the patentee's claimed damages of 50 million RMB (about USD 7,241,969) including the damages of 48,142,000 RMB (about USD 6,972,857) calculated on the amount of the infringing products multiplying the reasonable profits of each product, the inferred damages of 858,000 RMB (about USD 124,272) where the defendant refused to submit the evidence of sales volumes as well as reasonable expenses of 1 million RMB (about USD 144,839) of the right owner for enforcing the patent. It seems that the courts have been following the spirits of the above Guideline in the trial of IPR cases.
3. Mr. Hao Ma was elected president of AIPPI
Mr. Hao Ma, President of CCPIT Patent and Trademark Law Office, was elected the president of International Association for the Protection of Intellectual Property (AIPPI) at the World Intellectual Property Conference held in Milan, Italy on the afternoon of September 20 (local time), becoming the first Chinese top leader in the 120-year history of the association.
Established in 1897, AIPPI is the first international nongovernmental organization devoted to the development and progress of intellectual property and the main nongovernmental consultative institution of WIPO on IP rights. Headed in Switzerland, AIPPI has more than 9,000 members from about 100 countries and regions including Europe, North America, Central and South America, Asia, Oceania and Africa and has branches in 63 countries and 2 regions respectively.
Established in 1982, AIPPI China is the first Intellectual Property Association in China, with more than 350 members presently. At the World Intellectual Property Conference of 2012 held in Seoul, Hangzhou, China succeeded in bidding for the right to host the World Intellectual Property Conference 2020, which will be the first World Intellectual Property Conference held in China since the establishment of the Association.
The election of Mr. Hao Ma marks that the development of intellectual property undertaking in China has drawn the attention of the world and the status as well as the influence
of China in global intellectual property matters have been enhanced and promoted, which in turn will further benefit the communication and cooperation in the area of intellectual property between China and the world.
4. China's applications for evaluation report of patent for design exceed 20,000
According to the data from the State Intellectual Property Office of China (i.e. SIPO), as of Oct. 28, 2016, the total amount of applications for evaluation report of patent for design exceeded the benchmark number of 20,000. The definition of "evaluation report" was introduced in the present Patent Law on Oct. 1, 2009, and is applied to a patent for design or utility model, which is granted without substantive examination.
6,032 applications were applied for the evaluation report of patent for design in the year of 2015, while in 2016 and to the date of Oct. 28, 7,004 applications for evaluation report of patent for design were submitted to SIPO. It is predicated that the number of the applications for evaluation report of patent for design will continue to grow. The purpose of an evaluation report, among others, is to enable a patent owner to evaluate whether his patent for design is valid and to block a patent owner from enforcing his patent for design or utility model, which is obviously not new. A court would be inclined to stay a patent infringement litigation if the
evaluation report shows that the involved patent for design is obviously not new and the defendant has already filed a request for invalidation in time with the Patent Reexamination Board of the SIPO.
According to the drafted amendment to the current Patent Law, it is expected that the role of the evaluation report of patent for design or utility model will be further enhanced.
5. The China Trademark Office approved the registration of the first sound trademark filed by a foreign applicant
On August 21, 2016, the China Trademark Office approved the use of sound trademark "SOFY" on commodities such as sanitary napkins by Unicharm, Co., Ltd, being the first sound trademark registered by a foreign applicant in China. Located in Ehime Prefecture, Japan, and established in 1961, Unicharm's main business covers baby products such as diapers, feminine hygiene products such as sanitary napkins, pet products and health care products.
After the implementation of the new Trademark Law from May 1, 2014, the Trademark Office started to receive and examine sound trademarks. According to the Trademark Office, there have been about 400 sound trademark applications in the past two years, with only 3 among them being approved. The first case is the prelude of the broadcasting program by the CCTV. The second one is the
"SOFY" by Unicharm and the third one is "Holding high hopes for child-Xiaobawang Learning Machine" by GuangDong YiHua Investment Group CO. Ltd. The first and third cases both relate to sound trademarks filed by domestic applicants.
According to Article 13 of the Implementing Regulations of the Trademark Law, an application for trademark registration for a sound-logo shall include in the petition a corresponding declaration thereof. Meanwhile, the applicant shall submit a sample of the sound accorded with the relevant requirements, and a description of the applied sound trademark to clarify how to use it. The description of the sound trademark shall be in the form of staff or numbered musical notation with attached literal description. Otherwise, the trademark shall be described literally in accordance with the sound sample.
The Implementing Regulations of the Trademark Law, although stipulates the formal requirements for registration of a sound trademark, it lacks of correspondent and explicit stipulation on the material elements such as the distinctiveness and similarity of the sound trademark. The registered three sound trademarks by far are all approved by the Trademark Office at the stage of examination.
6. JEEP vs. BATTLEFIELD JEEP in Chinese by CCPIT was selected as excellent case
In the 2016 China Trademark Festival held in Kunshan, China, from October 27 to October 30, 2016, China Trademark Association announced the 2015-2016 Selection of Excellent Cases , among which, the case JEEP vs. BATTLEFIELD JEEP in Chinese handled by CCPIT PATENT AND TRADEMARK LAW OFFICE was selected as one of the twenty three Excellent Cases.
The excellent cases were selected according to the standards of being innovative, effective, typical, influential and exemplary by professionals and experts from the courts, universities and trademark administrative authorities with the purpose of reviewing important cases and events concerning trademarks in 2015 and 2016 and set up the standard of excellent cases and give full play to the guiding role of the excellent cases.
The basic information of the case JEEP vs. BATTLEFIELD JEEP in Chinese is as follows:
The counterparty ZHONGSHAN SHIQI YUANSHENG GARMENT CO., LTD. ( hereinafter referred to as YUANSHENG) filed trademark applications for "BATTLEFIED JEEP in Chinese" in respect of clothing in Class 25 and bags in Class 18 in July 24, 2008 and sales for other in Class 35 on April 12, 2011, against which, CCPIT filed oppositions on behalf of CHRYSLER GROUP LLC. ( hereinafter referred to as CHRYSLER) based on CHRYSLER's well-known trademarks "JEEP" and "JEEP in Chinese" on automobiles and prior registered trademark "JEEP" on clothing and bags, etc.
China Trademark Office did not support CHRYSLER's oppositions and China Trademark Review and Adjudication Board did not support CHRYSLER's request for review either. CHRYSLER then authorized CCPIT to file administrative litigations with Beijing No. 1 Intermediate court. The Intermediate Court held that the trademarks were somewhat dissimilar and the evidence submitted by YUANSHENG proved that the opposed trademark had been used and formed stable market order and as a result the relevant public could distinguish the trademarks from each other.
CCPIT filed appeals with Beijing High People's Court on behalf of CHRYSLER. After hearing, the High Court made the final judgment revoking the judgment of the Intermediate Court and the decision made by the TRAB: the opposed trademark wholly contains "JEEP in Chinese" which is corresponding to "JEEP" and constitutes similar trademark used on similar goods; considering the prior use and high reputation of the CHRYSLER's "JEEP" trademark on clothing and bags, the coexistence of the trademarks on similar goods is likely to cause confusion among the consumers; the opposed trademark is an imitation of
CHRYLSER's well-known trademarks on automobiles and is liable to mislead the relevant public and weaken and dilute the distinctiveness of CHRYSLER's well-known trademarks; the evidence submitted by YUANSHENG is insufficient to prove that the opposed trademark can be distinguished by consumers and will not cause confusion through its use and promotion; and therefore, the opposed trademark shall not be registered.
The selection of the case JEEP vs. BATTLEFIELD JEEP in Chinese as an excellent case embodies the purpose of legislation to curb free riding and rush registration by a third party, protect the prior rights of the trademark owners, and to eliminate the likelihood of confusion in the market. The case is significant for CHRYSLER to protect its legitimate rights and interests and is also helpful to purify the market, eliminate confusion and protect the interests of the consumers.
7. "YKK" recognized as well known trademark by the Supreme Court
The Supreme People's Court recently rendered a decision on the retrial petition filed by YKK Corporation against the Trademark Review and Adjudication Board and Ruianshi Libo Motor Vehicle Parts Co., Ltd., concerning the YKK trademark opposition administrative litigation. In the Administrative Retrial Judgment No. 67 of 2016, the claim for cross-class protection of YKK as a well-known trademark is supported by the Supreme Court. This retrial case has attracted extensive attention as it concerns the hot spot issue about how to determine the protection scope of wellknown trademark.
The Supreme Court rules that prior to the filing date of the opposed mark, the YKK trademark of the petitioner has acquired high reputation on the goods zippers, and based upon which, the YKK trademark can enjoy protection over the goods vehicle interior decoration products. The Supreme Court reiterates in its decision that the cross-class protection scope of a well-known trademark shall depend on the distinctiveness of the mark, the degree of awareness by relevant public, the relevance of the goods and the balance of interests of involved parties. Meanwhile, in light of the trust protection principle under the administrative law, the Supreme Court emphasized the importance of the principle of consistency in application of law, in order to safeguard transparency and predictability in the application of
Congratulations to another victory of the trademark litigation team of the firm before the Supreme Court, being the result of superb professionalism and continuous dedication of the whole team.
China's New Patent Infringement Trial Rules Become Effective - Introduction to the Judicial Interpretation (II) regarding Patent Infringement of the China's Supreme People's Court (II)
By Xiaojun Guo, Weiwei Han (Ms.)
II. Infringement Determination
1. Equivalents to Functional Features
Article 8 of the Judicial Interpretation (II) reads,
A functional feature is a technical feature defining the structure, composition, step, condition or their relations by its function or effect in the relevant invention-creation, unless a person of ordinary skill in the art is able to directly and clearly determine the specific embodiment for achieving such function or effect by reading purely the claim.
Where, as compared to a technical feature in the description and its accompanied drawings essential for achieving aforesaid function or effect, the corresponding technical feature of the accused technical solution performs the same function by substantially the same way to achieve the same result, and can be contemplated without creative work by a person of ordinary skill in the art at the time of the accused infringement, the people's court shall determine that such corresponding technical feature is identical with or equivalent to the functional feature.
For a functional feature, most of the courts in China take a strict attitude to its application and interpretation. This article provides that the equivalency of a functional feature is basically determined by the "triple-identity plus no creative work" test. Said "substantially the same way" is determined as compared to the technical features in the description essential for realizing the function or effect as defined in the claim, while the "same function" and "same result" are those defined in the claim instead of those of the essential technical features in the description. This provision is different from Article 17 paragraph 2 of the Several Provisions of the Supreme People's Court on Issues Relating to Application of Law to Adjudication of Cases of Patent Disputes, which requires only "substantial triple-identity" and
"creative work" in determining the equivalency of a functional feature and reads,
An equivalent feature refers to the feature which performs substantially the same function, in substantially the same way to achieve substantially the same result as the feature recited in the claim, and which can be contemplated, at the time of the accused infringement, by a person of ordinary skill in the art without creative work.
Further, Article 8 of the Judicial Interpretation (II) doesn't make a discrimination between the timings of the literal infringement and the infringement under the doctrine of equivalents.
This article also excludes certain terms or expressions from the extension of functional features when their corresponding structures are clearly and well known from their plain meanings, such as transformer, clutch etc.
2. Temporary Protection
Article 18 of the Judicial Interpretation (II) reads,
Where a right holder files a lawsuit to request an entity or individual to pay appropriate fees for exploiting his invention during the period from the date of publication of the invention patent application to the date of announcement of grant of the invention patent in accordance with Article 13 of the Patent Law, the people's court may determine the fees reasonably by referring to relevant royalties of the patent.
Where the protection scope claimed by the applicant upon the publication of the invention patent application is inconsistent with the protection scope of the patent upon the announcement of grant, and the accused technical solution falls within both of the foregoing two protection scopes, the people's court shall determine that the defendant exploited the relevant invention
during the period stated in the preceding paragraph; where the accused technical solution falls within only one of the two protection scopes, the people's court shall determine that the defendant didn't exploit the invention during the period stated in the preceding paragraph.
Where a party, without consent of the patentee and for the business purposes, uses, offers to sell, or sells the products that were manufactured, sold or imported by another party during the period stated in Paragraph 1 of this Article after the date of announcement of grant of the invention patent, and such another party has paid or promised in writing to pay appropriate fees prescribed in Article 13 of the Patent Law, the people's court shall not side with the right holder asserting that the aforesaid act of using, offering to sell or selling has infringed the patent.
The temporary protection only applies to an invention patent and only when the accused product or process is within both the protection scopes defined by the claims in the published patent application and in the patent, can a temporary protection be obtained.
3. Sales Contract
Article 19 of the Judicial Interpretation (II) reads,
Where a sales contract of products is concluded in accordance with laws, the people's court shall determine that the selling as prescribed by Article 11 of the Patent Law have been constituted.
This article simply clarifies that the conclusion of a sales contract of products constitutes selling of the products and shall be infringing if the product or process involved falls within the protection scope of a patent.
In Liu Hongbin v. Beijing Jinglianfa Numerical Control Science and Technology Co. Ltd. and Tianwei Sichuan Silicon Industry Co. Ltd. [Supreme People's Court Min-ShenZi No. 1070/2015], the Supreme Court held that,
In determining the act of selling in the context of the Patent Law, the purpose of legislation of Article 11 of the Patent Law shall be taken into consideration so as to correctly formulate the relation between the act of offering to sell and the act of selling and to sufficiently protect right holders' interests. To this end, conclusion of a sales contract shall be taken as the watershed in affirming the act of selling, instead of the entry into effect of a sales contract, completion of payment in accordance with the contract, delivery of the subject matter or passing of title.
4. Products Directly Obtained from the Patented Process
Article 20 of the Judicial Interpretation (II) reads,
As regards the re-processing or re-treatment of a follow-up product obtained from the further processing or treatment of a product directly obtained from a patented process, the people's court shall determine that such re-processing or re-treatment does not belong to "use the product directly obtained by the patented process" as prescribed in Article 11 of the Patent Law.
Article 20 is simply a restatement of Article 13 of the Judicial Interpretation (I), which reads,
Where an original product is obtained by a patented process, the courts shall determine this as "the product directly obtained by the patented process" as prescribed in Article 11 of the Patent Law.
Where a follow-up product is obtained by further processing or disposing of the original product, the courts shall determine the act as "use the product directly obtained by the patented process" as prescribed in Article 11 of the Patent Law.
In Zhang Xitian v. Ouyi Pharmaceutical Co. Ltd. and Huasheng Pharmaceutical Co. Ltd. [Supreme People's Court Min-Ti-Zi No. 84/2009], the Supreme Court held that,
Said "product directly obtained by the patented process" as mentioned in Article 11 of the Patent Law refers to the original product obtained by using the patented process, but not the subsequent product obtained after further processing the original product. In this case, the product obtained directly by the patented process is a "DMSO-d6-solvate of D-tartrate salt of (S)-(-)-amlodipine" or a "DMSO-d6-solvate of L-tartrate salt of (R)-(+)-amlodipine", which is the intermediate product for producing "(S)-Amlodipine" or "(R)-Amlodipine". On the contrary, Levo-amlodipine is the deemed subsequent product obtained after further processing the above product and doesn't belong to the product directly obtained by the patented process.
5. Contributory Infringement and Inducement to Infringe
Article 21 of the Judicial Interpretation (II) reads,
Where a party, knowing that certain products are the materials, equipment, parts and components or intermediate items, etc. specifically for the exploitation of a patent, without consent of the patentee and for business purposes, provides such products to another party committing patent infringement, the people's court shall side with the right holder claiming that the party's provision of such products is an act of contributory infringement as prescribed by Article 9 of the Tort Liability Law.
Where a party, knowing that a product or process has been granted patent, without consent of the patentee and for business purposes, induces positively another party to commit patent infringement, the people's court shall side with the right holder
claiming that the inducement of the party is an act of inducing another party to commit infringement as prescribed by Article 9 of the Tort Liability Law.
In the past, a person assisting or inducing others to commit patent infringement was accused of joint infringement with the direct infringer where the two infringers have meaning contact. Once there is no meaning contact, the right holder can only sue the direct infringer.
This article intends to enhance protection of patent right so that even if there is no intention liaison, the patentee can sue the indirect infringer especially when his act of infringement is more significant than that of the direct infringement. However, a direct infringement is still deemed to be the precondition for indirect infringement in the case of contributory infringement or inducing infringement according to the Tort Law. The right holder shall bear the burden of proof to show direct infringement to the court even if the direct infringer might not be necessarily involved in the litigation.
Under this article, the contributory infringement establishes as long as the indirect infringer (e.g. the provider) knows the patented product or process, in which his own materials, equipments, parts and components or intermediate products are specifically applied, but still provides the same to the direct infringer without the permission of the patentee, irrespective of whether he knows the infringing act of the direct infringer.
III. Infringement Defense
1. Prior Art Defense
Article 22 of the Judicial Interpretation (II) reads,
Where an accused infringer defends on the basis of prior arts or prior designs, the people's court shall define the prior arts or prior designs pursuant to the Patent Law effective on the filing date of the patent.
Article 22 clarifies the application of the patent laws. The
current Chinese Patent Law (2009) takes, for example, the absolute novelty standard, that is, a technical solution published by prior use in a foreign country constitutes a prior art. While under the Chinese Patent Law of 2001, a technical solution published by prior use would not be a prior art.
2. Exception to Injunction
Article 25 of the Judicial Interpretation (II) reads,
Where a party, using, offering to sell, or selling patent-infringing products for business purposes without the knowledge that such products are manufactured and sold without consent of the patentee, proffers evidence showing the legitimate sources of such products, the people's court shall side with the right holder claiming that the aforesaid using, offering to sell, or selling shall be stopped, except that the user of the accused products proffers evidence to prove that it has paid reasonable quid pro quo for such products.
For the purpose of paragraph 1 of this Article, "without the knowledge" shall mean the circumstance where a party has no actual knowledge and ought not to have knowledge.
For the purpose of paragraph 1 of this Article, "legitimate sources" shall mean acquireing products through regular
business methods such as lawful sales channels or usual sales and purchase contracts. The party who engages in using, offering to sell or selling shall proffer relevant evidence consistent with trading habits to prove said legitimate sources.
Obtaining an injunction is normally one of the main purposes of the patentee to initiate a lawsuit against the accused infringer, especially in view of the fact that damages for patent infringement are rather low in China. Article 25 of the Judicial Interpretation (II) imposes restrictions on the patentee to obtain an injunction when the accused infringer obtains the patent infringing products bona fide, so that the later doesn't need stop the act of using the products. The patent owner might lose the market even if he win the lawsuit finally.
This article is much controversial and might not comply with
Article 70 of the Patent Law, which provides that,
Any person, who, for business purpose, uses, offers to sell or sells a patent infringement product, without knowing that it was made and sold without the authorization of the patentee, shall not be liable to compensate for the damages of the patentee if he can prove that he obtains the product from a legitimate channel.
3. Public Interest
Article 26 of the Judicial Interpretation (II) reads,
Where the defendant is found to commit patent infringement, the people's court shall side with the right holder claiming that the defendant shall be ordered to stop infringement; however, the people's court may, instead of ordering the defendant to stop the accused act, order the defendant to pay reasonable fees in consideration of the interests of the state or public interest.
This article clarifies that when the exploitation of a patent by the accused infringer involves state or public interest, the court may not issue an injunction but ask the infringer to pay certain compensation.
In Wuhan Jingyuan Environmental Engineering Co., Ltd. v. Kubota Kasui Corp. and Huayang Electric Power Co., Ltd. [Supreme People's Court Min-San-Zhong-Zi No. 8/2008], the Supreme Court affirmed the judgment of Fujian High People's Court that the two defendants shall pay Wuhan Jingyuan damages for infringement, but rejected the claim of ordering the defendant Huayang to stop the infringing act in view of the fact that the accused flue gas desulfurization system has been installed on the power plant of Huayang and has been put into operation, ordering to stop infringement will significantly harm the social and public
interest of the local residents.
4. Standard Essential Patent
Article 24 of the Judicial Interpretation (II) reads,
Where a recommended national, industrial or local standard clearly indicates the essential patent-related information, the people's court shall in general not side with the accused infringer defending that the exploitation of such standard does not need consent of the patentee and thus does not infringe the patent.
Where a recommended national, industrial or local standard clearly indicates the essential patent-related information and the patentee intentionally violates the obligation for licensing on fair, reasonable and non-discriminatory terms as committed in formulating the standard in consultation with the accused
infringer on the conditions for the exploitation and licensing of such patent, resulting in failure to conclude a patent licensing contract, the people's court shall, in general, not side with the right holder claiming stopping the exploitation of the standard by the accused infringer, if the accused infringer has no obvious fault in the consultation.
The conditions for the exploitation and licensing of a patent as mentioned in Paragraph 2 of this Article shall be determined upon consultation by the patentee and the accused infringer. Where no agreement is reached upon careful consultation, the parties may request the people's court to determine such conditions, in which case the people's court shall, on fair, reasonable and non-discriminatory terms, take into comprehensive consideration the degree of innovation of the patent, the role of the patent in the standard, the technical field to which the standard belongs, the nature and scope of application of the standard, the relevant licensing conditions and other factors to determine such exploitation and licensing conditions.
The provisions on the exploitation of a patent involved in a standard as otherwise prescribed by laws and administrative regulations shall prevail.
This article provides that the exploitation of a standard cannot constitute a defense when a recommended national, industrial or local standard clearly indicates the essential patent-related information. Also, this article clarifies the fair, reasonable and non-discriminatory conditions by which the patent right holder shall abide during the conclusion of a patent licensing contract and the consequences resulted from the violation of such conditions.
In Zhang Jingting v. Hengshui Ziya River Construction and Engineering Co. Ltd. and Hengshui Huaze Engineering Survey and Design Consultation Co. Ltd. [Supreme People's Court Min-Ti-Zi No. 125/2012], the Supreme Court held that,
Since the patentee has carried out his obligation of revealing the patented technology involved in the recommended standard, a person shall obtain allowance of the patentee when implementing the standard and pay license fees. Implementing the recommend standard incorporating the patented technology without the consent of the patentee or refusing to pay license fees shall constitute an act of infringing the patent incorporated in
The above article doesn't include any provisions on how to deal with the situation where the standard is not a recommended standard, since the Supreme Court thinks the SEP issue is too complicated and more cases are needed
before it becomes clear.
IV. Design Patent Infringement
1. Degree of Design Freedom
Article 14 of the Judicial Interpretation (II) reads,
When determining the level of knowledge and discriminability of an ordinary consumer to a design, the people's court shall normally consider the design space of the products in the same or similar category as the patented design at the time of infringement. Where the design space is relatively large, the people's court may determine that it is usually unlikely for an ordinary consumer to notice the minor differences between the compared designs; where the design space is relatively small, the people's court may determine that it is usually more likely for an ordinary consumer to notice the minor differences between the two compared designs.
According to Article 8 and Article 11 of the Judicial Interpretation (I), the people's court shall take "overall visual observation and comprehensive judgment" to decide whether the accused design is identical with or similar to the design patent and therefore infringes the design patent, pure functional features, materials and internal construction of the products shall not be considered, design features that are easily observed in normal use of the products and that differ the design patent from prior designs normally weigh more in assessment of infringement. Article 10 of the Judicial Interpretation (I) further provides that, the subject in deciding whether one design is identical with or similar to the design patent is the ordinary consumer of the product incorporating the patented design. Under the "overall visual observation and comprehensive judgment" test, the assessment of similarity between the compared designs requires a consideration of the overall visual impression they each create.
The Supreme People's Court introduced the "design space" as a factor in determining the level of knowledge and discriminability of an ordinary consumer to a design in Wanfeng motorcycle wheel case in 2010 [Supreme People's Court Xing-Ti-Zi No. 5/2010]. In this case, the Supreme Court held that,
There is less degree of design freedom for products with developed designs, a minute change of the design may produce a profound impression on the ordinary consumer, on the other hand, there is higher degree of design freedom for new products, the format and style may be diverse and a minute change will
normally not attract the notice of the ordinary consumer. So, for a very new product, generally a broader protection shall be imparted in comparison with a traditional product in the context
of design patent protection.
2. Designs of Products in Set
Article 15 of the Judicial Interpretation (II) reads,
For a patent for designs of products in set, where the accused design is identical with or similar to one of the designs, the people's court shall determine that the accused design falls within the protection scope of the patent.
According to Article 31 of the Chinese Patent Law, an application for a patent for design shall be limited to one design, two or more similar designs for the same product or two or more designs which are incorporated in products belonging to the same class and being sold or used in set may be filed as one application. Said products belonging to the same class and being sold or used in set are usually referred to as "products in set".
Article 15 of the Judicial Interpretation (II) simply affirms the current practice regarding the construction of the protection scope of a patent right for designs of products in set, which essentially defines a bundle of rights that are independent from each other. One of the designs of the products in set is invalidated doesn't mean that others are invalid and the patentee can sue an infringer on the basis of any of the designs.
3. Design of a Complicated product
Article 16 of the Judicial Interpretation (II) reads,
For a patent for design of a complicated product with a unique assembly relation among the individual components, where the accused design is identical with or similar to the design of the complicated product in its assembled sate, the people's court shall determine that the accused design falls within the protection scope of the patent.
For a patent for design of a complicated product with no assembly relation or with no unique assembly relation among the individual components, where the accused design is identical with or similar to the designs of all the individual components of the complicated product, the people's court shall determine that the accused design falls within the protection scope of the patent; where the accused design lacks the design of one individual component of the complicated product or is neither identical with nor similar to the design of one individual component, the people's court shall determine that the accused design doesn't
fall within the protection scope of the patent.
The Supreme People's Court defines two scenarios here: 1) design of a complicated product with unique assembly relation among the individual components; 2) design of a complicated product with no assembly relation or with no unique assembly relation among the individual components. In whichever scenario, only one single right can be obtained.
An example of a complicated product with unique assembly relation is an electric iron consisting of an iron body and an iron base. The Court considers that the value of the design of this type of product lies in the assembled state and therefore only the assembled state of the product shall be given protection. In other words, it is possible that a person misappropriates the design of one component of the product but can not be accused of design patent infringement.
While for a complicated product with no assembly relation or with no unique assembly relation among its individual components, such as a chess set, building blocks or poker, the Court considers that the value of the design lies in the designs of the individual components; since there is no assembled state or the assembled state is uncertain, protection of the design shall be focused on each of the component. So, only when the design of each of the components of the accused product is found to be identical with or similar to a design of a component of the design patent, can infringement be found. This one to one identity or similarity test between the respective components absolutely restrains the protection of the design of the type of complicated product.
What if an applicant files separate design applications for the individual components of the complicated product with or without unique assembly relation, can the patentee enforce his design patents effectively? The answer seems to be "yes". There's no precedent yet where a design patent is announced invalid or found unenforceable as the product incorporating the claimed design is a component of a complicated product.
4. Design of a Product with Variant States
Article 17 of the Judicial Interpretation (II) reads,
For a patent for design of a product with variant states, where the accused design is identical with or similar to the design in all its use states as shown in the relevant views, the people's court shall determine that the accused design falls within the
protection scope of the patent; where the accused design lacks the design in one of its use states or is neither identical with nor similar to the design in one of its use states, the people's court shall determine that the accused design doesn't fall within the protection scope of the patent. One example might be designs of foldable strollers. According to this provision, if the design patent covers a foldable stroller and illustrates the variant use states of the foldable stroller while the accused stroller is not foldable, the later might not be infringing. This is weird and obviously doesn't conform to the purpose of encouraging innovation.
Patent litigation in China (I)
By Chuanhong Long, Guoxu Yang
1. Types of Intellectual Property Rights & Granting Procedure
1.1 Types of Intellectual Property Rights
The Chinese legal system provides patent protection for inventions.There are three types of patents under Patent Law, namely a patent for an invention, a patent for a utility model and a patent for a design. Inventions could also be protectable as trade secrets under the Chinese legal system. Indeed, before the inventor or other relevant applicant files a patent application regarding an invention, the invention should be kept as a trade secret to meet the novelty requirement under Patent Law. Alternatively, some inventions may be suitable for keeping a trade secret rather than being protected as a patent because a trade secret can be protected indefinitely as long as it can be kept secret, whereas a patent has a limited term of protection. Patent rights and trade secrets are both based on statutory law in the Chinese legal system.
1.2 Grant Procedure
Patent for invention
After a patent application for an invention has been filed with the Intellectual Property Office, it is published promptly after 18 months counting from the filing date (or priority date, if any). The applicant may request substantive examination within three years of the filing date (or priority date, if any) so that the patent application for the invention may enter into a substantive examination phase. After the substantive examination, if it meets the novelty and inventiveness requirements and other requirements for formalities under Chinese Patent Law and its Implementing Regulations, a patent right will be granted and published in the official gazette. The patent application is required to be amended through one or more official actions. If the problem cannot be overcome by means of such amendments, the patent application may ultimately be rejected.
Patent for utility model and design
After a patent application for a utility model or design has been filed with the Intellectual Property Office, it only checks
the formality requirements under Chinese Patent Law and there is no substantive examination thereof. The patent for a utility model or design may be granted and published in the official gazette if the formality requirements are met. Amendments should be notified to the Intellectual Property Office.
A trade secret arises automatically without the need for any grant procedure as long as it has specific economic value and is not known to the public. In addition, reasonable security measures must be taken to ensure that the trade secret remains confidential.
1.3 Timeline for Grant Procedure
The average granting procedure typically lasts two to three years for a patent for an invention, and six to 12 months for a patent for a utility model or design. The applicant does not need a representative, eg a (patent) attorney, before the Intellectual Property Office to initiate grant proceedings if the applicant is a Chinese individual or entity. The applicant does need a representative before the Intellectual Property Office to initiate grant proceedings if the applicant is a foreigner. The nationality or residency of inventors is irrelevant to this issue. The average cost to grant covering all official fees, attorney fees and possible translation fees is approximately CNY25,000 to CNY35,000 for patent for an invention, about CNY15,000 for patent for a utility model and about CNY7,500 for a design.
1.4 Term of Each Intellectual Property Right
For the patent for an invention, the protection term is 20 years from the filing date before the Intellectual Property Office, while that for a patent for a utility model and design is ten years. For a trade secret, the protection term is as long as it can be kept confidential.
1.5 Rights and Obligations of Owner of Intellectual Property Right
Typically, an IP right includes patents, trademarks, copyrights and trade secrets in China. The owner of an IP right is entitled to seek a preliminary/interim injunction, a
permanent injunction and damages. The owner of an IP right other than a trade secret is obliged to pay annual fees or renewal fees. The owner of a trade secret is obliged to take reasonable measures to keep the trade secret confidential in order to qualify as a trade secret and be protected.
1.6 Further Protection After Lapse of Maximum Term
There is no further protection for technical IP rights after their maximum term has lapsed. However, if the technical IP enjoys another form of IP protection at the same time, such as a design patent, it may also enjoy copyright protection, so the copyright protection may still continue even if the maximum term for the design patent has lapsed.
1.7 Third Party Rights to Participate in Grant Proceedings
Third parties have the right to participate during grant proceedings, eg the third parties may file third-party observations with the Intellectual Property Office during the examination procedure of a patent application. The examiner may consider the observation and accept the opinion and prior art references if deem fit. However, since the procedure is an ex parte procedure, the examiner will not give any feedback regarding the observations. The third-party observation should be filed as early as possible so that the examiner has a chance to consider it before they decide to grant the patent.
1.8 Remedies Against Refusal to Grant Intellectual Property Right
If the Intellectual Property Office refuses to grant a patent right, the applicant may request a re-examination by the Patent Re-examination Board. If the rejection decision is upheld by the Patent Re-examination Board, the applicant may file a lawsuit with the Beijing Intellectual Property Court against the Patent Re-examination Board and the decision of the Beijing Intellectual Property Court may be further appealed to the Beijing High People's Court.
1.9 Consequences of Failure to Pay Annual Fees
Failure to pay the annual fees may result in the abandonment of the patent right and the patent will be terminated by the Intellectual Property Office if the problem is not remedied in a timely manner. The patentee has six months to resume the patent right by making payment of the annual fees. If the annual fees are paid within one month of the expiry of the term, no late fees are required. If the annual fees are paid later than this, late fees will be required and will increase on a
2. Initiating a Lawsuit
2.1 Actions Available Against Infringement
In China, at least two kinds of actions are available to the owner of a technical IP right against infringement of that right, that is, judicial action and administrative action.
2.2 Third Party Remedies
To remove the effects of the technical IP right, eg a patent right, any party can request the Patent Re-examination Board to declare the patent right invalid for specific reasons with the necessary supporting evidence. No legal or commercial interest is required.
2.3 Courts with Jurisdiction
For patent matters, the first instance courts are of intermediate level and are specially designated by the Supreme Court. In Beijing, Shanghai and Guangzhou, special Intellectual Property Courts were set up in 2014 and exclusively receive patent matters in those areas. The second court would be the higher court over these intermediate courts. There is no third-instance court, but if the parties disagree with the second court decision, they may file a retrial with the Supreme Court. For a patent infringement dispute, the courts where the defendant is located or where the infringement takes place have the jurisdiction to receive the case for the first instance. A patentee or an interested person may also sue the manufacturer of the infringing product at the court where the seller is located or where the selling/offer for sale takes place by adding the seller as a co-defendant.
2.4 Prerequisites to Filing a Lawsuit
There are no prerequisites to file a lawsuit, such as issuing a formal demand letter, warning letters, engaging in mediation, etc in China.
2.5 Legal Representation
There is no need to be represented by a lawyer for the parties in an IP dispute before Chinese courts. However, if the party is a foreigner or foreign company and wishes to be represented by a lawyer, they must be represented by a Chinese lawyer, according to Chinese law.
2.6 Interim Injunctions
Interim injunctions are available in China. Generally, the following conditions should be met so that an interim injunction may be granted by the court:
- high likelihood of infringement;
- validity of patent right;
- irreparable losses caused if interim injunctions are not granted;
- whether the interim injunctions would be harmful to the public interests;
- whether the applicant provides a bond. The bond will be used to compensate the losses for the suspect infringer due to the cessation of relative acts under the interim injunction, if the application for an interim injunction is found to be wrong, for example the patent is invalidated or no infringement is found.
2.7 Protection for Potential Opponents
The potential opponent can normally do nothing to stop the granting of an interim injunction. The potential opponent may request re-examination of the grant of interim injunction but cannot stop the execution of the interim injunction. However, in certain cases, at the discretion of the court, the court may invite the potential opponent to discuss the matter in order to investigate whether the conditions have been met in granting the interim injunction. Under such circumstance, the potential opponent may have a chance to raise counterarguments as to why an interim injunction should not be granted.
2.8 Special Limitation Provisions
A statutory limitation of action may apply in IP matters. The right holder will be required to enforce their patent right within two years from the time they knew or should have known of the infringement. Otherwise, they will not win the case because of the statutory limitation. However, if the infringement continues, the right holder is entitled to request that the infringer stop the infringement without the two-year limitation, but may only collect damages for two years before filing the lawsuit.
2.9 Mechanisms to Obtain Evidence and Information
It is a normal principle that it is the party who makes the claim who carries the burden of proof. In a patent infringement proceeding, the plaintiff has to prove the
infringement. The only exception is that, if the patent concerned is a method patent for producing a new product, the burden of proof is transferred to the other party, ie the other party has the obligation to prove that they are actually using a method different from the patented method. Even under these circumstances, the plaintiff still bears the burden to prove that the product is new and that the alleged infringing product is the same as the product made by the patented method. For information processed by a third party, such as a government department or an authority, which is difficult to be obtained by the party, the party may request the court to obtain the information according to Civil Procedure Law. Recently, the burden of proof rule has been under review, and the defendant is also required to provide evidence if the plaintiff has tried his best to provide specific evidence. Otherwise, the defendant bears the unfavourable consequences. For example, according to the newly issued Supreme People's Court interpretation of patent infringement issues, where the actual loss of the patent holder due to infringement is difficult to determine, the People's Court should request that the patent holder provide evidence to prove the benefit obtained by the infringer as a result of the infringement according to the provision of Article 65(1) of Chinese Patent Law. Whilst the patent holder has provided initial evidence regarding the benefit obtained by the infringer, but the accounts and materials relating to the infringing acts are under the control of the infringers, the people's court may order the infringers to surrender the accounts and materials. Where the infringer refuses to surrender without cogent reason or delivers forged accounts and materials, the people's court may determine the benefit obtained by the infringer as a result of the infringement by reference to the patent holder's claim and the evidence as submitted.
2.10 Initial Pleading Standards
According to Article 119 of Civil Procedure Law, an action to be instituted must meet all of the following conditions:
- the plaintiff is a citizen, legal person or any other organisation with a direct interest in the case.
- there is a clear defendant.
- there are specific claims, facts and reasons.
- the case is within the scope of civil actions accepted by the people's court and under the jurisdiction of
the people's court in which the action is instituted.
There are no special provisions for lawsuits in IP proceedings that differ from non-IP proceedings. It is generally possible to supplement pleadings with additional arguments before the expiry of the term of evidence submission. The limitation may not apply if the nature of the legal relationship claimed by the party or the effectiveness of a civil action is not identical to the conclusion of the people's court according to the facts of the case. In such a situation, the people's court should request the party to modify the pleadings.
2.11 Representative or Collective Action
The legal system in China permits representative or collective actions for general civil proceedings. According to Article 54 of the Civil Procedure Law, where the subject matter of an action for each party is of the same kind, and the parties on one side of an action are numerous, but the exact number of such parties is uncertain at the time when the action is instituted, the people's court may publish a notice to describe the case and claims and notify right-holders to register with the people's court within a certain period of time.
The right holders who have registered with the people's court may recommend a representative or representatives to participate in the litigation; if no representative is recommended, the people's court may appoint a representative or representatives in consultation with the right holders who have registered with the people's court.
The litigation conduct of those representatives will bind all the parties represented. However, to modify or relinquish any claims, admit any claims of the opposing party or reach a settlement, the representatives must obtain consent from the parties represented.
The judgment or ruling issued by the people's court will bind all right holders who have registered with the people's court. This judgment or ruling will also apply to actions instituted during the time limitation by rights holders who have not registered with the people's court. However, since the nature of IP rights proceedings may be different from a general civil case, such as a health damage case, due to product quality, or environment pollution etc, representative or collective actions seldom apply to IP rights proceedings.
2.12 Restrictions on Assertion of Intellectual Property Right
Restrictions may apply if the patentee acquires the patent right maliciously and enforces the patent right. The actions of the patentee may constitute abuse of the patent right and may not be supported by the people's court.
Acquiring the patent right maliciously means that the individual concerned was well aware that the invention or creation should not be granted a patent right, and had acquired the patent right by evading the law or unjustified means in order to acquire unjustified interest or restrain the justified exploitation of others.
The following can be determined as malicious:
- a patent application has been filed for the technical standards, such as the national or industry standard, already existing before the date of filing and acquisition of the patent right.
- a patent application has been filed for a product obviously widely manufactured or used in a certain area and acquired the patent right.
In addition, an injunction may not be allowed by the people's court if granting the injunction harms the public interest, but the infringer should pay reasonable royalty fees.
The right to seek an injunction may also be restricted if the patent relates to a standard essential patent and the patentee refuses to grant a licence under a fair, reasonable and non-discriminatory terms (FRAND) principle as they had promised to do.
3.1 Necessary Parties to an Action for Infringement
The qualified party to an action for infringement should be the patentee or the interested person. The interested person could be a licensee or the successor of the patentee. Depending on the type of the licence agreement, the licensee may take the action of infringement independently or jointly with the patentee or based on the special authorisation of the patentee:
- a sole licensee has the right to take an action for infringement in his or her own name without the involvement of the patentee. A sole licence means only the licensee has the right to implement the patent; even the patentee may not implement the patent.
. an exclusive licensee may take the action of infringement
authorisation of the patentee:
- a sole licensee has the right to take an action for infringement in his or her own name without the involvement of the patentee. A sole licence means only the licensee has the right to implement the patent; even the patentee may not implement the patent.
- an exclusive licensee may take the action of infringement together with the patentee or take the action of infringement alone if the patentee abandons their right to take the action. The exclusive licensee means both the licensee and the patentee have the right to implement the patent.
- a non-exclusive licensee may take the action of infringement with the special authorisation of the patentee.
3.2 Direct and Indirect Infringement
Direct infringement and indirect infringement are different in this patent practice. Direct infringement is established if all the features in a patent claim (product or method) are found in the alleged infringing product or method and are implemented by a single party. The single party is the direct infringer. Currently, indirect infringement is officially referred to as joint infringement in China. Typical indirect infringements include:
- anyone who, despite being aware that the product in question is the material, equipment, component, ietc particularly adapted for use in exploiting a patent, provides that product to another person who conducts the act of infringement on the patent right for production and business purposes;
- anyone who, despite being aware that the product or process in question is a patented product or patented process, actively induces others to conduct the act of infringement on the patent right for production and business purposes;
- the parties produce the components of an infringing product and the parties have division and co-operation of labour, etc. For direct infringement, the right holder may take action of infringement against the direct infringer to seek both an interim injunction and a permanent injunction and damages. For indirect infringement, the right holder should bring an action of infringement against all the infringers who constitute the joint infringement, not only against some of the joint infringers. Each of the joint infringers should be liable for
paying damages and joint liabilities.
3.3 Scope of Protection for an Intellectual Property Right
According to Article 59 of the Chinese Patent Law, the scope of protection of the patent right for an invention or utility model will be determined by the terms of the claims. The description and the appended drawings may be used to interpret the claims. The scope of protection of the patent right for design will be determined by the product incorporating the patented design as shown in the drawings or photographs.
In determining the scope of protection of a claim, the court may apply all elements of principle: PHE principle, doctrine of equivalent principle, donation principle etc.
3.4 Defences Against Infringement
In a patent infringement proceeding, there are usually the following defences against infringement:
- non-infringement defence;
- prior-use right defence;
- prior art defence;
- patent exhaustion defence;
- Bolar exception defence;
- non-production and business purpose defence;
- contract defence.
3.5 Role of Experts
Experts may act as witnesses to verify certain facts. The experts may also provide assistance to the parties. The roles of the experts in these two situations are different. When an expert acts as a witness to certain facts, they are independent so that their opinion can be treated as a piece of evidence. The expert assistant to a party must give the opinion based on their understanding and knowledge of certain technical issues. However, the expert assistant will usually hold the same opinion as the party they represent.
3.6 Procedure for Construing the Terms of the Patent's Claims
In China, there is no separate procedure for the construing of the terms of the patent's claims.
Guidance on the Regulations of Reducing Patent Fees in China
By Qi Liu (Ms.), Yan Wang (Ms.), Xiaowei Zhang (Ms.)
The Ministry of Finance and the National Development and Reform Commission (NDRC) released new Regulations on Reducing Patent Fees for Qualified Applicants. The new Regulations on Reducing Patent Fees came into force on September 1st, 2016. As of the effective date, individuals or entities who meet the eligibility criteria prescribed by the Regulations could enjoy an 85% or 70% reduction of fees for processing a patent application, which is limited to certain items of official fees.
With the new regulations coming into force, foreigners may now enjoy reduction of patent fees upon meeting certain criteria. The following introduction will probe into the details of the Regulations.
1. Who can Request?
- Individuals, whose average monthly salary is no more than RMB3, 500 (about USD522), or whose personal annual income is no more than RMB42, 000 (about USD6,269) in the last calendar year (i.e. a year starting from Jan.1 and ending on Dec.31 );
- Enterprises, whose taxable annual income is no more than RMB300,000 (about USD44,776) in the last calendar year;
- Public Institutions, Social Groups and Non-profit Public Research Organizations.
If the Chinese patent or patent application is co-owned by two or more co-applicants, all the applicants shall meet the above-mentioned requirements respectively.
(The above equivalent US fees are for your reference and will be subject to the floating exchange rate)
2. Which fees are reduced?
The reduction of patent fees is directed to so called official fees set forth by the SIPO, and in particular:
- Filing fees (excluding publication fee and any surcharge);
- Fee for initiating substantive examination (applied
solely to patent applications for invention);
- Fee for re-examination;
- Annuities (for six consecutive years since the grant of a Chinese patent, including the one due in the registration fees).
For Chinese nationalization entry of a PCT application, the applicant(s) could only enjoy the reduction on fee items c) and d).
3. How much is reduced?
If a Chinese patent/application is owned by one single owner, the sole owner can receive 85% reduction of related official fees prescribed in the above item (2). If a Chinese patent/application is co-owned by two or more owners, the co-owners can receive 70% reduction of related official fees.
4. How to Request?
Normally, two steps are to be taken for the applicant to request the Patent Fees Reduction: 1) Recording the qualification for the Fee Reduction, and 2) filing the Fee Reduction Request for an individual case. Please kindly find the detailed information regarding the two procedures as follows:
4.1. Recordal of qualification
Firstly, as of Sep.1st , 2016, all individuals and entities which are qualified for official fees reduction, shall record their qualification through the SIPO's online service system with submission of necessary documents. Once the Recordal is permitted upon examination, the SIPO will issue a recordal number.
The recordal, upon effect, could remain effective for a calendar year, within which the applicant/patentee could file a request for the official fees reduction for all its target patents/applications filed in or before this year case by case by quoting the recordal number. To renew any recordal after this calendar year, the request shall be filed again, with the same required documents.
As for foreign individuals and entities, Chinese agents shall be designated to make such recordal. In light of current practice, we would like to list the necessary documents for foreign individuals and entities to make this recordal as follows:
- Individuals: notarized copies of his or her ID, e.g. passport, and the taxable income certificate from the local Tax Department, showing that the person's annual income in the last calendar year is under the amount equivalent to RMB42,000 (USD6,269). If there is no taxable income certificate, the attestation made by the local public notary with the testimony on this person's annual income is required.
- Enterprises: notarized copies of Business Certificate and the Annual Taxable Income Certification from the local Tax Department, showing that the entity's taxable income in the last calendar year is under the amount equivalent to RMB300,000 (USD44,776).
- Public Institutions, Social Groups and Non-profit Public Research Organizations: notarized copy of the Certificate attesting its legal status.
- The originally executed Powers of Attorney by the applicant(s).
Please note that, all the notarized documents mentioned above should be further legalized by the local Chinese embassy or consulate. And the full Chinese translation thereof is required.
4.2 Request on a case-by-case basis
Within the calendar year, in which the recordal of the official fees Reduction remains effective, the request for official fees reduction for a specific case could be made either:
- Together with filing the new Chinese patent application for all the official fees mentioned in the above item (2); or,
- before two and half months from the payment deadlines of any of the official fees mentioned in the above item (2). (b), (c) and (d) for pending or granted cases. But the official fees already paid before the request for reduction of official fees could not be reduced, neither the official fees due within two and half months from the request.
Once the reduction request on a case-by-case basis is approved, no further request is needed to effect the official fee reduction for this case in its remaining lifespan.
However, an ownership change may affect the reduction of the subsequent official fees. For instance, as to a case with ownership change due to the merger or assignment after filing, the surviving entity or the assignee, even having obtained a recordal number for reduction, after the completion of the recordal of the ownership change at the SIPO, shall file the request for Official Fees Reduction for the same Chinese case again. Otherwise, the new owner(s) could not enjoy the reduction of the subsequent official fees cited in above item (2). b), c) and d), if any.
If you would like to know more about the Official Fee Reduction Regulations, or have any questions thereon, please never hesitate to contact us. The above introduction is for your information only and shall not be interpreted as formal attorney's advice.
Practical tips for managing annuities in China
By Lirong Dai (Ms.)
How to handle annuities with security and efficiency is always an important and complicated issue for patentees. All patentees are looking for a reliable, precise and efficient way to handle the large portfolio of their patents. As we know, many giant international companies always prefer to have an annuity vendor to monitor and manage its worldwide patent rights, which may save them time and hassle of administration.
However, as the Local Law varies from each other extensively, a competent associate as local agent of the annuity vendor is also very important for the patentee. For the sake of security, the applicant shall designate a reliable local agent in specific important countries while working with the annuity vendor.
The following practical tips shall be given priority when managing the annuities in China.
Duration of patent right
Duration of patent right for inventions is 20 years counting from the actual filing date (not priority date). Duration of patent right for a utility model and for a design is 10 years counting from the actual filing date (not priority date).
However, this duration is calculated differently from other terms under Chinese Patent Law. According to the Guidelines for Patent Examination, the filing date is counted into the duration of the patent right. Therefore, the duration of the patent right will be counted until one day ahead of the anniversary of the filing date. For example: with the filing date of Sep. 6, 2000 for an invention patent, the duration of the patent right will be from Sep. 6, 2000 to Sep. 5, 2020, and the date of the termination of the patent right for invention is Sep. 6, 2020 (the date can NOT be postponed in case of statutory holidays.).
For royalty counted on days in any agreement regarding patent acquisition or granting license, each party shall pay close attention to the specific terms of patent rights in China.
Calculation of the annuity fee due with payment of registration fee for the grant of the patent
The SIPO will indicate the annuity fee and year in the
Notification to Go through Formalities of Registration (issued out concurrently with the Notice of Allowance). In practice, the SIPO determines the initial annuity to be paid together with the certificate fee in the said notification, by making use of a supposed grant date, i.e. 5 months from the issuance date of the notification. Therefore, the next annuity due date will be occasionally in the same calendar year as that of granting.
For instance, for an application with the filing date of December 1, 2010, the SIPO might issue the Notice of Allowance on April 1, 2014, requesting payment of the 4th annuity together with certificate fee, as the SIPO practically supposed the grant date as Sep. 1, 2014 (April 1, 2014 + 5 months). Then the next annuity of the 5th year should be due on December 1, 2014, in the same calendar year as that of granting.
Amended filing date by incorporation by reference upon PCT Chinese national phase entry
According to the provisions of the PCT regulations, where some elements or parts are missing when the applicant files the international application, they may be incorporated by reference of the corresponding parts in the earlier application, and the original filing date shall be retained.
Nevertheless, China, as the Selected Office, makes reservation to the above provisions, and only accepts such provisions as the Receiving Office. That is, when the international application enters the Chinese national phase, the examiner shall re-determine the filing date in China based on the records in the Notification on Decision of Confirmation of Incorporation by Reference of Element or Part (form PCT/ RO/114) delivered by the International Bureau and then issue the Notification of Re-determination of the Filing Date. Then the annual year should be counted from the amended filing date which is then different from that of many other countries. It certainly may cause substantial risk or difficulty in monitoring the annuity deadlines, to which the patentees should pay closer attention.
Termination of the patent right for utility model in favor of the patent for invention filed on the same day
According to Chinese Patent Law, for any identical inventioncreation, only one patent right shall be granted. The only exception to the provision is that, where an applicant files, on the same day, applications for both utility model (UM) patent and invention patent relating to the identical inventioncreation, and the applicant then declares to abandon the UM patent which has already been granted but not yet terminated, the patent for invention may still be granted without contravening double-patenting regulations.
In practice, for avoidance of double-patenting deficiency, as the first step the examiner shall request the applicant to abandon the granted UM patent during the prosecution of invention patent application. In order to allow the invention application to be granted, the applicant shall then submit the request for abandoning UM patent. However, the date of submitting the request for abandoning UM patent right is not the official date of termination thereof. Instead, the official termination date of the UM patent right should be the same date with the issuance date of patent right for invention.
Therefore the applicant shall keep the UM patent right in good situation of being valid till the invention patent is issued, in order to satisfy the Laws' prerequisite that the UM patent has not yet terminated. To sum up, the patentee shall attend to the due payment of annuities for the utility model patent until the date of announcement of grant of invention patent right.
Even though the patent right for invention is unreasonably granted for the neglect of the Examiner, and the applicant does not attend to the due payment of annuity fee for utility model patent by the issuance date of patent right for invention, the patent right for invention would run the substantial risk of being invalided by any third party through a potential invalidation proceeding, based on the incorrect termination of the utility model patent before the announcement date of invention patent right.
Double Notifications the patentee may receive
Where the patentee fails to pay the annual fee in time (not including the annual fee of the year in which the patent was granted), or where the fee has not been paid in full in time, the SIPO shall issue a Non-Payment Notification to the patentee. Please note that SIPO would not send out any reminder for this purpose in advance of the due date. The patentee may then pay the fee or make up the insufficiency
within six months from the expiration of the due date, but with the possible surcharge already incurred.
Notification of Termination of Patent Right
Where, at the expiration of 6-month surcharge period, the patentee still fails to pay or pay in full the annual fee or even the surcharge, the patentee would receive a Notification of Termination of Patent Right. The patentee may then file a request for restoration together with the full annuity fee, surcharge and restoration fee. It is important to keep in the top of mind that this is the last chance for the patentee to revive its patent right. The revived right is retroactive. That is to say, there will be no defect or gap to the continuity or integrity of the patent right upon restoration.
Based on the above, in case that the patentee decides to allow any patent to go abandoned by non-payment of the next annuity, the patentee would still receive the above double notifications, but could simply disregard the same. However, if the patentee fails to attend to the annuity payment unintentionally, with the issuance of the above two notifications it has double chances correspondingly to make up for the neglect.
After the return of the sovereignty of Hong Kong in 1997 and Macau in 1999, many Chinese agents have extended their annuity services to HK SAR and MC SAR. On the other side, domestic clients can also monitor their worldwide patent rights through Chinese agents' collaboration with professional associates worldwide.
With all the above interpretation taken into consideration, it is clear that the annuity practice in China is not just counting years and amounts, but much more. A sophisticated local agent, such as CCPIT Patent & Trademark Law Office which has an experience of over 30 years in the annuity management in China, is necessary for delicate guidance under various situations to safeguard your valuable assets.
Judgment of distinctiveness of trademarks combining 3D marks and other elements
By Xiaomeng Dong (Ms.)
Trademarks combining 3D marks and other elements are different from pure 3D trademarks with "3D appearances constituted by commodity packaging or by commodities," and trademarks of ordinary types like word trademarks and device trademarks. This paper will analyze three questions relating to the distinctiveness of trademarks combining 3D marks and other elements.
I. Three questions arising from trademark examples in China
(i) Examples of trademarks combining 3D marks and other elements that have been approved for registration
The following trademarks are made up of 3D marks and
other words on commodity packaging. All of them have been allowed for protection by the Trademark Office.
(ii) Examples of trademarks combining 3D marks and other elements that were refused registration
The following trademarks are also made up of 3D marks and other words/devices of commodity packaging, but were refused registration in China on the ground that they lack overall distinctiveness.
Trademark No.: G681389 Designated Goods: Beer of class 32
Trademark No.: G769520 Designated Goods: Soda drinks of class 32
Trademark No.: 3276252 Designated Services: Restaurants, etc. of class 43
Trademark No.: 3240987 Designated Goods: Wine (beverage), etc. of class 33
The trademark is made up of letters CHIVAS REGAL, a lion device and the shape of a bottle Trademark No.: 3276252 Designated Services: Wine, etc. of class 33 Words "CHIVAS REGAL" have been registered for used on the goods of the same class.
The trademark is made up of a flower device and the shape of a bottle Trademark No.: 6318971 Designated Goods: Liquor, etc. of class 33
registered for use on the goods of the
(iii) Three questions concerning "judgment of distinctiveness of trademarks combining 3D marks and other elements" thus arising from the above examples
Judgment of distinctiveness of trademarks combining 3D marks and other elements mainly involves the following three questions:
Question 1: What type of trademark do trademarks combining 3D marks and other elements belong to?
Question 2: How should the distinctiveness of the trademarks combining 3D marks and other elements be determined?
Question 3: How should the scope of protection of the trademarks combining 3D marks and other elements after trademark registration be determined?
II. Analyses of the three questions
(i) Question 1: What type of trademark do trademarks combining 3D marks and other elements belong to?
1. According to the Chinese law, trademarks combining 3D marks and other elements are "combined trademarks."
According to Article 12 of the Trademark Law, it has been enshrined in the law that a "threedimensional sign" is a "shape."
According to Article 8 of the Trademark Law, it has been enshrined in the law that threedimensional marks, words and devices can be used as trademark elements. According to the law, each and every element can be combined to make combined trademarks.
Take the six trademarks listed above for example Trademarks combining 3D marks and other elements like the above six trademarks are "combined trademarks" provided in Article 8 of the Trademark Law.
(ii) Question 2: How should the distinctiveness of the trademarks combining 3D marks and other elements be determined?
1. According to the Chinese law, the distinctiveness of trademarks combining 3D marks and other elements should be judged on the whole, and four factors may be taken into consideration.
Article 11 of the Trademark Law provides, "The following marks shall not be registered as trademarks:...(2) marks that merely indicate the quality, principal raw materials, function, use, weight, quantity or other features of the goods..." According to such provision, only trademarks that "merely" indicate the function of goods do not have distinctiveness.
For trademarks combining 3D marks and other elements, the 3D marks are always the general shape of commodity packaging, and are unlikely to be identified by the consumers as trademarks. Therefore, the inherent
distinctiveness of 3D marks is naturally weak. But if other elements in a combined trademark are highly distinctive, such combined trademark may not be a trademark that "merely" indicates the function of goods, as provided in Article 11 of the Trademark Law.
Now how should the distinctiveness of trademarks combining 3D marks and other elements be determined?
Article 5 of Opinions of the Supreme People's Court on Several Issues Relating to Trials of Administrative Cases Concerning the Grant and Confirmation of Trademark Rights (hereinafter referred to as "the Opinions") provides, "While trying administrative cases concerning the grant and confirmation of trademark rights, the people's court shall examine and judge whether a trademark has distinctive features on the whole according to the general knowledge of the public concerned of the designated goods of the trademark in dispute. Where the descriptive elements in the marks do not affect the overall distinctive features of the trademarks, or the descriptive signs are demonstrated in such a unique way that enables the public concerned to distinguish the sources of goods with them, such marks shall be identified as having distinctive features."
According to Article 5 of the Opinions, the distinctiveness of trademarks shall be judged on the whole. The combinations of 3D marks and other elements belong to combined trademarks set in the Trademark Law, and are a type of trademarks. The distinctiveness of combined trademarks shall be judged on the whole. It indicates that (1) a trademark can't be directly identified as being not distinctive just because the 3D mark in it is not distinctive; (2) the elements of a combined trademark shall be analyzed separately so as to judge whether such combined trademark is distinctive on the whole. Firstly, it is the 3D mark part, which is not likely to be identified by the consumers as a trademark, if so it lacks distinctiveness naturally. However, as a part of a combined trademark, it is inappropriate that a 3D mark is not original at all--because if it is too ordinary (for example, if it is a product
appearance or package that has no characteristics at all, nor any originality, or sense of design in the industry), the possibility of its being protected as a part of a trademark is slim. Under such circumstance, the protection of a combined trademark can be replaced by the protection of word/device and other significant elements as twodimensional trademarks. Given that, as a part of combined trademarks, 3D marks shall at least be substantially original in the industry (since it is the protection of combined trademarks instead of separate protection of 3D marks, the requirement on the originality of 3D marks here can be low, even minimum originality). Secondly, it is the part of other word/device elements. Generally, the minimum originality of a 3D mark can't make a combined trademark sufficiently distinctive to get registered. The distinctiveness of other word/device elements has to be taken into full consideration. If other word/device elements are distinctive, hold prominent positions in the combined trademark and can easily be identified by the consumers as trademarks, such combined trademark will thus become distinctive. Therefore, a combined trademark is made up of "distinctive word/device"
and "3D mark of minimum originality." For registered combined trademarks, the main part to be protected shall be "distinctive word/device." (Generally, "3D marks of minimum originality" are so less distinctive that they amount to relinquishing the exclusive right to trademark use.)
Based on the provisions of the Trademark Law of China and the Opinions, the following four factors may be taken into consideration to judge the distinctiveness of trademarks combining 3D marks and other elements: (1) whether the 3D marks are distinctive enough to be registered; (2) whether the 3D marks are of minimum originality; (3) whether the other word/device elements are distinctive; (4) if the other word/device elements are distinctive, judge whether the 3D marks are at prominent places in the trademarks and easily identified by the consumers as trademarks.
Considering the above four factors, the overall distinctiveness of a combined trademark may be manifested as the following five circumstances (please see the table).
Circumstance 1: Circumstance 1 is rare in practice.
Circumstance 1: the Circumstance 2: the Circumstance 3: the Circumstance 4: the Circumstance 5: the
trademark is of
trademark is of
trademark is of no trademark is of no trademark is of no
distinctiveness on distinctiveness on distinctiveness on distinctiveness on distinctiveness on
Whether the 3D
marks are distinctive
enough to be
Whether the 3D
marks are of
Whether the other word/device elements are distinctive
Whether the 3D
marks are at
in the trademarks
and easily identified
by the consumers
Circumstance 2: For example, the four registered trademarks mentioned above, namely trademark , ,
and , fall under circumstance 2. Circumstances 3 and 4: For example, in trademark No.
mentioned above, the bottle, namely the
3D mark, has a certain sense of design, and is of minimum
originality. Although it contains distinctive words CHIVAS
REGAL and a device of lion, they don't hold prominent
places in the trademark and are not likely to be identified by
the consumers, the trademark is not distinctive on the whole.
For another example, in trademark No. 6318971
listed above, the 3D mark has a certain sense of design, and
is of minimum orignality. Although the combined trademark
contains registered device trademark
and the device is
at a prominent place, such device is demonstrated more like
a decoration on commodity packaging, and it is unlikely for
the consumers to identify it as a trademark. Therefore, the
trademark on the whole is not distinctive.
Circumstance 5: first, for such combined trademarks, regardless of the way of expression of other elements, the 3D mark is the main part naturally. If the 3D mark does not have any distinctiveness, the combined trademark is unlikely to have overall distinctiveness; second, it is meaningless to protect the combined trademarks by now, and distinctive word/device elements can be protected completely as twodimensional trademarks.
2. Foreign legal provisions, judicial precedents and trademark registration examples
Foreign related practices abroad can be used as a reference for administrative and judicial examination of trademarks in China.
(1) Trademark cases in the UK
Case of trademark opposition against "YAKULT & beverage packaging":
Japanese company Kabushiki Kaisha Yakult Honsha applied for registering trademark "YAKULT & beverage packaging" (see below for trademark device) in the UK, and
the trademark was designated to be used on "yogurt" of class 29, "tea" of class 30 and "soft drinks" of class 32. Malaysian company MALAYSIA DAIRY INDUSTRIES PTE LIMITED objected such trademark. One of the grounds it held was that the trademark was not distinctive and violated the provision of Article 3 (1) of the UK trademark law, that is, "trademarks which are devoid of any distinctive character shall not be registered."
After hearing the case, the Intellectual Property Office of the UK identified: The opposed trademark was a combined trademark made up of two parts--word YAKULT and the 3D mark of the shape of container, so the distinctiveness of such trademark shall be judged on the whole. Comprehensive and correct consideration of it must be made. An overall analysis of it should be made according to the knowledge of the public concerned of the trademark and commodity nature. Word YAKULT in the trademark was highly and inherently distinctive. Moreover, YAKULT was highly distinctive and identifiable in the combined trademark. YAKULT was a highly distinctive and eye-catching element in the combined trademark...the shape of container in such combined trademark was inherently distinctive. However, considering the trademark on the whole, highly distinctive word YAKULT was enough to cause the consumers concerned (general public) to think that the trademark on the whole can distinguish sources of goods. Finally, the Intellectual Property Office of the UK held that the trademark had overall distinctiveness, so it ruled that the opposition was untenable, and approved the registration of the opposed trademark.
In the case of opposition against trademark "YAKULT & beverage packaging," although the packing bottle of the product was not distinctive in the registration sense, it had a certain sense of design and minimum originality. Besides, the trademark contained distinctive word YAKULT, and such word occupied a prominent position in the combined trademark. Therefore, the trademark was identified as distinctive on the whole.
(2) Related provisions and trademark examples in the US
Trademark Manual of Examining Procedure (TMEP):
The U.S. TMEP provides: ...the examining attorney must refuse registration on the ground that the proposed mark is not inherently distinctive unless the applicant claims that the mark has acquired distinctiveness. A refusal on the ground that the entire proposed mark is not inherently distinctive generally is not appropriate if the mark includes additional distinctive matter beyond just the product design, such as words and/or images. In such situations, the applicant may be required to disclaim or claim acquired distinctiveness in part as to any non-inherently distinctive elements.
Trademark examples in the US
U.S. combined trademark No. 78656060 is made up of words "NEW! SCOTTS NATURE'S CARE ALL PURPOSE PLANT FOOD" and product packaging (see below for trademark device), and the United States Patent and Trademark Office describes the trademark as "product design, plus word, letters of alphabet and/or numbers." The trademark, designated to be used on "plant food," was registered successfully in June 2007.
Although the 3D mark in such combined trademark, that is, the outer product package, lacks distinctiveness in the sense of trademark registration, it is red, with a handle and a black cover, so it is of minimum originality. Words "NATURE'S CARE" in the trademark are distinctive in the registration sense, and had been registered by the same owner in the United
States. Besides, words "NATURE'S CARE" hold a prominent position in the combined trademark, so it is likely to be identified by the consumers as a trademark. Because of the product package of minimum originality and words that are distinctive in the registration sense, the trademark is distinctive on the whole, so the registration of it was approved by the United States Patent and Trademark Office.
In line with the above, according to the Chinese law and by referring to foreign practices, it is legal and reasonable to judge the distinctiveness of trademarks combining 3D marks and other elements on the whole while taking into consideration four factors.
(iii) Question 3: How should the scope of protection of the
trademarks combining 3D marks and other elements after trademark registration be determined?
1. According to the Chinese law, the scope of protection of the trademarks combining 3D marks and other elements shall focus on the distinctive parts of such trademarks
(1) The scope of protection of trademarks combining 3D marks and other elements shall focus on their distinctive parts.
Article 59 of the Trademark Law provides, "An exclusive rights holder of a registered trademark shall have no right to prohibit other people from using in normal use the common name, logo or model contained in the relevant registered trademark or the quality, principal raw materials, functions, uses, weight, quantity, geographic name or other features that are explicitly expressed in the registered trademark. Where three-dimensional registered trademarks are by the product's own nature essentially the shape of the product, and provide the goods bearing the mark with a specific value, a trademark holder shall have no right to prohibit other parties from reasonably using a similar shape to realize a similar special or technical effect." Given that the 3D marks in combined trademarks may have minimum originality only, and are not distinctive enough to get registered, no one shall have the right to prohibit other people from reasonably using the parts of minimum originality of such trademarks.
According to the above legal provisions, it is inadvisable to give even protection to all elements of registered trademarks combining 3D marks and other elements, but protection should be mainly given to their distinctive parts. It is common in registered combined trademarks that the 3D marks in them are product packaging or product design, and are of minimum originality and that their distinctive parts are word/ device elements. The protection of trademarks combining 3D marks and other elements shall focus on their distinctive parts, that is, the distinctive word/device elements in them. After registration, combined trademarks do not prohibit other parties from reasonably using the 3D marks that are of minimum originality and are not yet distinctive enough to get registered.
(2) The application of "the scope of protection of trademarks combining 3D marks and other elements shall focus on their distinctive parts" in cases concerning administrative grant and confirmation of trademark rights and civil infringement
Specifically, in cases concerning administrative grant and confirmation of trademark rights and civil infringement cases, how should "the scope of protection of trademarks combining 3D marks and other elements shall focus on their distinctive parts" be applied?
In cases concerning administrative grant and confirmation of trademark rights, to prevent later registration of similar trademarks, the 3D mark parts (namely "the shape") of the later combined trademarks may be similar to those (namely "the shape") of the prior combined trademarks, but their distinctive word parts must not be similar. That is to say, in cases concerning administrative grant and confirmation of trademark rights, the principle of judgment of general combined trademarks may be followed to judge similar trademarks.
In civil infringement cases, to prevent infringement act of similar trademarks, the principle of judging similar trademarks may also refer to the principle of judging general combined trademarks. In 3D combined trademarks, we can suppose that their shape part is not distinctive, so if a trademark accused to be infringing is the same as or similar to another trademark only in the part that is not distinctive (the shape part), but its distinctive part is not similar to the latter, the two trademarks shall be identified as dissimilar in general. But if their distinctive parts are similar, but the shapes in them are totally different, they remain dissimilar following the principle of overall judgment. That is, for 3D combined trademarks in civil infringement cases, only when the distinctive parts and the shape parts (for 3D combined trademarks, visually, the outer shape always occupies more space) are similar do they constitute overall similarity.
The two judgment principles mentioned above on the one hand demonstrate that, in cases concerning administrative grant and confirmation of trademark rights, prior registered trademarks can be given greater scope of protection, that is, they can prevent later registration of similar trademarks to an even greater extent and in bigger scope; on the other, they demonstrate that, in civil infringement cases involving trademarks, relatively strict restriction of the scope of trademark protection shall be carried out in order to prevent the right owners from improperly occupying public resources so as to promote fair market competitions.
2. Referential trademark registration examples and judicial
(1) Related trademark cases in the UK
In the above case of trademark opposition against "YAKULT & beverage packaging," the opponent claimed that the opposed trademark lacked distinctiveness, and was similar to its prior registered trademark. Below is a comparison of both trademarks:
Although the 3D marks (product packaging) in the above two
The Opposed trademark
trademarks are relatively similar, the words in them are significantly different. The Intellectual Property Office of the UK finally identified them as dissimilar on the whole and unlikely to cause confusion in the consumers. Of the grounds held by the Intellectual Property Office of the UK, one was that the trademark opponent also clearly admitted "VITAGEN is the distinctive identifying element of the citation." As can be seen, the scope of protection of such trademark was mainly word "VITAGEN," that is, the distinctive word part of the combined trademark.
(2) Related provisions and trademark examples in the United States
Trademark Manual of Examining Procedure (TMEP):
As aforesaid, for trademarks combining 3D marks and other elements, the U.S. TMEP clearly provides that the applicants may be required to disclaim or claim acquired distinctiveness in part as to any non-inherently distinctive elements. That means, in trademark examination practices, the U.S. mainly protects the distinctive elements of combined trademarks.
Trademark examples in the US
Take combined trademark No. 79050677 (see below for trademark device) in the U.S. for example, the United States Patents & Trademarks Office clearly indicates: the trademark right owner disclaims the exclusive right to use the packing box design.
The United States Patents & Trademarks Office requires the trademark owner to clearly disclaim the exclusive right to use the packing box design, indicating that the protection of such combined trademark mainly focuses on distinctive words/ images.
In line with the above, according to the Chinese law and by referring to foreign practices, it is legal and reasonable that the scope of protection of trademarks combining 3D marks and other elements focuses on their distinctive parts.
A flexible approach to law making
By Xiaojun Guo
Since the Chinese intellectual property laws provide only the framework of the country's IP systems, the Supreme Court has issued many judicial interpretations which are essentially lower level laws to fill the gaps in legislation left by the National People's Congress. The courts have great discretion in "residual law making" in light of new phenomena brought by the development of technologies such as the internet and 3D printing.
In the Weixin case, ruled on by the Beijing High Court on April 20, 2016, Trunkbow Asia Pacific (Shandong) Technology applied to register the `Weixin' (Wechat in English) trademark covering computer software and communication services, more than two months before the Weixin instant messaging services was launched by Tencent. The application was rejected by the China Trademark Office for having "unhealthy influences" and the rejection was maintained by the Trademark Review and Adjudication Board (TRAB).
The Beijing IP Court upheld the TRAB's decision and ruled that, in spite of the first-to-file registration system, the public interest and stable market order shall prevail. In this case, the so called public interest and stable market order essentially refer to the huge number of active users of the instant messaging services identified by the `Weixin' mark.
By the end of the third quarter of 2015, this figure had reached 650 million per month globally. This decision triggered controversy about the function of the first-to-file rule and the meaning of "unhealthy influences" in the Trademark Law.
On appeal, the Beijing High Court upheld the Beijing IP Court's and the TRAB's decisions, but on different grounds. The High Court found that the `Weixin' trademark has no inherent distinctiveness. This was because the Chinese character for "Wei" means "micro" or "little" when being used for communication services in combination with the Chinese character for "Xin", which generally means communication; and because the relevant public is
likely to regard it as a kind of communication method which is shorter and more convenient than email and short messaging. `Weixin' is therefore descriptive and not likely to identify the source of services.
`Weixin' has acquired secondary meaning by intensive use through the instant messaging services provided by Tencent and is now associated with the latter. The judgment essentially hints that Tencent owns the `Weixin' trademark and can continue to use it for its instant messaging services.
Kung Fu Panda
In another case, DreamWorks Studio v the TRAB, the TRAB rejected the opposition request against a trademark application for `Kung Fu Panda' based on the asserted merchandising rights to a movie's name and a movie character's name, Kung Fu Panda. The TRAB found that the asserted merchandising rights are not statutory rights or interests and that the subject and boundaries of said rights are indefinite. The Beijing First Intermediate Court upheld the TRAB's decision on almost the same grounds.
"A court, when it adjudicates a case, considers not only the legal effects but also the social impact including policy considerations."
On appeal, the Beijing High Court held that when a movie's, or character's, name is so well-known that it is not restricted
business value and opportunities are also attributable to the intensive investment in labour and capital. Therefore, `Kung Fu Panda' shall be protected as merchandising rights. The court therefore vacated the first instance's and TRAB's decisions and remanded the case to the TRAB for reexamination.
In another case, Philips v ShangHai POVOS Electric Works et al, the Shenzhen Intermediate Court found that the defendants manufactured, sold or offered to sell the accused shaving products on a huge scale and in many models with a turnover of more than RMB 19 million ($2.8 million). Meanwhile, the defendants refused to submit evidence such as accounting books, meaning that accurate damages could not be found. In spite of this, the court granted damages of RMB 2 million, which exceeded the statutory compensation stipulated in the Patent Law.
The Patent Law provides four ways to determine damages: 1) actual losses suffered by the rights holder; 2) profits the infringer has earned; 3) appropriate multiple of the exploitation fees of the patent; and 4) statutory compensation with an upper limit of RMB 1 million.
In response to criticism that damages are too low for patent infringement cases, some courts have introduced so called discretionary compensation. It means that a court can determine at its discretion damages on a fair and equitable basis even on evidence which doesn't support an accurate calculation of damages.
A court, when it adjudicates a case, considers not only the legal effects but also the social impact including policy considerations. Since the courts and central government are promoting stronger protection of IP rights, a right holder may expect to achieve something even if the laws are silent in that respect. Of course, this philosophy, as we may read from the cases, might lead to a somewhat results-oriented trial of IP cases.
This publication is designed to provide our friends and clients with up-to-date information regarding intellectual property in China. It is not intended to provide legal advice. We welcome your suggestions and comments.