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By Elodie Dellavolta, Foreign Qualified Lawyer
China has its own Intellectual Property (“IP”) rules so you need to learn these quickly!
Here are 10 “Key Rules” to enable you to properly protect your IP in the PRC and so reduce your business risk.
1. Rule No.1: Registration of your Trade Mark in your country of origin gives you no similar Protection in the PRC.
Trade Mark rights are territorial and the ownership of a Trade Mark in one country generally provides no advantage when seeking to enforce that Trade Mark in another country. You must register your Trade Mark without delay in the PRC, and ideally within the 6 months of its application in another country, to possibly back date the PRC application.Protection by registration in the PRC does not cover Hong Kong, Taiwan, Macau. So, registration of your Trade Mark in Hong Kong, Taiwan and Macau does not give you any protection in the PRC. You must separately register your Trade Mark in each of those separate legal jurisdictions.
2. Rule No.2: Be the first to file in the PRC. There is no substitute for this.
Unlike in the US where the Law tends to favour the user of a Trade Mark, China’s IP Law favours the first party to file. There is no effective protection without registration in the PRC. Also remember never to rely on others to register your Trade Mark; indeed if another party registers a Trade Mark in its own name, it may even be able to claim against you!
3. Rule No.3: Check your Trade Mark is available for registration and use
Take professional advice on the registrability of your Trade Mark before making any application. Conducting a comprehensive search on the availability of the Trade Mark in the PRC is recommended.
4. Rule No.4: Enforcement of your Trade Mark can only be effected, once your Trade Mark is registered in the PRC.
You don’t have recourse to the different methods of enforcement in the PRC until you actually have a PRC Trade Mark Registration Certificate. However, be aware that the turnaround time to obtain Trade Mark registration in China (PRC) is 12 to 24 months, from application.
If entering into any collaboration with a Chinese partner, do ensure that the relevant contract protects your Trade Mark rights and do ensure that there is a clear written agreement as to who owns what IP.
5. Rule No.5: Registration of your western language Trade Mark does not protect the Chinese character version of the same Trade Mark.
English is still not widely spoken in the PRC and so Chinese consumers often find that a Chinese name is much easier to pronounce and remember. The Chinese characters version of your brand name may have even more value than the original foreign-language name.
If you do not protect the Chinese language version of your Trade Mark, a third party could register such and prevent you from using it, as recently experienced by HERMES, the French luxury brand company, which lost an appeal to trademark the Chinese language version of its name in China.
So, consider filing a translation and or transliteration of your Trade Mark, in addition to its English character version.
6. Rule No.6: Apply for the Trade Mark for your existing goods/services and also for goods/services to be developed over the next 3 years
Note that the protection of your Trade Mark is limited to the relevant goods/services that the registration covers.
The Chinese system divides each 45 international classes of goods/services into subclasses. To efficiently prevent others from registering/using the same or a similar Trade Mark in the PRC without your prior consent, it is very important that the specifications of goods/services under the registered Trade Mark is appropriately sub classed. The Chinese Registrar appreciates the similarity between the goods/services (E.g: protection of a trade mark for “jeans” will not enable you to prohibit registration/use of a similar Trade Mark for “socks” by a third party), since they fall within different sub-classes.
7. Rule No.7: Monitor your Trade Mark
We recommend you to subscribe to a “watch service” so that you receive a report of all similar Trade Marks once advertised.
Also proactively record your Trade Mark with the PRC General Administration of Customs (GAC) to access a 7-years period of PRC Customs protection in the course of the import and export of goods bearing the Trade Mark.
8. Rule No.8: Use your Trade Mark within 3 years of registration
Use your Trade Mark to prevent your right being cancelled for non-use. Ask for our advice to keep your registration alive before it is challenged by a third party.
9. Rule No.9: Protect your Trade Mark through domain name registration under the Chinese top level domain “.cn”
10. Rule No.10: Adjust your Trade Mark licensing agreements to fit into the PRC legal system
Remember, certain clauses of any IP licence may be considered invalid under the Chinese legal system, so again, take legal advice in advance!
IP protection is a critical part of ensuring your business success, so get it right. Mistakes can be time-consuming and expensive to resolve.
IP protection is a complex legal area, so obtain professional advice as early as possible.
For enquiries related to this, please contact Chris Hooley (email@example.com), Vera Sung (firstname.lastname@example.org) or Elodie Dellavolta (email@example.com).
By Richard Healy, Partner.
You may have read recently that the People's Republic of China ("PRC") Ministry of Justice has recently issued a directive requiring lawyers in mainland China to take an oath of loyalty to the Communist Party. Accordingly, all newly admitted lawyers, or lawyers renewing their practicing licences are required to swear an oath of loyalty which includes the following wording:
"I promise to faithfully fulfill the sacred mission of socialism with Chinese characteristics….. be loyal to the motherland its people and to uphold the leadership of the Communist Party of China."
The justification for requiring this oath is that it is supposed to increase the integrity of Chinese lawyers. Whilst that aim seems doubtful, this requirement has drawn criticism from many quarters within China suggesting that it will hinder the development of the Chinese legal system and damage the rule of law in the PRC.
This situation should, however, be contrasted to situation in Hong Kong, which has the status of a Special Administrative Region within the PRC and applies principles of "one country two systems". The Hong Kong rules of professional conduct do not require the taking of any such oath and indeed the fundamental principles of professional practice emphasize the duty to the client as set out in Rule 2 of the Solicitors' Practice Rules:-
"A solicitor shall not, in the course of practicing as a solicitor, do or permit to be done on his behalf anything which compromises or impairs or is likely to compromise or impair-
(a) his independence or integrity;
(b) the freedom of any person to instruct a solicitor of his choice;
(c) his duty to act in the best interest of his client;
(d) his own reputation or the reputation of the profession;
(e) a proper standard of work; or
(f) his duty to the court."
It should also be noted that common law principles that still apply in Hong Kong, including the principle of confidentiality between lawyer and client and legal professional privilege. The directive by the Chinese Ministry of Justice requiring lawyers to swear an oath of loyalty to the Chinese Communist Party perhaps does no more than reiterate what many overseas have long suspected, that mainland Chinese lawyers first and foremost obligation is to the State and the Chinese Communist Party. For this reason many overseas clients prefer to take advice as to their overall strategy and structuring of China operations from Hong Kong lawyers where they know they will receive independent advice based solely upon the client's best interests.
OLN can assist you with PRC matters
OLN is happy to assist you with China related matters. With our team of experienced lawyers and our years of experience in helping our clients strategize and structure deals in China, OLN is able to serve your needs comprehensively.
OLN offers a wide range of services including the establishment and maintenance of business presences in China and all that is associated with such a business.
By Richard Healy, Partner
As one of the world's fastest growing economies, China rapidly become a "hot spot" for foreign investment. However, U.S. companies doing business in China must understand the risk and challenge in terms of US Foreign Corruption Practices Act ("FCPA") compliance.
By Christopher Hooley, Partner
China's Immigration policy is currently under review, with plans for China to introduce its first ever Immigration Law in an effort to control the increasing number of foreigners coming to China to work.
Whilst details of the policy have not yet been released, the Chinese Government has been advised to learn from the experience of other countries in regulating immigration.
By Christopher Hooley, Partner
China has now passed a Tort Liability Law ("the Tort Law"), which will come into effect in Mainland China on 1st July 2010.
The Tort Law integrates the basic legal concepts of tort-related provisions, now contained in other PRC laws, into a single piece of legislation, covering a range of areas including product and medical product liability, environmental protection and high risk and hazardous activities. These are all activities and areas in which foreign owned enterprises are increasingly active in China.