Latest Developments of IP in China Nov.2016
Latest Legislation Tendency of IP in China ....................................................... 2
1. Programmatic Document Issued by the State Council to Complete Property Rights Protection System, Specifying the Newest Direction to Protect Property Rights.........................................................................................3
Latest Developments of IP in China............................................................... 4
1. "Ma Ke Si Ma Zuo (Chinese Character) MAXIMAZO" Refused to Register as Trademark by CTMO......4 2. Highest Infringing Compensation in the History of Beijing IP Court----Trademark Infringing Case of Mei Chao ...............................................................................................................................................................................................5 3. Dispute exists on "Wei Xin (Chinese Character)" Trademark in Class 36, Business with Payment via WeChat Suffer. ....................................................................................................................................................................................6 4. Double 11: Over 100 billion in Sales, But Counterfeit Still Severe..........................................................................7 5. Old Brand with New Problem: Hard Way to Protect Trademark ............................................................................8 6Serious Case of Selling Fake "Adidas" and "Nike" Products was Cracked by Wu............................................9
HFG IP GOSSIP in China 201610
Important Notice issued by Trademark Review and Adjudication Board: Tips on Mail Recipient of Material of Review Application
Recently a vital notice was issued by Trademark Review and Adjudication Board, further regulating the materials of review delivered by trademark applicant or his agency in detailed. According this document, applicant or the agency who submit materials for review application shall deliver to: Recipient: the State Administration for Industry and Commerce, Trademark Review and Adjudication Board ; Address: Receiving Section, Trademark Review and Adjudication Board, China Trademark Building, No.1, ChaMaNan Street, XiCheng District, Beijing; Zipcode:100055; Tel:010-63219181/68050313.
Trademark Review and Adjudication Board further points out that if the recipient is a specific official of Trademark Review and Adjudication Board, such delivery will not be regarded as submitting materials to Trademark Review and Adjudication Board. Any legal responsibilities of delay to review caused by such situation will not be taken by Trademark Review and Adjudication Board.
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Latest Legislation Tendency of IP in China
1. Programmatic Document Issued by the State Council to Complete Property Rights Protection System, Specifying the Newest Direction to Intellectual Protect Property Rights
On Nov.11, 2017, the State Council issued Opinions of CPC Central Committee and State Council on Completing Property Rights Protection System to Duly Protect Property Rights in Accordance with Law (hereinafter referred to as "the Opinion"). The Opinion locates the protection and realization of intellectual property as the foundation of economic development. The Opinion is a programmatic document of IP protection system.
The Opinion expressively points out the current circumstances that IP protection in China is fairly weak and the infringement case is prone and multiple to happen. The Opinion also directly states the plan to protect IP in China. Brief contents of IP protection in the Opinion are as follows:
1. Make clear 5 principles to protect IP: fair protection, general protection, protection according to law, joint participation, and dissolution on the root and symptom.
2. Increase the punishment against IP infringement: the Opinion expressively points out that the upper limit of statutory compensation to IP infringement shall be raised, explore to establish punitive compensation system against infringement to IP rights as patent, and copyright to apply punitive compensation to willfull infringement of serious nature, infringer shall bear reasonable costs of right owner to stop infringement, so as to raise costs of IP infringement.
3. Establish a working system to collect source information of counterfeit products: The Opinion contains willful infringement of IP into credit record of enterprises and individuals, to further promote information disclosure of administrative penalty against IP infringement cases.
4. Complete the judicial working mechanism of IP cases, work actively at full capacity of IP court, improve the "Three Traditional Procedures Consolidated into One System" mode to consolidate trials of civil, criminal and administrative cases, strengthen the joint between administrative law enforcement of IP and criminal justice, and enhance IP judicial protection.
5. Complete enforcement mechanism of foreign IP, strengthen international cooperation for criminal enforcement, and enhance the intensity of investigation into crimes of foreign IP.
6. Crack down unfair competition severely, and strengthen protection to business reputation of brands.
HFG's Comments
The Opinion is a programmatic document issued by State Council to complete IP protection, which indicate the latest direction to protect IP in China. In the Opinion, what attracts attention mostly is, it is expressively pointed out, at apparent position in the Opinion, that punitive compensation system against IP infringement will be introduced which means punitive compensation will be applied on willful IP infringement with serve situations. Meanwhile, it also further raises the IP infringement costs. Before the opinion issued, in the justice of China, the concept of "punitive compensation" was never introduced. The State Council expressively confirms the punitive compensation again as a programmatic document, which is more than enough to suggest the emphasis of the government on IP protection. It is predictable, in 2017, the infringing costs of infringer in IP cases will be raised further.
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7. Consolidate IP protection and application, strengthen the establishment of mechanism and platform, and accelerate the transfer and transform of IP.
It is further pointed out in the Opinion the relevant government departments and units in various regions are expected, as required by the Opinion, to promptly formulate detailed implementation, to start fundamental, symbolic and core works, and to strengthen coordination and cooperation, to ensure all measures are implemented in deed and work effectively.
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Latest Developments of IP in China
1. Ma Ke Si Ma Zuo (in Chinese Character) MAXIMAZO is a Similar Trademark to "MaxMara" trademark, decided by the CTMO.
Disputed Trademark
v.s.
Cited Trademark
Recently, China Trademark Office decided and made the written decision on the refusal of registration application of Ma Ke Si Ma Zuo (Chinese Character) MAXIMAZO trademark on goods relating to "knitting clothing; clothing; baby full suit; swimming suit; shoe (wearing on foot); hat".
In October, 2016, Hangzhou Ku Ku Jie Trading Co., Ltd. applied to register Ma Ke Si Ma Zuo (Chinese Character) MAXIMAZO trademark (referred as "Disputed Trademark") in Class 25, designated on goods of "clothing; knitting clothing; swimming suit; shoe (wearing on foot); hat; socks; gloves (clothing); scarf; belt; baby full suit". CTMO issued public announcement after the preliminary examination for approval. During the announce period, the opponent Max Mara Fashion Group Ltd. found this trademark and filed the opposition application.
After the examination by the CTMO, part of the designated goods of the Disputed Trademark was regarded as similar goods to the Cite Trademark, "MAXMARA", since their use, function, sales channel and targeted consumers are all identical or similar. Meanwhile, the English part of Disputed Trademark constituted similar trademark of Cited Trademark on the similar letter composition, pronunciation and overall appearance. If Disputed Trademark and Cited Trademark existed and applied on same or similar products, it would easily cause confusion and misunderstanding to the consumers.
Finally, according to relevant laws, the CTMO decided: refuse the
HFG's Comments
Since the third amendment of Trademark Law, the CTMO is always strict on examining trademark opposition cases to ensure the case will be fast decided on the basis of fairness and reasonableness, with the premise to speed up the examination as possible. Therefore, based on incomplete statistics, in the early time of the 3rd Amendment of Trademark Law enforced, the ratio of the cases in favor of the trademark opponent declined compared with that before the new Trademark Law enforced. According to the CTMO decision in favor of the trademark opponent in this case, even though Max Mara is not regarded as well-known trademark, in the process of this opposition, the CTMO still protects it as well-known trademark broadens the protection of the Cited Trademark to some extent and finally refused the most part of designated goods by the applicant. The Decision of this case indicates the in the examine process of trademark opposition cases, the
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registration application of No. 13455327 trademark Ma Ke Si Ma Zuo (Chinese Character) MAXIMAZO on "knitting clothing; clothing; baby full suit; swimming suit; shoe (wearing on foot); hat".
HFG participated in the whole process of the case representing Max Mara Fashion Group Ltd.
CTMO will release the criteria step by step and strengthen the protection to domestic and foreign well-known trademark.
2. Highest Infringing Compensation in the History of Beijing IP Court ---- Trademark Infringing Case of Mei Chao
On Nov.18,2016, Beijing IP Court made the judgment on the case of Mei Chao Group Ltd. suing Beijing Xiu Xin Jie Emerging Building Materials Co., Ltd., that the defendant shall immediately cease applying Qiang Gu (Chinese Character) on concrete interface treating agent products produced and distributed by the defendant and shall pay the plaintiff RMB 10 million as compensation. This is the highest infringing compensation in Trademark infringement cases since the establishment of Beijing IP Court.
Mei Chao is the owner of Qiang Gu (in Chinese Character) trademark, approved to apply the trademark on designated products of "industrial adhesive; industrial glue', etc. Mei Chao use this trademark for business and promotion combined with well-known trademark Mei Chao (in Chinese Character) and Yi Gua Ping (in Chinese Character), which made the Qiang Gu (in Chinese Character) trademark enjoys high level popularity in the market. The defendant prominently use Xiu Jie Qiang Gu (in Chinese Character), Yi Kang Qiang Gu(in Chinese Character), Xing Chao Qiang Gu (in Chinese Character), with no approval by Mei Chao, on the products produced and distributed by the defendant. Therefore, Mei Chao requested the cease of infringement and the elimination of effects, jointly with compensation and reasonable expense on stop infringement which shall be RMB 10 million in total.
During the trial, the defendant claimed that Qiang Gu (in Chinese Character) is conventional generic name on similar products. Further, the defendant claimed that Qiang Gu (in Chinese Character) on the products produced and distributed by them shall not be regarded as use as
HFG's Comments
As stated in the article, this is the trademark infringement case with the highest compensation since the establishment of Beijing IP Court.
The judgment of this case is made on the Article 63, para. 2 of Trademark Law, that "For the purpose of determining the amount of damages, where the account books an information related to the infringement are held by the infringer, and where the right owner has presented as much proof of its claims as is practically possible, a People's Court may order the infringer to submit such account books and information. If the infringer refuses to submit such account books and information, or submit a false version thereof, a People's Court may determine the amount of damages with reference to the right owner's claims and proof." Under the circumstances that the defendant didn't state reasons and refused to provide account books and materials as evidence, the court directly referred to the claims of and evidences provided by right owner for the judgment. The judgment of this case also indicates the general and specific policies made by Beijing IP Court at the beginning of 2016, which is raising the compensation of IP cases and
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trademark. During the hearing, the court ordered the defendant to provide evidence to prove the actual operation conditions. However the defendant refused to provide any books and material related to the company operation.
According to the hearing, the court believes, that based on the evidences provided by both sides, Qiang Gu (in Chinese Character) in national range has not be recognized as concrete interface treating agent products. Therefore, it shall not be defined as a conventional generic name of concrete interface treating agent products. Meanwhile, defendant prominently uses Qiang Gu (in Chinese Character) on apparent place of products, which make such use as trademark usage. Therefore, such acts by defendant have already constituted trademark infringement against Mei Chao.
In this case, the court believes, "Plaintiff has taken the relevant burden of proof duly well, while the defendant refused to provide evidences for the actual sales volume, price and other relevant information. The effects factors of compensation claimed by Mei Chao can match with ascertained facts, so the defendant shall bear the consequences of refusing to provide evidences. Finally, the court made the judgment that the defendant shall compensate the plaintiff with RMN 10 million."
improving trial level to embody the guiding ideology as an international IP court.
At the same time, this judgment also releases a signal to the industry that since now the expenses and costs of IP infringement will become increasingly higher, it will be impossible for infringer to "Get the Market Share by Infringement". This is really good news for majority IP right owners.
3. Dispute on Wei Xin (Chinese Character) Trademark in Class 36, But Businesses with WeChat Payment Suffer.
With the rapid development of the third-party payment platform, WeChat Payment and Alipay become important payment method for Chinese people. Signs of Alipay and WeChat Payment can be seen in many shops. Recently, Shanghai KFC Co., Ltd. was sued by Beijing Zhong Xin Yin Bao Tong Payment Service Co. Ltd., for trademark infringement.
Plaintiff, Beijing Zhong Xin Yin Bao Tong Payment Service Co. Ltd., claimed that an application of Wei Xin (Chinese Character) in Class 36 financial service has been filed by a shareholder company of the plaintiff, Beijing Zhong Xin An Tai Investment and Development Group Co. Ltd., early to July 20, 2011. Until November, 2015, the plaintiff has paid to Beijing Zhong Xin An Tai Investment and Development Group Co., Ltd. trademark license fee over RMB 2.1 million. The plaintiff further claimed that, Wei Xin (Chinese Character) trademark is never authorized by the plaintiff to any other individual, legal entity or any organization to use. Therefore, the
HFG's Comments
Trademark squatting is always a hot issue with close focus in the field of Intellectual Property in China. The 3rd Amendment of Trademark law also lists it as main content to restrain trademark squatting matter.
The New Balance case in 2016 attracted eyes of the public over the whole country, which is the beginning that those trademark squatters brought lawsuits to the court for high compensation. Although the New Balance case ended with settlement, the high compensation in the first trial gives a boost to those trademark squatters, who join the trademark infringement litigation claiming protecting their own trademark rights.
In this case of WeChat Payment, the nature is almost the same with
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plaintiff sued the defendant before Shanghai Yangpu People's Court, claiming immediate cease of using "Wei Xin (Chinese Character)" trademark and relevant payment service, and asked for a compensation of RMB 500,000.
Not only KFC, many other companies, such as Beijing Qu Na Information Technology Co. Ltd., Su Guo Supermarket Co. Ltd., Qingdao Li Jing Hotel Co. Ltd., Hangzhou Watson Personal Store Co. Ltd., Guangzhou Bai Jia Supermarket Co. Ltd., etc., are also sued for unauthorized using Wei Xin (Chinese Character) trademark, with the same plaintiff, Beijing Zhong Xin Yin Bao Tong Payment Service Co., Ltd.
Just after the lawsuit raised by Beijing Zhong Xin Yin Bao Tong Payment Service Co., Ltd., WeChat group of Tecent made a response on this event. In the statement, WeChat group pointed out that: 1) the Wei Xin (Chinese Character) trademark referred to by the plaintiff has been revoked by the CTMO in legal process; 2) if any business entity is sued for trademark infringement as a result of using WeChat payment, WeChat group will provide full support and take all responsibilities.
For the statement by WeChat group, different parties hold different views. Some of them pointed out that it is still too early to say that the disputed Wei Xin (Chinese Character) trademark of the plaintiff has been revoked. It is known, that the current status of this disputed trademark is "In the Review of Revocation of Registration". Also, others pointed out that Tecent is not listed as defendant in this series cases by the plaintiff, which might be a litigation strategy. All parities keep concerning the result of this case.
the above mentioned cases. The Plaintiff sued different defendants in different courts respectively, which, in reasonable doubt, the plaintiff tries to make profits via lawsuits.
In 2016, such cases constantly emerge. It is predictable that in the future, such trademark cases will become sharply increased, which would also give more "responsibilities and liabilities" to the real trademark owners.
It is suggested by HFG that trademark protection shall be considered in a developing view when apply for trademark registration and make trademark protection plan from all sides, which means not only the trademark itself shall be applied to protect the core products, defensive registration shall also be applied at the same time to avoid more costs of time, money and energy by trademark owner against trademark squatting issues.
4. Double 11: Over 100 billion in Sales, But Counterfeit Still Severe
With promotion in recent years, Double 11 is now a feast for electronic commerce (e-commerce). Many e-commerce platforms like Tmall, JD, VIP.COM, etc., launch large-scale promotional activities on Nov.11 and the half month before the date. Numerous consumers choose to buy the products online with promotional price on the date of Nov.11. The final trading volume of Tmall Double 11 Carnival reached a new high record, up to 120.7 billion RMB. However, a series of problems comes one after
HFG's Comments
Online shopping becomes a vital
choice of consumer because of its
convenience and price advantages. At
the same time, since the virtual and
digitization characters of internet,
"nature protection" is provided to
many counterfeit manufactures and
sellers.
Under the circumstance that
online shopping is extremely
developed
nowadays
with
e-commerce platform. As a trading
platform, it provides not only a
platform, itself is more like an active
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another after the shopping carnival. In Shanghai, for instance, from Nov.11 to Nov.20, 221 complaints relating to "Double 11" were accepted by Shanghai Consumer Protection Committee at all levels, which shared 12.7% of all online shopping complaints, in which complaints were more concentrated on false promotion, after sales service, etc.
The first white paper on consumer tendency, 2016 Big Data on Consumer Tendency in Double 11, is issued by 360 Searching Big Data joint with BTV. According to the rank of consumer complaints in the white paper, the ratio of counterfeits is fairly high up to 62%.
Counterfeit keeps as an obstacle to e-commerce development, and various e-commerce platforms severely suffer with this problem. Because of counterfeit, Alibaba was thrown out by the International Anti-Counterfeiting Coalition (IACC), and even complained twice by the American Apparel and Footwear Association (AAFA) and required by AAFA to be blacklisted as notorious market. Alibaba says that they keeps cracking down counterfeits, with over 2000 employees every year against counterfeits in whole process and in full time, while the problem of counterfeiting cannot be eradicated still.
participant of economic activities, who charge sellers for advertising, do business of bid ranking, and promote e-financial products, making enormous profits by retaining funds. Therefore, at the current developing stage of e-commerce, based on general understanding, e-commerce platform is not purely neutral. The platform makes huge profit in participating actively in various economic activities. As a result, the platform shall take more social responsibilities, especially on ensuring cyber security, sweeping network risk, reducing counterfeits, etc.
The current "safe Harbor Principle" should be applied to the e-commerce platform that does not engage into any commercial activities and just provide the service as a neutral platform. However, in reality, there are few neutral e-commerce platforms.
The E-Commerce Law is drafting now. And according to the main trend in legal system, e-commerce platform should be provided with more responsibilities and social liabilities.
5. Old Brand with New Problem: Hard to Protect Trademark
In recent years, some famous old brands keep facing up to the difficulties to protect their trademarks. Old brands like DaoXiangCun, TongRenTang, WangZhiHe, NeiLianSheng, etc., all experienced trademark
HFG's Comments
It is usually a main method for trademark infringer to register other famous brand as its business trade name, then use such business trade name for its promotion, which could easily confuse and mislead the consumers to believe that there is some link between this company and the owner of the famous brand. The above mentioned key infringement is also very difficult to protect the
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infringement. Recently, after 3 years of trademark protection, the Supreme Court made the re-trial judgment on the trademark infringement case of Beijing QingFeng Steamed Dumpling Shop v. Shandong Qing Feng Restaurant Management Co. Ltd., that Shandong Qing Feng Restaurant Management Co. Ltd. shall immediately cease the use of Qing Feng (Chinese Character) mark and compensate Beijing QingFeng Steamed Dumpling Shop RMB 50,000.
The Qing Feng (Chinese Character) trademark case can be traced back to 2013, when the plaintiff, Beijing QingFeng Steamed Dumpling Shop decided to enter Shandong market while found that the defendant registered "Shandong Qing Feng Restaurant Management Co. Ltd." as its company name, which made the plaintiff impossible to enlarge its market in Shandong. Therefore, the plaintiff sued the defendant to Jinan Intermediate People's Court, asking for the immediate cease of use of Qing Feng (Chinese Character) as business name by the defendant and a public announcement to eliminate influence, with compensation of RMB 590,000 in total. However, the judgments of first trial and appeal confirmed that the defendant did not infringe the registered trademark of the plaintiff. Finally, Beijing QingFeng Steamed Dumpling Shop was dissatisfactory with judgments and applied to the Supreme Court for retrial.
Although the plaintiff finally won the 3-year battle to protect its trademark with the final judgment by the Supremt Court, the punishment result was not so satisfactory. Many operators of old brands sigh that it is too difficult for old brands to protect their trademark, with over slight punishment and repeated infringement happening.
Chen Xu, the general manager of old brand Nei Lu Sheng, points out that the costs to protect trademark is too high. Infringers spend only 2,000 RMB for trademark registration, while when the old brand is infringed, it will cost more than 10,000 to revoke such squatting trademark, which might not be successfully cancelled. Besides, taking the territory issue into consideration, the protection for the time-honored trade name gets even harder. Many old brands in Beijing can be effectively protected in Beijing, while it is still difficult for them to protect their brands and trade names against infringements outside of Beijing.
trademark right of the famous brand. After many years' efforts, a great
improvement has been made by AIC to protect well-known trademarks, that AIC prohibited other non-related enterprise to register well-known trademarks as its business trade name; However, the territory issue is still existing in well-known trademark protection, which is, the well-known trademark can only be protected by the local AIC to avoid others to register it as business trade name. But in other provinces, this trademark cannot block others to register as a business trade name , which means the infringers can still register the famous brand as a business name.
What's more, in practice, as long as the well-known trademark is squatted as business trade names by others, various difficulties will be faced in the process of protection. Since AIC does not enjoy the enforcement power to force infringers to change their business names, even the AIC knows the facts that this business name was registered with other's well-known trademark in the process of handling such case, AIC would held negative attitude to handle this kind of cases because they cannot guarantee the result. This situation leads to greater confusion and more difficulties for the right owner to protect their own trademark right, and also rampant trade name squatting.
6Serious Cases of Selling Fake "Adidas" and "Nike" Products was Cracked Down by Wuhu PSB
HFG's Comments
It is a specific character of internet distribution in China that fake
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&
On November 15, criminal suspects Wang was arrested by Wuhu Police, over 2500 express bills and more than 8000 clothing counterfeiting "Adidas" and "Nike" were seized by the police.
Early in September 2016, Wuhu police received a report that in a rental house in Wuhu, there was always somebody who unloaded goods in the midnight. According to further investigation by police, enormous "Adidas" and "Nike" clothing were stored in that rental house. To avoid raising suspicions, the police investigated the target place further, and finally confirmed that a man surnamed Wang rented this house as the warehouse for online shop.
After two months' tracing investigation, the police collected relevant data and logistic information on distribution of counterfeit products from this rental house, and decide to launch a surprise attack to the target warehouse. Finally at the night of November 15, Wuhu Police captured the suspect. According to his statement, he bought fake brand sport clothing from Guangdong at low price, then distribution via online shop on Taobao. His shop on Taobao has already reached 5 diamonds of credit, with sales volume up to 300,000RMB in total. Presently he is under criminal detention.
HFG Law Firm
2016 11 30
ABOUT HFG
products, using the concealment of
internet sales, are sold via online
shop, which is also one of the focus
issues by the famous brand owners.
The sudden raid action taken by
Wuhu Police attacking the counterfeit
dens and filling a criminal procedure
against the suspect will at certain
extent play a greater deterrent to
criminal cases of counterfeiting in the
region. On identifying the amount of
counterfeit, according to the
investigation by police, the sales
volume of his online shop on Taobao
has reached up to 300,000 RMB.
However, in practice whether all of
these 300,000 RMB will be regarded
as amount of illegal business value
shall be determined by different
polices with different method.
Comparatively speaking, in the
process of such cases, it is possible
that all sales volume will be regarded
as amount of illegal business value by
police in Zhejiang Province along
with the policy of strictly cracking
down the counterfeiting. However, it
is still conserved by police in most
areas of China on handling such
cases, with trends to regard the
purchase price of seized fake
products as amount of illegal
business value. No matter what
method the police uses to calculate
the amount of illegal business value,
this case indicates that Anhui PSB
extremely focuses on IP protection in
the province by tracing and
investigating for more than 2 months
then sharply cracking down, which
significantly
shock
those
counterfeiting groups in the area.
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HFG since found in 2003as a firm uniquely integrated and co-managed by multi-national professionals, persists in providing clients with service of the highest standard and quality all the time. By profound understanding for the commercial requirements of clients from all walks of life all over the world, we do our best to obtain the largest business interests for clients. At the moment, HFG consists of three entities: HFG Law Firm, HFG Intellectual Property Consulting Co. Ltd and HFG Intellectual Property Agency Co. Ltd. and sets up two offices in Beijing and Shanghai.
HFG collects an abundant and diversified knowledge base and multi-lingual communication capability through a long-term practical experience, and does all kinds of intellectual property business for clients in administrative and judicial authorities at various levels at provinces, municipalities directly under the central government and autonomous regions of the country.
HFG integrates the commercial and corporate law services of IP contentious and non-contentious practices, providing a one stop solution to companies whose intangible assets out value the tangibles. Service scope of HFG includes IT communicationpetrochemistry, wine such as grape wine, fashion cosmetics, retail and e-commerce trade, food and pharmaceuticals standard, the acquirement of certificate and the earnings of patent technology etc.
Cases completed by HFG are evaluated as the top ten representative criminal cases and top five classic cases by Ministry of Public Security for several continuous years, in addition, the top ten best cases claimed by high quality brand protection committee of CAEFI and the classical lawsuit in that every year by many medium and high courts at many main provinces. HFG has been awarded as the best IP service provider by many international clients for several continuous years.
HFG is recommended by Legal 500 as the No.1 in terms of IP business in Shanghai since 2010 and by MIP ranked in Chambers and Partners and WRT 1000.
Please feel free to contact us if you have any advice or opinions for IP news or food industry. Contact information: Tel+86 21 5213 5500 Fax+86 21 5213 0895 Email: [email protected]@[email protected]
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