On April 23, 2019, the decision of amending the Trademark Law of P.R.C. was approved at the 10th meeting of the Standing Committee of the 13th National People's Congress of China. The revised provisions of the Trademark Law shall come into force on November 1, 2019.

Article 4 ，Clause 1 revised as:

Any natural person, legal person, or other organization in need of obtaining the exclusive right of using a trademark for their goods or services in the course of their manufacturing and business activities shall file an application for the registration of the trademark with the Trademark Office. Any trademark application that is with malicious purpose and not filed for the purpose of use shall be rejected.

Article 19, Clause 3 revised as:

Where a trademark agency is or should be aware that the trademark to be registered by the entrusting party shall fall under the circumstances stipulated in Article 4, Article 5 and Article 32 of this Law, it shall not accept the entrustment.

Article 33 revised as:

Any prior right holder or interested party, shall they find a trademark application that has been published after the preliminary examination and approval is in violation of the provisions in Clause 2 and 3 of Article 13, Article 15, Clause 1 of Article 16, Article 30, Article 31, Article 32 of this Law; or anyone find it in violation of the provisions of Article 4, Article 10, Article 11, Article 12 and Clause 4 of Article 19,may oppose the trademark application with the Trademark Office, within 3 months from the date of publication. Where no opposition is filed after 3 months, the trademark shall be approved for registration, issued with a certificate of registration, and then published.

Article 44,Clause 1 revised as:

If a registered trademark violates the provisions of the Article 4, Article 10, Article 11, Article 12 and Clause 4 of Article 9 of this law, or the registration is obtained by fraudulent means or other improper means, it shall be invalidated by the Trademark Office; any other organization or individual may request for invalidation of the registered trademark with the Trademark Review and Adjudication Board.

Article 63, Clause 1 revised as:

The indemnity amount for infringement of exclusive rights to use a trademark shall be determined in accordance with the actual losses borne by the right holder due to the infringement; where it is difficult to determine the actual losses of the right holder, the indemnity amount may be determined in accordance with the gains derived by the infringers; where it is difficult to determine both the actual losses of the right holder and the gains derived by the infringer, the indemnity amount shall be determined reasonably with reference to the multiples of the licensing fee of the trademark. For malicious infringement of the exclusive right to use a trademark, in severe cases, the indemnity amount shall be determined in accordance with the abovementioned means and then multiplied by one to five times. The indemnity amount shall include the responsible expenses incurred for the right holder to curb the infringement.

Article 63, Clause 3 revised as:

Where it is difficult to determine the actual losses bourn by the right holder due to infringement, the gains derived by the infringer or the licensing fee of using a registered trademark, the People’s Court shall rule on an indemnity amount of no more than RMB 5 million based on the extent of the infringement.

Article 63, Clause 4 (Newly added):

The People’s Court hearing a trademark dispute case shall, at the request of the right holder, order to destroy the goods of the counterfeited registered trademarks, unless under exceptional circumstances; order to destroy the materials and tools for the production of the goods of the counterfeited registered trademark without any compensation; or in some cases, the People’s Court shall prohibit the afore-mentioned materials and tools from entering commercial channels without any compensation.

Article 63, Clause 5 (Newly added):

The goods of counterfeited trademark are not permitted to enter commercial channels even after the removal of the counterfeited trademark.

Article 68, Item 3 of the acts committed by Trademark Agencies:

(3) In violation of the provisions of Article 4 and Item 4 of Clause 3 of Article 19 of this law.

Article 68, Item 4 of the acts committed by Trademark Agencies (newly added):

Those apply for trademark registration with malicious intent are subject to a warning, a fine or other administrative punishment as the case may be; and those maliciously initiate a trademark litigation are subject to the penalty ruled by the People’s Court in accordance with law.

(Source: The National People’s Progress of P.R.C. website)

On April 23, 2019, the "Anti-Unfair Competition Law of the People's Republic of China (Second Amendment)" was adopted by the 10th Session of the Standing Committee of the 13th National People's Congress of China, which went into force immediately upon announcement.

The revised provisions are as follows:

Article 9

In the definition of “trade secret”:

“Technology or business information” is revised as “technology, business and other information”.

Item 3 of the acts infringing on trade secret:

“In violation of an agreement” is revised as “in violation of the confidentiality obligations”

Item 1 of the infringing acts has one newly added circumstance:

“Obtaining trade secrets of right holders by theft, bribery, fraud, intimidation, electronic intrusion or other improper means”

Newly added Item 4 in infringing acts:

“Instigating, tempting, helping others to violate confidentiality obligations or rights holders’ confidentiality requirements; obtaining, disclosing, using or allowing others to use the trade secrets of the right holder”

Newly added paragraph:

“Any other natural person, legal person or unincorporated person other than the business operator who commits the illegal acts listed in the preceding paragraph shall be deemed to have infringed on trade secrets”.

Article 17

Increased legal indemnity:

The limit increased from RMB 3 million to RMB 5 million.

Newly added punitive compensation provisions applicable to trade secret infringement cases:

“If the business operator maliciously commits a violation of trade secrets, in serious cases, the amount of compensation shall be determined according to the actual loss suffered by the right holder due to the infringement or the infringer’s gains from the infringement and then multiplied by one to five times”

Article 21

Increased legal indemnity:

The limit increased from RMB 3 million to RMB 5 million.

Increased administrative penalties for violations of trade secrets:

- Added punishment: Confiscation of illegal gains

- Increased fine limits: “in serious cases, impose a fine between RMB 500,000 and RMB 3 million” is revised as “in serious cases, impose a fine between RMB 1 million and RMB 5 million”.

Article 32 (Newly added)

The provisions concerning the transfer of burden of proof in “the elements of constitution of trade secrets”:

“In the civil trial procedure for infringing trade secrets, the trade secret right holder has provided prima facie evidence that confidential measures against the claimed trade secrets is taken and has reasonably indicated the trade secret is infringed, the alleged infringer should prove that the trade secret claimed by the right holder is not a trade secret under this law.

The provisions concerning the transfer of burden of proof in “infringement acts”:

“The trade secret right holder has provided prima facie evidence that the trade secret is infringed and has provided one of the following evidences, the alleged infringer should prove that there is no infringement of the trade secret:

(1) There is evidence that the alleged infringer has access to or has opportunity to obtain the trade secret and the information used by the alleged infringer is substantially the same as the trade secret;

(2) There is evidence that the trade secret has been disclosed, used or suspected of being disclosed and used by the alleged infringer;

(3) There is other evidence that the trade secret is infringed by the alleged infringer.”

(Source: The National People’s Progress of P.R.C. website)

In the 2018 statistics of patent development in between China and the countries along the “Belt and Road”, it’s found China had 3,299 patents announced in 17 of the “Belt and Road” countries, up 10.6%. 　　

From the perspective of patent quality, the average rate of patent granted in “Belt and Road” countries is 54.3%, up 10% over last year; the average amount of claims in the patents granted in these countries is 15.4, which is noticeably higher than 8.3, the average amount of claims in the patent granted in China in 2018.

As for China patent filing in “Belt and Road” countries, totally 6,073 applications published in 19 countries; Among which, Korea has published 2,146 China patents applications as the first application destination country. 85.9% of the patent applications published are found in the Top 5 countries.

In 2018, 49 “Belt and Road” countries are found with patents granted and filed in China, which amounted to 14,877 and 22,290 respectively, up 7.8% and 4.9%.

In 2018, China patents filed in “Belt and Road” countries are mostly in the fields of computers, telecommunications and other electronic/equipment manufacturing, amounted to 1,606 applications; Instruments and meters manufacturing, chemical raw materials, software & information technology services, and Internet services ranked 2nd to 5th amounted to 590, 485, 364 and 358 applications. The top 10 applicants are all enterprises.

(Source: CHINPA website)

Recently, the State Administration of Foreign Exchange of P.R. China (SAFE) released the balance of payments data of 2018. It’s reported that China’s IP import reached 236 billion yuan (US$35.8 billion), up 24.74%, which is the highest year-on-year growth rate in the past decade. In addition, China’s patent exports amounted to 36.8 billion yuan (US$5.6 billion), up 16.67%. The trade deficit was $30.2 billion, up 26%.

The balance of payments has included the import and export of IP royalty since 1997, which increased by an average of 22% annually. At present, China has become the 4th largest patent importer in the world. According to the International Monetary Fund, in the first three quarters of 2018, China ranked 3rd with $27.7 billion in patent royalty imports; and, according to SAFE, China's patent royalty exports is ranked 11th in the world.

(Source: www.laoyaoba.com)

On April 1st, WIPO released an advanced AI graphical search tool, which will help identify trademarks in the target market faster and easier, unlike the graphic search tools of the past that could determine the approximation of the trademark graphics mainly by identifying the shape and color in the trademarks.

The new AI search technology of WIPO utilizes deep neural networks and graphical element classification data from the Madrid System of Trademark International Registration and several major trademark offices. Free access is provided to all users.

The new search tool has comprised the data from 45 national trademark offices participating in the project (including those that do not use the graphical element classification system). This, thus far, represents a total of 38 million trademarks. Users who submit complex or combined graphics can use the built-in editing tools to cut the required search area in the graphics for further simplification to acquire more relevant results.

(Source: WIPO website)

Case Summary:

Lafite Rothschild Winery (hereafter referred to as “Lafite Rothschild”) has two world-renowned wines – “CHATEAU LAFITE ROTHSCHILD” and “CARRUADES de LAFITE”. In China, they are also known as "Big Lafite" and "Little Lafite". Although Lafite Rothschild applied for registration of the English logo "LAFITE" early, it did not register the corresponding Chinese translations including "拉菲" and "拉斐" (both as “La Fei” in pinyin), resulting in "拉斐" being registered in Hong Kong in 2002 by a company named “France Rafael Wine (Asia) Co., Ltd.”; because the other party submitted the application on an earlier date, Lafite Rothschild failed to invalidate the "拉斐" trademark even after escalating the litigation to the trial by the Supreme People’s Court. This had become a hindrance to Lafite Rothschild's endeavor to register the Chinese trademarks including "拉菲".

In June 2015, Lafite Rothschild filed to the Trademark Office for the registration of the “拉菲珍寶” (paraphrase as “Lafite Treasures”) trademark designated for use in “wines and other goods” in Class 33. In May 2016, the Trademark Office cited 5 trademarks including the afore mentioned “拉斐” trademark to reject the application (the other 4 trademarks were also invalidated during the proceeding of this case). Lafite Rothschild thus filed for the refusal review with the Trademark Review and Adjudication Board (TRAB). However, the TRAB found that “the application trademark and the reference trademark are composed and pronounced similarly. The two trademarks, if coexist in the market, will make the consumers confused with and misidentifying the sources of goods., thus it has constituted trademark similarity in the same or similar goods. "

Court’s Judgement:

Unitalen, representing Lafite Rothschild, appealed to the court, the Beijing Intellectual Property Court of the first-instance and the Beijing Higher People's Court of the second instance all ruled to revoke the ruling of the TRAB and held that the application trademark “拉菲珍寶” and the reference trademark “拉斐” do not constitute similarity, the coexistence in Class 33 “wines and other goods” will not cause confusion and misidentification among consumers.

Typical Significance:

The typical significance of this case is that the popularity of the application trademark is included in the consideration for the determination of similarity of the trademark and whether it is easy to cause confusion and misidentification in the review of refused trademark. In the past cases, it was rare to see in the judgment of a refusal review the expression of “existing market share formed” of an application trademark, and more importantly, the examination of the similarity of the mark itself. However, the popularity of the trademark and the trademark itself are integrated. The relevant consumers, in identifying the source of goods and services by a trademark, will also consider its popularity as one of the factors. Therefore, in reviewing the similarity of a trademark, it is objective, fair and realistic to consider the evidence of the popularity of the trademark before its filing date. 　　

Case Summary :

When the CHATEAU D’AUSSIERES wines of Lafite had just entered the Chinese market, the distributors tried to find a proper and catchy Chinese name for it. “CHATEAU” is an existing vocabulary in French, meaning “wine, castle”, and “D’” is a preposition in French that refers to belonging, and has no practical meaning, so "奧希耶" (“Ao-xi-ye” in pinyin) was selected as the Chinese translation of "AUSSIERES", and it has been well known to the public after years of word of mouth in the related fields. However, without timely registration, in 2010, the "奧希耶" trademark was squatted by Fuzhou Helanshan Civic Wine Sales Co., Ltd with designation in "wine and other goods”.

On December 1, 2015, CHATEAU D’AUSSIERES applied for invalidation of No. 8386240 “奧希耶” trademark with CNIPA (formerly the Trademark Review and Adjudication Board of the State Administration for Industry and Commerce - TRAB). The TRAB held that there was significant difference between “奧希耶” and the reference trademark “CHATEAU D'AUSSIERES” in terms of composition, pronunciation and overall appearance, and thus maintained the trademark at dispute.

CHATEAU D’AUSSIERES refused to accept the ruling and filed an administrative lawsuit against it with the Beijing IP Court.

Court’s Judgement:

On March 29, 2018, the Beijing IP Court made a first-instance judgment, which held that CHATEAU D’AUSSIERES had made extensive use of the "CHATEAU D'AUSSIERES" and "奧希耶" logos, with a high reputation, "AUSSIERES" and "奧希耶” have formed a corresponding relation. Due to the stable connection between these two, if the registration of the trademark is approved, it will inevitably lead to confusion and misidentification among the relevant public. Therefore, the disputed trademark and the reference trademark have constituted similarity. In March 2019, the final judgment of the Beijing Higher People's Court upheld the judgment of the first instance.

Typical Significance:

The typical significance of this case is to break the inherent criteria of judging the similarity of trademarks, i.e. Chinese and foreign trademarks shall constitute similarity if they have formed a stable correspondence in between. This has provided a solution to combating malicious trademark squatting of Chinese translations of well-known foreign trademarks. In judging the similarity of trademarks, it shall not be limited to physical comparison, but also consider the popularity of foreign trademarks, the perception of relevant consumers, and the malicious intent of squatters. 　　

Recently, Unitalen Attorneys at Law selected the “Top Ten” cases handled by the firm in 2018, which covers trademark right determination, trademark infringement, unfair competition, patent right determination, patent infringement and determination of non-infringement, and copyright criminal prosecution. These cases are picked for the reference value of the adjudication rules confirmed in the judgements to the future similar cases, and the impact of the outcome of the judgments on the related industries.

▼2018年度集佳十大案例

Top 1. Tencent Video vs. theworld.cn Internet Browser

Top 2. Zhejiang Blue Star vs. Trademark Review and Adjudication Board , Talpa Content B.V.

Top 3. Lafite Rothschild, TRAB vs. Nanjing Jinse Xiwang Wines

Top 4. Tencent vs. Shenzhen Wechat Food

Top 5. Litens vs. Gates Unitta, Chery Auto

Top 6. Zhang Hui vs. Patent Reexamination Board

Top 7. A patent non-infringement case (client name undisclosed)

Top 8. Sogou vs. Jiugong et. al.

Top 9. Foton Auto vs. Zhixing Hongyuan et. al.

Top 10. Beijing Jiujiu Hudong vs. Suzhou Lao Wantong et. al.

Approaching the World IP Day on April 26th, the Higher People's Courts issued their Top 10 IP right protection cases in 2018 one after another. Unitalen had the following 2 cases selected into “Top 10 Cases of IP Judicial Protection of Beijing Courts in 2018” and “Top 10 Cases of IP Judicial Protection of Jiangsu Courts in 2018 respectively:

- Unitalen Won the Unfair Competition Case of Second Instance Concerning Navigators Ads Blocking for Tencent

- Unitalen Won 10M Yuan Indemnity for Litens in a Patent Infringement Case Involving Complex Technical Details

On the occasion of World IP Day of April 26th, Li Yongbo, Unitalen senior partner and director of Zhongguancun Vision IP Innovation Institute, was interviewed by China Xinhua News Network (CNC) on the hot issues such as the prominent theme of World IP Day and the status quo of China's intellectual property protection.

Interview Video:

http://xhpfmapi.zhongguowangshi.com/vh512/share/6060367?channel=weixin&from=singlemessage