protecting your ip & brand protection - asialink business · protecting your ip & brand...

King & Wood Mallesons / www.kwm.com

KING & WOOD MALLESONS KATIE LEWIS / SCOTT BOUVIER

Protecting your IP & brand protection [insert date] 2016


IP overview 01

03 04 05

2

AGENDA

02 Trade marks

Advertising law

Labelling laws

E-commerce contracts


ISSUES Someone else registers your trade

mark first

No consideration given to Chinese language mark

Counterfeit and packaging risks

Developing a robust and tailor-made IP protection strategy

Doing your IP due diligence

Registering IP ownership and licensing activities in time and taking steps to enforce your rights.

Take advantage of the administrative enforcement options.

Pay special attention to trade secret protection.

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Chinese authorities have made considerable progress in improving IP enforcement in recent years.

China now has over 300,000 law enforcement officials involved in IP enforcement and new guidelines in place to provide stiffer penalties for IP violations.

However, inadequate enforcement of IP laws and regulations persist. To minimize risk, you can protect your IP in China by:

INTELLECTUAL PROPERTY PRC ENVIRONMENT


IP LEGAL FRAMEWORK OVERVIEW OF PRC SYSTEM

20 YEARS FOR INVENTION (NOVELTY + CREATIVITY + PRACTICALITY)

10 YEARS FOR DESIGN AND UTILITY MODEL

FIRST-TO-FILE SYSTEM REGISTRATION WITH

SIPO CHINA IS A PATENT

COOPERATIVE TREATY MEMBER

VALID FOR 10 YEARS, EXTENDABLE

FIRST-TO-FILE SYSTEM REGISTRATION WITH CTMO UNREGISTERED WELL-

KNOWN TRADE MARKS CAN BE PROTECTED IN CHINA AS WELL

50 YEARS FOR SOFTWARE / CORPORATE AUTHORS

LIFE + 50 YEARS FOR AUTHORS

VOLUNTARY REGISTRATION WITH CPCC

FOLLOWS BERNE CONVENTION

PRC ANTI-UNFAIR COMPETITION

LAW

CATCH-ALL PROTECTION

TRADE DRESS NO

REGISTRATION

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Trade mark rights are based on registration not use in China.

First to file system (subject to ‘earlier + well-known in China’ exception).

Duration of protection can be indefinite - initial term of 10 years is renewable.

Trade mark application process – approx. 15 – 24 months until registration.

No extra official fees for first 10 years.

THE EARLY BIRD CATCHES THE WORM

TRADE MARKS

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PROCESS


PROCESS TRADE MARKS

Type of Fees

Amount (per TM)

Trade mark filing fees (fees for filing & registration)

AU$600

Professional fees (attorney fees for filing & registration)

AU$1,000 to $2,000

What to expect in terms of costs?

Find a reliable service provider, either directly (with references) or through an Australian firm.

Ask for cost estimates and monitor each step.

Cover the trade marks and goods/services planned for China.

Protect your trade mark in both English and Chinese, and consider any colloquial nickname.

Review your strategy after initial filing (your plans may have moved on 12 months later).

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Registered for rice products

SunRice in China - Case study TRADE MARKS

30: Rice, rice noodles, rice crackers, rice cakes, puffed rice, rice biscuits, rice waffles, rice starch, rice puddings, frozen, prepared and packaged meals consisting primarily of rice.

KANGAROO BRAND 30: Rice, rice noodles, rice crackers, rice cakes, puffed rice, rice biscuits, rice waffles, rice starch, rice puddings, frozen,

prepared and packaged meals consisting primarily of rice. KANGAROO BRAND (in Chinese Characters)

30: Rice noodles, rice crackers, rice cakes, puffed rice, rice biscuits, rice waffles, rice starch, rice puddings, frozen, prepared and packaged meals consisting primarily of rice.

30: Rice; rice crisps; rice noodles; rice crackers; rice cakes; puffed rice; rice biscuits; rice waffles; rice puddings; prepared and packaged meals consisting primarily of rice.

SUNRICE 30: Rice; rice crisps; rice noodles; rice crackers; rice cakes; puffed rice; rice biscuits; rice waffles; rice puddings; prepared and packaged meals consisting primarily of rice.

30: rice; rice noodles; rice crackers; rice crisps; rice cakes; rice biscuits; rice waffles; rice starch; rice based snack foods, snack food products made from rice; rice puddings; puffed rice; frozen, prepared and packaged meals consisting primarily of rice; frozen, prepared and packaged fried rice; frozen, prepared and packaged flavoured rice.

FRAGRANT SUN in Chinese Characters 29: Prepared and cooked foods, meals, meal kits, and snacks made from meat, fish, poultry, dairy products, pulses, fruits and/or vegetables; salads in this class; desserts in this class; dairy substances and dairy substitutes for use as food or as ingredients for food, dairy products in this class. 30: Rice, edible rice products including rice snack, including plain and flavoured cooked rice and rice products, rice crackers; prepared and cooked foods, meals, meal kits and snacks made from rice, pasta, noodles, spaghetti, couscous and/or cereals; confectionery; custards, including rice custards; puddings, including rice puddings; salads in this class, including rice salads, desserts in this class, including rice desserts; dairy products in this class; condiments, sauces and seasonings. 7


伟哥 (“Strongman”) vs 万艾可（wan ai ke） 20,500,000 hits 2,150,000 hits

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Viagra’s Chinese name

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TRADE MARKS CHINESE BRANDING MATTERS


Do not disregard the Chinese language trade mark.

The Chinese name should avoid words with an intrinsic meaning as this has a much higher risk of rejection.

Using common names or terms will also greatly increase the risk of rejection.

Consider not only Mandarin but also Cantonese and other major dialects in order to avoid a Chinese name that is inappropriate.

TRADE MARKS CHINESE BRANDING LESSONS

The brand carries a number of meanings that bring Eastern and Western influences together. Fire and water was included in our brand, reflecting the two characters in our Chinese firm name, ‘Jin Du’. The first character means “gold” which is a symbol for metal. The second character has a “left” and a “right” side. The left side means “wood” and the right side means “earth”. Combine that with the red and blue colours (fire and water) and you have the five feng shui elements.

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If a pirate registers “your trade mark” then: You may be sued for infringement of trade

mark for sales within China. You may be sued for manufacturing products

with such trade mark within China. Your trade marked products may be seized by

PRC Customs. You may need to buy back for high price. Case studies: Co-existence agreement – entering into an

agreement with the owner of the prior mark Legal action – commencing proceedings

against the owner of the prior mark

TRADE MARKS RISKS FROM FAILURE TO REGISTER BRAND

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CASE STUDY BRAND PROTECTION

WHO?

ISSUE? Counterfeit Reid Fruit products found in China

Which is the authentic product?

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CASE STUDY KEY TAKEAWAYS: HOW TO IMPROVE?

… RATHER THAN CHASE OUR TAILS THROUGH

EXPENSIVE LITIGATION WE SHALL JUST KEEP BEING

INNOVATIVE AND KEEPING AHEAD OF THE

COUNTERFEITERS… REID FRUITS

Developing individual QR codes

for each carton

Changing the base of the carton

Developing special laser foil stickers that

are difficult to replicate

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BRAND PROTECTION CONSUMER AWARENESS

• Enable consumers to verify the authenticity of a product.

• Enable consumers to identify whether a product has been tampered with.

• Use features that enable personnel within the supply chain to track products and distinguish genuine products from counterfeits.

• Identify online distribution channels and promotional activities of counterfeiters online.

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Must be clear and explicit in advertisements containing the following information – performance, place of origin, usage, quality, price, producer or manufacturer, term of validity and promise of a product, or on the items, forms, quality, price and promise of a service.

ART 4

An advertisement shall not:

CONTAIN FALSE INFORMATION CHEAT OR

MISLEAD CUSTOMERS

ART 8

An advertisement must not involve any of the following:

ART 9

NATIONAL FLAG, EMBLEM

OR ANTHEM

NAMES OF STATE ORGANS OR

FUNCTIONARIES

WORDS SUCH AS STATE-LEVEL,

HIGHEST-GRADE OR BEST

MARKETING & ADVERTISING CHINA: FALSE & MISLEADING ADS

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A fine of RMB6 million (USD 1 million) for false advertising was imposed on Crest for false advertising by the Shanghai Industry and Commerce Administration Bureau.

Crest’s whitening products advertisement was doctored through computer software.

This marks the biggest fine ever levied by China on a charge of false advertising.

Taiwan star Dee Hsu has been the spokesperson for the product.

TEETH WHITENING WITHIN ONE DAY BY USING CREST PRODUCTS

MARKETING & ADVERTISING CHINA: FALSE & MISLEADING ADS

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CAN’T USE AN ENDORSER FOR:

Medical treatment, drugs, and medical devices.

Healthcare food. Pesticides,

veterinary drugs, feed, and addictives.

Celebrities who are paid to be spokespeople for products should try the product before they represent it.

Those making false recommendations may risk substantial fines.

MARKETING & ADVERTISING CHINA: CELEBRITY ENDORSEMENT

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LABELLING REQUIREMENTS OVERVIEW

LABELLING CAN BE IMPORTANT

WHY?

STRICTER ENFORCEMENT

BY GOVERNMENT

AGENCIES

GREATER NUMBER OF

“PROFESSIONAL CONSUMERS” WHO CHASE

AFTER EVERY TINY

VIOLATION

What elements have to be labelled? What claims may be

labelled? Different requirements

for different models

KEY ISSUES

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CONTRACTUAL ISSUES WHAT TO LOOK FOR WITH E-COMMERCE SERVICE PROVIDERS What services do you require?

What do they offer themselves and what do they subcontract?

Can you seek to include any exclusive rights in your arrangements with service providers?

Is the service provider imposing restrictions on your ability to explore other Chinese market entry (eg, exclusivity obligations, first refusal rights)?

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CONTRACTUAL ISSUES WHAT TO LOOK FOR WITH E-COMMERCE SERVICE PROVIDERS How will responsibilities be allocated?

Project management and planning e-commerce software and platform Technology support Marketing and promotions Legal compliance Payment management and processes Logistics (unpacking pallets, labelling, pick

and pack) and product distribution Clearing customs, inspection and

quarantine Product recall Customer services and support

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CONTRACTUAL ISSUES WHAT TO LOOK FOIR WITH E-COMMERCE SERVICE PROVIDERS

How much oversight do you want over your service provider? How portable are the services offered: Can you shift the web presence to

a new provider? (IP issues) Who owns the customer data?

How will risks be allocated? Advertising accuracy Product liability Insurance Returns Customer claims

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CONTRACTUAL ISSUES WHAT TO LOOK FOR WITH E-COMMERCE SERVICE PROVIDERS Do you comply with the

requirements imposed by individual online platforms providers?

Do you need your own WFOE? Do you have to comply with

Chinese product standard certifications, Chinese packaging and labelling laws?

How are product liability and returns managed?

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1 Parties – Identify correct legal entities. Goods – Describe the goods clearly, including:

Quantity; Quality and purpose of the goods; and Any packing and packaging requirements.

Term of agreement – Duration, single shipment or multiple shipments (in the case of the latter, consider minimum orders and notice periods).

IDENTIFY AND DOCUMENT KEY COMMERCIAL TERMS

2 Price of goods – Per unit price or per shipment price (also consider in light of delivery obligations – see issue 3).

Currency – $AU, $US, ¥. Method of payment –

Open account, letter of credit, documentary credit. Sellers should evaluate the creditworthiness of the buyer’s bank.

Payment terms – If ongoing, agree trading terms and whether interest will be payable in event of delay.

AGREE ON PAYMENT PROCESSES AND PROCEDURES

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INTERNATIONAL TRADE CONTRACTS ISSUES TO CONSIDER


CP

T/C

IP

FOB

C

FR/C

IF

FAS


3 Delivery – Specify delivery location and date. Transportation – Consider the carrier type (air / ship) and handling charges. Licences, authorisations and other formalities – Responsibility for obtaining

export and import licences, and attending to customs and other formalities. Transfer of risk and/or title – On delivery or on payment for the goods. Insurance – Specify types of policy and minimum insured amounts required. Incoterms ® 2010 rules – Consider whether and which of the 11 Incoterms ®

2010 rules should be incorporated:

BE CLEAR ON RESPONSIBILITIES FOR DELIVERY OF GOODS

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At what point does the seller satisfy its obligation to “deliver” the goods?

FCA

DAT

DA

P/D

DP

BUYER’S NAMED PLACE OF DESTINATION

SELLER’S PREMISES

BUYER’S NAMED TERMINAL

EXW

NOMINATED CARRIER



4 Inspection obligations and time limits on claims – Buyer obliged to inspect

the goods and/or must raise a claim within certain period of time after delivery. Remedies and damages – In event of delay in delivery and/or delivery of non-

conforming goods. Consider: Any rights to indemnity; Limits on liability; and Whether termination rights are triggered.

Product recalls – Specify party responsible for the process and/or the costs.

THINK THROUGH CONSEQUENCES IN EVENT OF BREACH

5 Governing law – Law of PRC – Some contracts must be governed by PRC law. Law of NSW, Australia (or other Australian state). Note: Unless expressly excluded, the UN Convention on Contracts for the International Sale of Goods will automatically apply if either of the above systems of law are chosen.

Jurisdiction – Exclusive or non-exclusive, which court? Arbitration – Much more common in international trade contracts. Specify:

Seat and language of arbitration; and Ad hoc or institutional arbitration (if the latter, which arbitral institution?).

GOVERNING LAW, JURISDICTION AND DISPUTES ARE CONNECTED ISSUES

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A bit about us… Awards and recognition

INT’L LAW FIRM OF THE YEAR

Legal Business Awards 2012

With over 2,700 legal staff, KWM offers extensive technical expertise, contacts and teams across the globe, where you need us most. Being the only international legal network to offer Hong Kong, Australian, PRC, English and European law, we are able to offer you the synergies, expertise and relationships you need to navigate the region’s complex web of law and regulations.

On-the-ground in China, you can rely on the support of our bilingual and locally qualified lawyers who will support you through your legal requirements. With over 1,100 lawyers across China, you can be assured that we have the resources and expertise to get the job done.

Our IP lawyers are experts in their fields with many holding advanced degrees as well as having technical backgrounds and experience working within industry. We work with some of the biggest and most recognisable brands, protecting their brand, developing their business and strengthening their position in the market.

In IP our team is best known for having the ability and depth to assist clients in any area of contentious or non-contentious IP in the areas of copyright, patent, trade marks/brands and designs law, particularly complex and cross-jurisdictional IP litigation.

550+ partners,

2200+ lawyers

30 Global offices

AWARDS China Law Firm of the Year ALB China Law Awards, 2014 Intellectual Property Firm of the Year in China Asia-Mena Counsel, 2013 Most Innovative Law Firm (Asia Pacific) Financial times, 2014 Firm of the Year Representing Corporate Asia & Middle East Survey, 2013-14 Australia Copyright firm of the Year Asia IP Magazine Asia IP Awards, 2014 Best in IP Litigation (Katrina Rathie) Euromoney Australasian Women in Business Law Awards, 2014 RANKINGS Band 1 for IP - Chambers Asia Pacific,

2014 Leading Firm - IAM Patent 1000, 2014 Tier 1 for IP – Patent (Contentious) Managing IP (Australia), 2014 Gold Ranking – WTR1000, 2014 Tier 1 for IP– APL500, 2014

LARGEST GLOBAL

LEGAL NETWORK

HQ outside of US or UK

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King & Wood Mallesons / www.kwm.com 26

… and where we’re based Our global network


KING & WOOD MALLESONS KATIE LEWIS / SCOTT BOUVIER

Protecting your IP & brand protection [insert date] 2016

protecting your ip & brand protection - asialink business · protecting your ip & brand...

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