Newsletter 201711

36 DEC. 2016 39 Nov. 2017

News

The firm assisted a client in winning a patent infringement case on the doctrine of equivalents……………..………..2

Qualcomm sued Apple for patent infringement by iPhone...... 2

McDonald’s (China): the name of the restaurant is not changed……………..………………………………………2

62% of Samsung’s patents being announced invalid in the patent war between Huawei and Samsung…………..…2

Win-win or no-win: JDB and Wang laoji share the usage of red can packaging…………………………………….…3

The exports of the intellectual property royalty of China increased by 489.4% for the first 7 months………….…..4

Articles

Action plan on protection of IPRs of foreign-invested enterprises…………………………………………….…….5

Patent infringement in China: finding the source……….8

The ins and outs of reconsideration……………………..10

New development of patent infringement compensation in China………………………………………………….…….12

Introduction to the administrative regulations of prioritized patent examination………………………………………..15

Administrative litigation on review of opposition to trademark “雄豹狼 & DEVICE”……………………..……19

Brief analysis on the judicial data (trademark section) of Beijing IP Court in 2016……………………………..……21 Nov. 2017 Editorial Nov. 2017 News

From the editor News In earlier September, twelve state ministries and commissions including SIPO jointly issued an action plan, in order to implement the Notice on a Number of Measures on the Promotion of Foreign Investment Growth issued by the State Council. This action plan requires the twelve state ministries and commissions to take specific actions against illegal acts on intellectual The firm assisted a client in winning a patent Qualcomm for overcharging phone chip royalties and property rights of foreign-invested enterprises, and protect the legitimate rights and interests of foreign-invested enterprises. infringement case on the doctrine of withheld the contract value of nearly 1 billion dollars to We reported the details of the action plan in this issue. equivalents Qualcomm. In responding to Apple’s action, Qualcomm initiated ITC investigation against Apple. At the patent side, we updated the development of patent infringement compensation in China and introduced in detail in Recently, we assisted one of our clients in winning a case in what circumstances may an accused infringer not pay compensation to the right holder or may an accused infringer continue a patent infringement litigation over a patent for invention. McDonald’s (China): the name of the restaurant exploiting the claimed invention. Further, we probed into the administrative reconsideration before SIPO, which is less used by is not changed applicants in asserting their rights yet sometimes is useful for applicants, as well as the contents of the administrative The case is related to a kind of seat for bicycles. At issue regulations of prioritized patent examination. before the court are the claim construction, According to the National Enterprise Credit Information the determination of infringement on the doctrine of Publicity System, McDonald's (China) Co., Ltd. had changed At the trademark side, we examined the administrative litigation on review of opposition to trademark “ & DEVICE” over 雄豹狼 equivalents and the calculation of damages, which its name in China to one that reflects the chain’s main logo: “puma” trademark and gave a brief analysis on the judicial data of Beijing IP Court in 2016 in the trademark part. became most critical and difficult for successfully finding “Golden Arches (China) Co. Ltd.”. McDonald’s said that the infringement and getting compensation. A team of attorneys daily business of McDonald’s in China will not be influenced with extensive experience made reasonable arguments and and “the name, the food safety standard and the operation Xiaojun statements in detail and sufficiently in accordance with process of the restaurant will remain the same as usual”. the relevant laws and judicial interpretations, and expounded McDonald’s insider pointed out that the new Chinese name the application of the doctrine of equivalents finding that the of McDonald’s (China) is from the literal translation of accused product fell into the scope of the patent. In addition, “Golden Arch” as each restaurant of McDonald’s has a our attorneys collected favorable evidence for identifying yellow arched construction “M” being called the golden arch. and supporting the calculation of damages. After two court According to the business information data, the name of hearings and submission of written opinions, the efforts of McDonald’s (China)’s investor has been changed from the team yielded fruitful results: the infringing act is ordered McDonald's (China) management Co., Ltd. to Golden to stop and a relatively high compensation is awarded within Arches (China) management Co., Ltd. as early as August 24, the statutory range. 2017. On October 12, the company changed its name to Qualcomm sued Apple for patent infringement Golden Arches (China) Co., Ltd. Before that, McDonald’s by iPhone once announced that it will continue the usage of the expression “New McDonald’s” after the settlement of the Qualcomm Incorporated recently announced that it had filed strategic cooperative delivery with CITIC Ltd. and Carlyle lawsuits with Beijing Intellectual Property Court against Apple Group. for infringement of its patents granted in the past few months, seeking to ban the unlawful manufacture and sale of Most of the branch companies of McDonald's (China) have iPhones in China by Apple. “Apple employs technologies changed their names but there are still some exceptions, such as Shanghai McDonald's catering food co., Ltd. and invented by Qualcomm without paying for them”, said the Wuhan McDonald's catering food Co., LTD, according to spokesman of Qualcomm to Bloomberg News. Qualcomm the National Enterprise Credit Information Publicity System. revealed that the lawsuits are based on three non-standard essential patents covering power management and touch- 62% of Samsung’s patents being announced screen technologies. Apple said they attaches great invalid in the patent war between Huawei and attention to innovation and are willing to pay reasonable and Samsung fair fees for those patented technologies they intend to use. “In our many years of negotiations with Qualcomm, these Recently, new progress has been made in the patent war patents involved have never been discussed”, said Apple between Huawei and Samsung beginning from last year in spokesman. The legal battle between Qualcomm and Apple China. has lasted for months from January when Apple accused On September 30, 2017, the Patent Reexamination Board p. 1 p. 1 Nov. 2017 Editorial Nov. 2017 News

of SIPO (hereinafter referred to as PRB) issued 8 patent invalidation actions were initiated by Huawei. Among the 16 that GPH has the rights and interests to the red can Wong and JDB had made great contribution to the creation, invalidation decisions on the related patents of Samsung, patents on which Samsung filed lawsuits against Huawei, Lo Kat Herbal Tea’s specific packaging and decoration and development and the reputation of the packaging and among which, 5 were announced invalid totally, 1 invalid in only 3 were maintained valid, 2 were announced invalid in the producing and selling of red can Herbal Tea by Wang decoration at issue. Assigning the ownership of the part and 2 valid. part and 10 were announced invalid totally. Laoji Health Industry under the authorization of GPH doesn’t packaging and decoration to either party will cause infringe; JDB producing and selling red can Herbal Tea with unconscionability and probably harm the interests of the By far, 15 out of the total 16 patents on the basis of which Win-win or no-win: JDB and Wang laoji share the packaging printed on one side Chinese characters for public. Therefore, the rights and interests of the packaging Samsung sued Huawei for patent infringement in China have the usage of red can packaging “Wang Laoji” and the other side Chinese characters for and decoration of the red can Herbal Tea shall be mutually got decisions on their validity. 10 patents were announced “jiaduobao or printed on both sides Chinese characters possessed by GPH and the JDB on the premise of invalid totally, accounting for 62.5%. The battle for scrambling for the red can packaging between the plaintiff, appellant, Guangdong JDB Beverage and Food “jiaduobao” infringes the rights of GPH. JDB was ordered to respecting the consumer cognition, abiding by the bona fide The war in China may trace back to May 25, 2016, when Co., Ltd. and the defendants, appellees, Guangzhou Wang stop the infringing behavior and to pay GPH 150 million doctrine and without harming the legal interests of others. Huawei filed lawsuits for patent infringement against RMB plus 260 thousand RMB lawyers’ fees. Laoji Health Industry Co., Ltd. and Guangzhou The exports of the intellectual property royalty Samsung in the United States and China, specifically in the Pharmaceutical Holdings Ltd. (collectively referred to as JDB appealed to the Supreme People’s Court. The Court of China increased by 489.4% for the first 7 District Court for the Northern District of California and the GPH) came to an end on August 17, 2017. The Supreme found the “famous product” of the law in the present case is months Shenzhen Intermediate Court. People’s Court issued its judgement, holding that whereas the “red can Wong Lo Kat Herbal Tea”, the yellow Chinese both GPH and JDB have made great contribution to the On September 7, 2017, the Ministry of Commerce published According to Huawei, they are willing to settle the disputes characters for ‘wang laoji”, the red background and their packaging of the red can of Wong Lo Kat Herbal Tea, the the work progress in commerce areas in its routine press with Samsung on a global scale which involves many combination as a whole constitute the specific packaging two companies can share the interests on the packaging of briefing. It is reported that during the past 7 months, the patents since Samsung illegally used the intellectual property and decoration of red can Wong Lo Kat Herbal Tea. Being the red can of Wong Lo Kat Herbal Tea. total service imports and exports amounts to 2.6529 trillion of Huawei and sold its own products throughout the world. the right holder of the registered trademark “wang laoji”, RMB, a year-on-year growth of 10.6%. Among which, the In response to Huawei’s action, Samsung filed 10 patent On July 6, 2012, GPH and JDB filed a lawsuit respectively, GPH alleged that since the trademark is an integral part of value of exports accounts for 807.72 billion RMB, increasing infringement lawsuits against Huawei. claiming for the rights and interests to the famous product- the packaging and decoration and functions as an identifier 4.4% and the value of imports accounts for 1.8452 trillion specific packaging and decoration of red can Wong Lo Kat of the product source, customers would take it for granted On June 27, 2016, Huawei filed further lawsuits against RMB, increasing 13.5%. The deficit registered 1.0375 trillion Herbal Tea and accusing the other party for illegally that the red can Wong Lo Kat Herbal Tea belongs to the Samsung et al with Quanzhou Intermediate People's Court, RMB. The characteristics presented by the service imports producing and selling the herbal tea product with red can right holder of the trademark “wang laoji”, while the recipe seeking for a compensation of 80.50 million RMB. Less than and exports industry include that the export structure has packaging and decoration. and taste of the tea would not affect customers’ recognition one month later, Samsung sued Huawei with Beijing and judgement of the product. Once being licensee of the been optimized, the imports of some emerging areas Intellectual Property Court on July 22, 2016, seeking for a Guangdong High People’s Court held in the first instance trademark “wang laoji” and the practical operator of red can registered a faster growth, traditional imports and exports compensation of 161 million RMB. Meanwhile, Huawei sued Wong Lo Kat Herbal Tea, JDB argued industries maintain a stable growth and the deficit in service Samsung for patent infringement with Beijing Intellectual that the rights and interests to the imports and exports industries has been narrowed up Property Court. packaging and decoration and the remarkably. Of which, the exports of the intellectual property royalty increased on a year-on-year basis of 489.4%. In the patent war between Huawei and Samsung, totally 16 belonging of the trademark right are two issues and shall be treated patent infringement cases were initiated by Samsung against In the area of emerging industries, during the first 7 months, separately. What consumers like is the Huawei, with 10 cases before the Shenzhen Intermediate the emerging industries in China, except the insurance and red can Wong Lo Kat Herbal Tea Court, 6 before the Beijing Intellectual Property Court. financial industry, maintain a positive growth. Among which, produced by JDB with special recipe, the imports value of telecommunication, computer and In April, 2017, the Quanzhou Intermediate Court made its the packaging and decoration at issue information service industries amounted to 71.79 billion first instance decisions on the lawsuits filed by Huawei was used by JDB and was closely RMB, a year-on-year increase of 74.2% and the imports against Samsung, holding that 22 products of Samsung connected with JDB’s product. value of intellectual property royalty registered 112.58 billion infringed the patent rights of Huawei and that Samsung shall Therefore, the relative rights and RMB, a year-on-year increase of 25.8%. stop manufacturing, selling and offering to sell 22 kinds of interests of the packaging and Galaxy serial cellphones containing the patented decoration belong to JDB. It is reported that last year, the international payment of technologies. Meanwhile, Samsung is ordered to pay a intellectual property royalty of China reached 24 billion US The Supreme People’s Court held that compensation of 80 million RMB and 500 thousand RMB for Dollar and the international payment IPR royalty for the first taking the historical development the reasonable costs to stop infringement. half year of China reached 14.3 billion US Dollar, up 23% process of the red can Wong Lo Kat year-on-year. As mentioned before, on September 30, 2017, the PRB Herbal Tea, the cooperation of the two announced 5 Samsung patents invalid, 1 Samsung patent parties, the consumer cognition and the invalid in part and 2 Samsung patent valid. All of the equity into consideration, both GPH

p. 3 p. 3 Nov. 2017 News Nov. 2017 News

p. 4 p. 4 Nov. 2017 Articles Nov. 2017 Articles

rights directed to key commodities and key channels, and 9. Strengthening the prosecutorial supervision launch joint law enforcement actions with relevant Articles To focus on handling a number of infringement and international organizations and overseas law enforcement counterfeiting crimes with serious circumstances and authorities. (The General Administration of Customs shall serious adverse effects, and strengthen the research and take the lead.) Action plan on protection of IPRs of foreign-invested supervision of key cases and novel cases. To perform 7. Reinforcing safety supervision of delivery link thorough investigations into duty crimes, such as malpractice, corruption and abuse of the law, playing enterprises To proactively promote the construction of "Green Shield" favoritism and committing irregularities, behind the project for safety supervision of the delivery channels, infringement and counterfeiting criminal cases. (The In order to implement the Notice on a Number of Measures export, to carry out in-depth the “Thunder” special action on strengthen market supervision and law enforcement Supreme People's Procuratorate shall take the lead.) on the Promotion of Foreign Investment Growth issued by enforcement of law and protection of rights related to inspection, and urge enterprises to strictly enforce the three the State Council, construct a market environment with fair patents, bring 12330, the platform of offence-reporting, regulations of “acceptance inspection, real-name 10. Strengthening the judiciary judgement competition and an excellent investment environment, further complaining and assistance of the protection of rights, into acceptance, and security check by passing through the To strengthen the judgement work of civil, criminal and promote foreign investment growth, improve the quality of full play, precisely and quickly combat infringements of screening machines” for safety management of delivery administrative cases in key industries and key areas of utilization of foreign investment, crack down on violations patent rights and counterfeiting of patent rights of foreign- channels, and highlight the enhancement of delivery safety infringement and counterfeiting according to the laws, and against the intellectual property rights of foreign-invested invested enterprises, and steadily increase the combating management of overseas online shopping products in e- strengthen the supervision and guidance. (The Supreme enterprises, and protect the legitimate rights and interests of momentum. (The State Intellectual Property Office shall take business. (The State Post Bureau shall take the lead.) People's Court shall take the lead.) foreign-invested enterprises, the present action plan is the lead.) 8. Cracking down on infringement and counterfeiting formulated. 11. Strengthening the external publicity work 4. Fighting against internet piracy and other copyright crimes I. Missions violations In multilateral and bilateral intellectual property cooperation To foster a comprehensive anti-counterfeiting by information and negotiations, to actively publicize the work deployment 1. Fighting against infringements of trade secrets To seriously investigate and prosecute acts of piracy and directing investigation, improve the initiation and organization and implementation as well as the results achieved related to focus on investigating a number of major and significant mode of the cluster campaign as well as "integration" To enhance the administrative protection of trade secrets, the action plan, and establish a good image of China's IPR cases. To strengthen the governance of internet piracy, carry combating mechanism, strengthen the offensive of the crack down on infringements of trade secrets, and carry out protection. (The Ministry of Commerce shall take the lead.) out the “Sword Net 2017” special action, and further cluster campaign, and perform a full-chain fight against judgements on the cases of infringing trade secrets in enhance the efforts in copyright regulation in the areas of infringement and counterfeiting crimes. (The Ministry of II. Time Schedule accordance with the laws, so as to effectively protect the internet videos, music, software, animations, and teaching Public Security shall take the lead.) interests of the right holders. (The State Administration for materials and in the platforms of e-commerce, software Industry & Commerce and the Supreme People's Court shall application stores. To deepen the promotion of software be responsible respectively according to their functions.) legalization. (The State Administration of Press, Publication, 2. Fighting against infringements of trademark rights, such Radio, Film and Television shall take the lead.) as Free-riding 5. Fighting against infringements of new plant variety To enhance the efforts in protecting the well-known rights trademarks, geographical indications and foreign-related To organize and carry out the fight against the production trademarks, investigate and prosecute violations such as and sale of infringed and counterfeited seeds and sprouts, trademark squatting and free-riding, and order a crackdown and continue in performing actions of administrative law on major copyright piracy. To strengthen supervision of e- enforcement in combating the infringements of new plant market, focus on combating violations such as counterfeiting variety rights in agriculture and forestry. (The Ministry of and false advertising, and improve the level of collaborative Agriculture and the State Forestry Administration shall be networks. (The State Administration for Industry & responsible respectively according to their functions.) Commerce shall take the lead.) 6. Cracking down on import and export of goods 3. Fighting against infringements of patent rights infringing intellectual property rights Directed to key areas such as e-commerce, food and drug, To further improve the mechanism of law enforcement of environmental protection, safe production and high intellectual property rights at customs, continue to carry out technology and key links such as exhibition and import and special actions of customs protection of intellectual property p. 5 p. 5 Nov. 2017 Articles Nov. 2017 Articles

1. Mobilization and deployment 2. Closely cohering and cooperating Patent infringement in China: finding the source Prior to September 10, 2017, the action plan is to be issued All member units concerned are to enhance the cross- so as to perform mobilization and deployment, put forward department and cross-regional cooperation, improve the the mission requirements and make clear the division of cooperation mechanism, do a good job in clue circulation, By Yuanyuan Tian (Ms.) responsibilities. All localities and all member units concerned evidence transfer, assistance in investigation of case, joint are to study a refined implementation scheme in accordance law enforcement, strengthen the linkage of administrative Article 70 of the Chinese Patent Law, which came into effect with the action plan and formulate specific implementation law enforcement and criminal justice, and further enhance on October 1, 2009, reads: “Any person who, for production measures. the joint efforts in the supervision and regulation of law and business purpose uses, offers to sell or sells a patent- enforcement. infringing product without knowing that it was made and 2. Organization and implementation sold without the authorisation of the patentee, shall not be 3. Increasing the case handling efficiency liable to compensate for the damage of the patentee if he During September to December of 2017, all localities and all can prove that he obtained the product from a legitimate member units concerned are to carry out an intensive action Relevant law-enforcing and judicial departments are to channel.” and severely investigate and prosecute criminal violations smooth reporting channels for offence-reporting and against intellectual property rights of foreign-invested complaining and make public the telephone number for Article 25 of the Interpretation (II) of the Supreme People’s enterprises, and timely expose a group of typical cases, offence-reporting and complaining. Related cases are to be Court on Patent Infringement Disputes, which came into thereby forming a strong deterrent. Developments of accepted in time and handled quickly according to the laws, effect on April 1, 2016, clarifies that: significant cases are to be timely reported to the Office of the and a number of major and significant cases of very high National Leading Group on the Fight against IPR concern and with serious adverse effects are to be handled “Where a party uses, offers for sale, or sells infringing Infringement and Counterfeiting. intensively, so as to further enhance the level of protection of products which have been manufactured and sold without intellectual property rights of foreign-invested enterprises. the authorisation of the patent holder, not being aware of this 3. Summarization of experiences and lessons and for production and business purposes and proves the legitimate source of the products with evidence, shall be Prior to December 31, 2017, all localities and all member supported by the People’s Court if the patent holder units concerned are to make a comprehensive requests the party to stop the acts of use, offer for sale or summarization of this action and submit a special action sale, with the exception that the user of the allegedly report to the Office of the National Leading Group on the infringing products can prove he had paid a reasonable Fight against IPR Infringement and Counterfeiting. The Office amount for the products. of the National Leading Group on the Fight against IPR Infringement and Counterfeiting is to summarize and ‘Not being aware’ refers to actually not being aware and promote good experiences and practices as it regards should not be aware. appropriate. for sale and/or selling an infringing product from a legitimate The ‘legitimate source’ refers to the situation that the source with no knowledge that his acts constitute patent III. Work requirements products were obtained through normal means of business infringement is not liable for damages but should stop the including legitimate sales channels, normal sales contracts, infringement acts; and (ii) a person who infringes a patent by 1. Enhancing organization and leadership etc. Regarding the legitimate source, the user, the party using an infringing product from a legitimate source with no All localities and all member units concerned are to be fully offering for sale, or the seller should provide relevant knowledge that his act constitutes patent infringement is not aware of the important significance of improving the work of evidence in conformity with the trading habits. ” liable for damages and may continue to use the accused protection of intellectual property rights of foreign-invested product. “Not being aware” is opposite to “actually know”. “Should enterprises, enhance organization and leadership, not be aware” refers to a presumption of awareness of implement work responsibilities, strengthen guidance and The source of infringement infringement based on evidence. In practice, it usually inspection, and do well in publicity and guidance. Leading requires a patentee to prove that an opposing party actually In Sun Junyi v Zheng Ning (2014), the Chinese Supreme Group Offices at all levels are to strengthen coordination, knows about the infringement. For example, if the party has Court elaborated on the intention of the legitimate source and timely supervise and inspect the implementation. All received a notice from a patentee, or been given an defense and held that “the legitimate source defense is localities and all departments concerned are to earnestly administration punishment, or even filed an invalidation prescribed in article 70 of the Patent Law in order to carry out special statistics and submit a progress report of request against the patent, it proves that the party actually maintain the normal order of the market and to encourage investigation of the cases and related work during the knew this. the fight against the source of infringement”. preceding month prior to the 15th of each month. To summarize: (i) a person who infringes a patent by offering Obviously, the legislators believe that tracing the source of p. 7 p. 7 Nov. 2017 Articles Nov. 2017 Articles

the infringing product is very important to restrain royalties which are calculated based on, for example, the infringement. And in practice, investigating the act of making licensing fee minus the damage remedy from the machine The ins and outs of reconsideration the infringing product is rather difficult compared to the acts maker to avoid double rewards. The innocent party held of offering for sale or selling. The legitimate defense liable for the reasonable royalties may have a contractual By Xiaojun Guo encourages the defendant to confess to the maker of the cause of action for breach of warranty to get some infringing products. protection. In patent prosecution, reexamination or invalidation is not satisfied with a reexamination decision or a party is not proceedings, the State Intellectual Property Office of China satisfied with an invalidation decision, it can only appeal The above provisions, however, might dramatically reduce In summary, the courts should be cautious and take a “total (SIPO) or the Patent Reexamination Board (PRB) undertakes against the decision to the court. the value of a patent in some instances. For example: a circumstance” consideration in applying the legitimate examinations and informs the applicant, petitioner or patent claims a special machine for manufacturing a source defense in practice, especially the consequence of Although various decisions in relation to patent applications patentee of its decisions (in essence “specific administrative disposable package. The patentee operates in the markets granting a total exemption from the liability of infringement or patents can be subject to administrative reconsideration, acts”) by various notifications in different phases. for the machine and for the packages. The patentee sold act of use under the legitimate source defense, although such proceedings were not prevalent in the past. Only in only three such machines in China. The patentee uses its there is no literal exception to the defense prescribed in the Against those decisions, unless otherwise specified by the recent years has there been a rapid growth of the cases. In machines to manufacture the packages and its profit mainly articles. laws or regulations, the applicant may either initiate legal 2016, SIPO received 165 administration reconsideration relies on the selling of the packages. A party buys several proceedings before the Beijing Intellectual Property Court or cases, an increase of 129% over 2015. (published on WIPR September/October issue, 2017) infringing machines from an infringer through a normal file a request for administrative reconsideration with SIPO. Most of the administrative reconsideration cases concern channel and uses them to manufacture the packages. Some decisions, such as rejection decisions of SIPO, procedural matters, although they may involve substantive If the party is sued by the patentee for infringement, it could reexamination decisions and invalidation decisions of the matters, such as rejection of a priority claim because the assert the legitimate defense against the patentee to PRB, are not subject to administrative reconsideration. If an later and the prior applications relate to different subject continue to use the accused machines. The damages applicant is not satisfied with a rejection decision, it can only matter. collected from the manufacturer of the machines are file a request for reexamination with the PRB. If an applicant Case studies generally calculated from the sale price of the machines. It normally will not cover the losses caused by continuous use In an administrative reconsideration case, two consecutive of the machines by the party, because the market share of numerals of the priority number were wrongly transposed. the patentee’s packages may be significantly reduced and SIPO rejected the priory claim and the decision was affirmed the patentee may suffer substantial profit losses on the sale in the administrative reconsideration proceedings. of the packages. Another administrative reconsideration case involved the In this circumstance, denying the patentee a damage priority claim of a Chinese design application to a prior US remedy from the party would undermine the value of the design application, which was denied because part of the patent monopoly and lead to unjust enrichment of the party. broken lines in the prior application were amended into solid In an extremely serious circumstance, the party might lines to show an entire product. The decision of the design instruct the manufacturer to commit a contributory division was affirmed during the administrative infringement in order to seize the market for the packages. It reconsideration proceedings and SIPO held that the subject is usually very difficult for the patentee to obtain adequate matter in the two applications was different. evidence for prepared contributory infringement. The awarded damages from the machine maker cannot In another administrative reconsideration case, the applicant compensate the losses of the patentee in this case. requested SIPO to cancel the previous decision of an examination division that its divisional application was In the above example, the total exemption from patent deemed not to have been filed. The applicant said the infringement liability of the user of the accused opinions of the examiner on the unity of the claims were manufacturing machine is quite arguable. There may be a raised in the rejection decision and did constitute effective compromise. In 2005 the Guangdong Higher People’s Court opinions for filing a divisional application. SIPO refused the mediated two parties in a patent infringement dispute to request and made a decision of administrative reach a settlement that the defendant continues to use the reconsideration affirming its previous decision. infringing products by paying reasonable royalties. Likewise, the financial interests of the patentee in the above example The administrative reconsideration proceedings are may be adequately protected by awarding reasonable conducted within SIPO, but by the division of legal affairs—a p. 9 p. 9 Nov. 2017 Articles Nov. 2017 Articles

separate division from the examination divisions. In spite of this, the examiners handling reconsideration matters and the New development of patent infringement compensation in examiners in charge of examinations are normally trained in China the same system, they share information within SIPO, and some examiners of the division of legal affairs are from the By Chuanliang Lu PRB or the examination divisions.

It is not surprising therefore that the examiners of the division of legal affairs are inclined to sustain decisions made by the examination divisions or the PRB in administrative reconsideration proceedings.

The time to ﬁle

When should someone consider ﬁling a request for administrative reconsideration instead of initiating legal proceedings right away?

A decision issued by examination divisions is normally made by one examiner. In administrative reconsideration proceedings, however, the applicant can normally rely on a panel of three experienced examiners and can even ask for a face-to-face meeting with them. The applicant may sometimes get constructive input from those experienced examiners, although the examiners are obliged to follow the provisions of the Patent Examination Guidelines strictly.

A request for administrative reconsideration shall be filed within 60 days of a decision of the examination divisions; this time limit is the same as that for initiating legal proceedings. However, the administrative reconsideration proceedings are much more flexible and easier than legal proceedings. For example, the power of attorney doesn’t need to be notarised I. Attention received for low patent infringement infringement compensation and legalised, and the evidence doesn’t need to be compensation prepared as strictly as in legal proceedings. Provisions for patent infringement compensation are set In recent years, China's intellectual property legislation has forth in Article 65 in the latest amendments to the patent law The administrative reconsideration proceedings are free of been continuously improved, and protection of intellectual (draft). On the basis of the initial provisions, a punitive official fees. SIPO shall normally make a decision of property rights has been constantly strengthened, which is compensation system for intentional patent infringement is administrative reconsideration within 60 days. Upon particularly evident in patenting system that is most closely introduced. It is provided in Article 65 of the draft receiving the decision, the applicant may initiate legal related to national policy for the promotion of innovation. At amendments that, "for the intentional Patent Infringement, proceedings within 15 days. Counting from the previous the legislative level, the State Intellectual Property Office of the people's court may, according to such factors as the decision of the examination divisions, it offers the applicant China is promoting the fourth revision of the Patent Law of circumstances, scale and consequence of the infringement, an additional 75 days to get ready for a possible the People's Republic of China. At the judicial level, the the amount of compensation determined according to the administrative litigation. Supreme People's Court issued two judicial interpretations previous two paragraphs shall be increased to two to three Alternatively, the applicant may appeal against a decision of of patent infringement disputes in 2015 and 2016 times". The punitive compensation to intentional administrative reconsideration with the State Council to respectively and related judicial guidance documents in infringement will serve as a further deterrent to such acts of obtain a final decision. However, this less occurs in practice. response to the long-standing issue of "low compensation" intentional infringement as repeated infringement or the like. in patent litigation. (Published on WIPR ) In the "Regulations on the Application of Law in the Trial of II. Changes in legal norms for patent Patent Dispute Cases" promulgated by the Supreme p. 11 p. 11 Nov. 2017 Articles Nov. 2017 Articles

The time to ﬁle

When should someone consider ﬁling a request for administrative reconsideration instead of initiating legal proceedings right away?

People's Court of the People's Republic of China in 2015, patentee is also increased year on year. The average fee shall be referred to; (4) statutory compensation 600,000 sets. Thus, the court ruled on this basis that the limitation over the amount of statutory compensation for percentages in 2015, 2016 and the first half of 2017 are (RMB10,000-1,000,000). In judicial practice, the losses defendant shall pay an amount of compensation of RMB2 patent infringement is deleted, and “generally from 44.6%, 57.6% and 87.7%, respectively. In terms of the suffered by the patentee in the first consecutive place are million. RMB5,000 to RMB300,000，with a maximum not amount of compensation, the average amount of often difficult to prove and rarely used. Submission of V. Conclusion exceeding RMB500,000" in the initial provisions of compensation obtained by patentees from abroad or from evidence of the profits of the infringer obtained from the determining the amount of compensation was amended to Hong Kong, Macao and Taiwan is RMB1,022,000, infringement in the second consecutive place is usually China's patent infringement compensation system is "determining the amount of compensation in accordance significantly more than the average amount of compensation necessary for obtaining a large amount of compensation. A gradually established. Patent infringement costs increase with the provisions of Paragraph 2 of Article 65 of the Patent of RMB757,000 obtained by patentees from the mainland reasonable multiple of patent license fee in the third year by year. Costs for safeguarding the patent rights are Law on the basis of such factors as the type of patent right, China over the same period (Data Source: Beijing Intellectual consecutive place is not commonly seen in judicial practice. decreased. In the judicial practice, the patentee attaches the nature and circumstances of the infringement". Property Court official WeChat "Intellectual Property Where the specific amounts in the preceding three importance to provide evidence to the infringement, but Beijing"). consecutive places cannot be proved according to the ignores provision of evidence for the infringement The "Interpretation (II) on a number of Issues Regarding the evidences of the case, the court may apply the statutory compensation, which leads to the application of the Application of Law in the Trial of Patent Infringement Cases" IV. Statutory compensation is still the compensation according to the circumstances of the case. If statutory compensation when the judge makes a judgment, promulgated by the Supreme People's Court in 2016 mainstream in judicial practice, but the number the evidences provided by the parties concerned or the i.e., ruling an amount of compensation from RMB10000 to provides solution for difficult proof in patent infringement of cases exceeding the amount of statutory evidences collected in investigation can prove that the RMB1,000,000, by considering comprehensively such litigation as well as for low compensation. Article 27 of this compensation is gradually increased applicable statutory compensation is obviously unfair, an factors as the type of patent right, the infringing judicial interpretation makes some improvement to the rules amount may be ruled by breaking the upper limit of the circumstances and the infringing duration. However, of proof for the amount of compensation in patent According to the provisions of the Chinese Patent Law, the statutory compensation. regarding such cases for which the exact amount of losses infringement litigation. According to the preliminary proof of amount of patent infringement compensation shall be or profits from the infringement is difficult to be proved, in the patentee and the relevant evidence possessed by the calculated by using the following methods, and these Evidence is obtained by preservation of evidence for the order to break the amount of statutory compensation, the infringer, the burden of proof on profits obtained by the methods are in an applicable consecutive sequence as the profits obtained by the alleged infringer. In the patent patentee may submit evidence to prove that the applied infringer is assigned to the infringer, and this shall be in line following: (1) the losses suffered by patentee due to infringement case of Zhengtai Company v. Schneider statuary compensation is obviously unfair, in which case, the with the order of calculation of the amount of compensation infringement; (2)the profits obtained by the infringer from the Electric Low Voltage (Tianjin) Co., Ltd., Wenzhou City court may synthesize all the evidences of the case, so as to provided in Article 65 of the Patent Law. infringement; (3) a reasonable multiple of the patent license Intermediate People's Court of Zhejiang Province, determine an appropriate amount of compensation over the determines a profit of RMB355 million obtained from the limit of the statuary compensation. Where it is impossible to It is particularly indicated in the Outline of China's infringement by calculating an average operating profit of obtain evidence for the infringement of the defendant, on the Intellectual Property Protection (2016-2020) issued by the Schneider according to the financial material from the basis of submission of preliminary evidence to prove that the Supreme People's Court in 2017 that, a scientific and industrial and commercial administration and tax infringer obtains far more profits than the statuary rational intellectual property infringement compensation department, by preserving as evidence, sales documents of compensation, the patentee may request the court to collect system shall be established, and a compensation system the allegedly infringing products. compatible with the value of the intellectual property shall evidence for the profits obtained by the defendant from the be established, taking into consideration of the loss of the Sales data for publicity on websites or other media, sales infringement by making investigation as entitled. If the patentee, the profit obtained by the infringer, the license data from E-business platforms can be used as the infringer refuses to provide the evidence, it or he shall bear fee, the statutory compensation and costs in safeguarding preliminary basis for the amount of infringing sales. The unfavorable legal consequences. The system of punitive the rights and interests. industry's average profit margins can be used as the profit compensation for intentional infringement is currently only margins of the accused product. The alleged infringer’s embodied in the draft legislation of the patent law, it still III. Continuously increased amount of patent turnover for publicity can also be used as the preliminary needs to be observed whether or not it can become a infringement compensation in judicial practice evidence of the profits obtained from the infringement. formal legal provision. Submission of these evidences are conducive to the judge By making a statistical analysis on the winning cases in to rule an amount of compensation within or beyond the patent infringement litigation in the past three years, it is amount of statutory compensation. In the patent found that the amount of compensation obtained by the infringement cases such as Stricker v. Fada, the court ruled patentees has shown a significant rising trend. The average that the defendant's financial account and so on shall be amounts of compensation ruled in 2015, 2016 and the first preserved as evidences, but the defendant refused to half of 2017 are RMB350,000, RMB1,024,000 and perform the ruling. However, the patentee submitted RMB1,103,000, respectively. evidence to prove that the defendant’s website proclaims an The percentage of the amount of compensation ruled by annual turnover of the infringing product of RMB50 Million to the court to the amount of compensation claimed by the 100 million, and a monthly output of the infringing product of p. 13 p. 13 Nov. 2017 Articles Nov. 2017 Articles

Prior art refers to the definition Introduction to the administrative regulations of prioritized in Article 22, para 5 of the patent examination Chinese Patent Law, i.e. any technology known to the public By Qi Liu (Ms.) before the date of filing in China or abroad; procedures measures up one of the six situations as below, In order to enrich and develop the situations for using the Prior design refers to the it would be qualified to request the prioritized examination: prioritized patent examination system, further shorten the definition in Article 23, para 4 of examination cycle, improve the efficiency, as well as boost It involves the national key development industries, including the Chinese Patent Law, i.e. any up Chinese economy, the Chinese Patent Office released but not limited to energy conservation and environment design known to the public the “Administrative Regulations of Prioritized Patent protection, new generation of information technology, before the date of filing in China Examination” (hereafter referred to as “New Regulations”), biotech, High-end Equipment Manufacturing, new energy, or abroad; which came into effect as of August1, 2017. The old new materials, new energy vehicles, intelligent The applicant should focus on Regulations, in effective since August 1, 2012, have been manufacturing; annulled at the same time. the prior arts or prior designs It involves the key development industries of which is that are mostly relevant to the The Release of the New Regulations will definitely be good encouraged by the provincial governments and prefecture- Chinese patent application, and news to all the patent applicants. What kinds of cases can level city government; with the ideas that the apply the New Regulations, what kinds of documents need documents are to facilitate the It involves the fields of technologies relating to internet, big to be submitted, and how is the examination conducted? From the above rules , it is clear that the scope of the examiner to accelerate the examination; With all the questions, Let’s probe into this New data, cloud computing and that technologies or products applicable applications/patents has extended to all kinds of Regulations. evolve rapidly; patent applications/patents and almost covers the Patent documentation with only the documentation serial substantial procedures for a Chinese patent application in its numbers and published date, indicating the relevant The patent applicant or the applicant requesting re- 1. What kinds of Chinese patent applications/ whole lifespan. In comparison, the required documents in paragraph or picture numbers are sufficient; examination gets everything ready to implement or has patents can apply the prioritized examination the New Regulations are much more simplified and feasible already started to implement, or has shown that a third party As for the non-patent documentation, such as magazines or for preparation. A. The scope of the applicable Chinese patent is implementing its invention-creation; books, it is suggested providing the full pages or the relevant applications 2. What documents need to be submitted for pages. It should be the first filing in China and be claimed as the The New Regulations have expanded the scope of the priority for the filing a patent application in another country or the prioritized examination? C. Other relevant supporting documents, which refer to applicable Chinese patent applications and regulate four region on the same subject matter; A. The request form the documents that would prove that the case falls into kinds as below, for which the prioritized patent examination one of the situations described in rule 3 or 4 in the New For a invalidation case which also involves a patent can be applied: The request form for a Chinese patent application in Regulations infringement case, the parties in action have already substantial examination is different from the one for a Chinese patent application for invention during the requested the local patent department to settle, or submit Chinese patent application in re-examination and invalidation An introduction made by the applicant, explaining that the substantial examination procedures (the only situation in the the case to the court, or request the Arbitration mediation procedures; technologies in the Chinese patent applications belongs to Old Regulations); organization for arbitration and mediation; the key industries, the technologies or the products For two Chinese patent applications filed on the same day regulated in Rule 3; Chinese patent applications for utility model and design; Other situations that has significant interests for China and for the same subject matter (in accordance to Article 9, the public, and therefore need to be examined as a priority. The copy of Certificate that could attest the technologies in Chinese patent applications for invention, utility model and Chinese Patent Law), if the patent application for invention the Chinese patent applications belongs to the key design during the Re-examination procedures; C. The filing methods of the applicable Chinese patent requests the prioritized examination, the Chinese application development industries of which is encouraged by the applications number for the same-day-filing application for utility model is Chinese patents for invention, utility model and design necessary to be filled in the request form. provincial governments and prefecture-level city during the Invalidation procedures. The Chinese patent application or the patent application in government; re-examination should be an E-filing case; B. Prior art and prior design B. The scope of the applicable situations (Rule 3 and 4) The product photos, the product catalog, the product The Chinese patent in invalidation procedures can be either It is the only necessary document for a Chinese patent manual etc. that would prove the applicant has already The New Regulations have broadened the applicable an E-filing case or a paper filing case, but E-filing is application in substantial examination to request prioritized prepared to implement the Chinese patent case; conditions and regulate that, if a Chinese patent application preferred. examination; or a Chinese patent application in re-examination The sale contract, the supply agreement, the purchase p. 15 p. 15 Nov. 2017 Articles Nov. 2017 Articles

invoices and other documents that would prove the trade For a Chinese application for invention: after entry into the the notification date; After the request for prioritized examination is accepted, the and sale of the products, in order to prove that the applicant substantial examination procedures; applicant requesting the invalidation submits supplementary For a Chinese patent application for utility model or design: a has already started to implement the Chinese patent case or grounds and evidence; For a patent application for utility model or design: after filing notification or office action should be responded with 15 there would be potential infringement upon the Chinese the new application and the full payment of the filing fees; days; After the request for prioritized examination is accepted, the patent case; patentee makes amendments of the claims instead of For a Chinese patent application/patent in re-examination When responding the notification or office action, the The Official Filing Receipts of other national or regional deletion. procedures or invalidation procedures: after the request for applicant cannot use the postal days. filings, that would prove the first-filing Chinese patent case is re-examination or invalidation and the full payment of the The re-examination procedures or the invalidation claimed as the priority for other national or regional filings. In For a Chinese patent application in re-examination requesting fees, and before a decision is made. procedures is suspended; case that the first-filing Chinese patent applications is procedures or a Chinese patent in invalidation procedures, claimed as the priority for the PCT application, the PCT B. Acceptance by the Chinese Patent Office the term for response is as same as an ordinary application/ The procedures for re-examination or invalidation rely on the application number in the request forms is sufficient. patent. conclusions of other cases; For Chinese patent applications: after receiving the Request D. Recommendations for prioritized examination as well as the documents in Bearing in mind the prioritized examination can not Difficult cases, which is approved by the Director of the Re- support, it will take about 3 – 5 working days for the Chinese guarantee your safety in the examination as the New examination Board. The request form should be also executed by the local Patent Office to issue the Notifications about whether the Regulations also regulate the situations where the Chinese Patent Office or the related State Departments for The New Regulations mentioned above reveals the Request is accepted or not; Patent Office can terminate the prioritized examination and recommendation; substantial efforts made by the Chinese Patent Office to convert the procedures to the standard ones. For Chinese patent applications/patents in re-examination speed up the examination procedures and to invigorate the The related State Departments refer to the state procedures or invalidation procedures: the Chinese Patent 4. Termination of the prioritized examination patent applications and enforcement, which, undoubtedly, is departments in charge of technology, economy and Office will examine the Request as well as the documents in exciting news for the most qualified Chinese individuals and industry, as well as the member of the state intellectual A. For a Chinese patent application, if one of the four support and send the Notifications about whether the entities. However, it is well worthy of our notice that the New property strategy mediation associates (established in 2016, situations as below arises, the Chinese Patent Office can request is accepted or not as soon as possible. Regulations have excluded the foreign applicants. with 28 government departments, and based in Chinese terminate the prioritized examination, and use the ordinary Patent Office; C. The terms and procedures procedure to continue the examination. The Chinese It is the Recommendation that is difficult for the foreign Patent Office will inform the applicant of the termination applicants to obtain to validate their qualification. While, Three exceptional situations: the first-filing Chinese patent For a Chinese patent application for invention: the first office as soon as possible since the New Regulations clearly indicate one exception for application, the patent application in re-examination which action will be issued within 45 days from the date of Official submitting the Recommendation, i.e. the first-filing Chinese the request for prioritized examination has been once made Receipt of the Request for prioritized examination, and the After the request for prioritized examination is accepted, the patent applications, the foreign entities would feel free to during the substantial examination procedures; the final decision to grant or rejection will be made within one applicant makes voluntary amendments under the request the prioritized examination, given that they have their prioritized examination is requested by the local Chinese year; Implementing Regulations, Rule 51, para 1 and 2; creation-invention or designs firstly filed in China and claim Patent Office, the courts or the Arbitration mediation the first-filing Chinese patent application to other countries organization. For a Chinese patent application for utility model or design, The response to a notification or office action is overdue or the final decision on grant or rejection will be made within 2 extended; or regions. E. In case of the joint applicants, the request for the months from the date of Official Receipt of the Request for The documents filed in support of the Request for the On the other hand, a Chinese patent application/patent prioritized examination should be consented by all the co- prioritized examination; jointly owned by both a Chinese and a foreign entity shall applicants prioritized examination are found as false or fake, and in bad For a Chinese patent application in re-examination faith; also enjoy the prioritized examination, so that all the For the Chinese joint applicants, the signature on the procedures: the final decision to withdraw or withhold the sufficient documents for requesting the prioritized The patent application is found abnormal during the request form is sufficient; Rejection Decision will be made within 7 months from the examination can be in good preparation by the Chinese co- examination procedures. Official Receipt of the Request for prioritized examination; owner. In practice, foreign applicants with Chinese In case that one of the co-applicants, or all the co-applicants subsidiaries or affiliates, given that their Chinese are foreign applicants, the Consent Declaration signed B. For a Chinese patent application/patent in re- For a Chinese patent for invention or utility model: the case applications/patents belong to the applicable situations, may thereby is necessary. examination procedures or invalidation procedures, if one will be closed within 5 months, and for a Chinese design take this measure to accelerate the examination. of the six situations as below arises, the Chinese Patent patent, it will be within 4 months from the Official Receipt of Having had the applicable applications/patents and the Office can terminate the prioritized examination, and take the Request for prioritized examination. As the New Regulations are beneficial for both domestic and supporting documents, the procedures to initiate the the ordinary procedure to continue the examination. The foreign applicants, we can take it for granted that the request for prioritized examination are as follows. D. Time for response Chinese Patent Office will inform the applicant of the Chinese Patent Office will receive more requests in this termination as soon as possible 3. Procedures For a Chinese patent application for invention: a notification regard from August 1, 2017 and the examination in China will develop at full speed. or office action should be responded within 2 months from The response to the notification is delayed; A. Timing p. 17 p. 17 Nov. 2017 Articles Nov. 2017 Articles

basis mark and the goods of two marks were the same or broader. Administrative litigation on review of opposition to similar, the business goodwill of the basis mark could Based on the above analysis, the court of second instance certainly be extended to the opposed mark; thus the trademark “ & DEVICE” has ruled, Xiongbaolang Co., Ltd. made the opposed mark 雄豹狼 coexistence of the opposed mark and the cited marks on more and more similar to the cited marks by changing the the same or similar goods would not be likely to cause By Chengyan Zhao (Ms.) prior marks’ sign and extending its designated goods. These confusions among consumers as of the origin of goods. The changes increase the possibilities of confusion among court of second instance ruled that the registrant held etc." in class 25. It is valid for protection in China now. common consumers. Thus, the court of second instance I. Case introduction independent trademark rights on their different trademark does not approve the conclusion of the court of first Cited mark 2: registrations. There was no certain extended relationship Case number of the first instance: (2014) Yi Zhong Xing (Zhi) instance that the opposed mark is an extended application between the prior mark and the later mark. The changes Chu Zi No. 6182 of the prior mark based on its business goodwill. The basic registration of this mark made by Xiongbaolang Co., Ltd. to the prior mark increased is in Germany, with the registration Case number of the second instance: (2016) Jing Xing the possibility of confusion among common consumers, As the representative of Puma Se, the writer has the date of September 19, 1990. The Zhong Zi No. 3250 which could not be deemed as justified. Therefore, the following further thoughts: designated goods are "clothing, decisions of the TRAB and of the original trial were incorrect Appellant (plaintiff in the original trial): Puma Se footwear, headgear and etc." in in law application, which should be cancelled by law. When the so-called "basis mark" No. 736710 was filed for Appellee (defendant in the original trial): Trademark Review class 25. It is valid for protection in application, Puma Se lodged opposition and review on III. Analysis and further thoughts and Adjudication Board of the State Administration for China now. opposition to it. However, at that time, a) TRAB’s decision Industry & Commerce of the People’s Republic of China was final, which was not submitted to judicial review, b) The opposed mark: The decision of the court of second instance clearly Puma’s goods in China were mainly footwear, and c) indicates: the key issue to consider in determining whether Third party: Shishi City Xiongbaolang Garment Development clothing and footwear were strictly considered as dissimilar; The application date is September 5, 2002, with the the later trademark application of the same registrant is an Co., Ltd. so this mark was approved for registration on "clothing". To designated goods of extended application of the prior registration is, whether the those "edge ball" trademark registrations caused by Puma Se lodged opposition and review of opposition to the "clothing; layettes; prior trademark registration has gained certain fame through swimsuits; water-proof historically reasons, we suggest the client trying best to keep trademark "雄豹狼&DEVICE" No. 3297579 (hereinafter use, which therefore leads the relevant public to connect the clothing; football shoes; them in the scope of the already registered signs and goods. referred as "the opposed mark") of Shishi City Xiongbaolang later-filed identical or similar trademark application with the shoes; hats; hosieries; If their registrants make them more and more similar to the Garment Development Co., Ltd. (hereinafter referred as prior trademark registration and to believe the goods bearing gloves (clothing); neckties; belts (clothing)" in class 25. clients’ marks by amending the sign and the goods, we "Xiongbaolang Co., Ltd.") based on their trademark "PUMA the two marks come from the same trademark registrant or would suggest clients firmly cracking down on such & DEVICE" IR No. 582886 ("the cited mark 1") and have certain relationships. The basis mark: activities. trademark "DEVICE" IR No. 593987 ("the cited mark 2"). The When examining the business goodwill extension of the prior Trademark Review and Adjudication Board ("TRAB") ruled The application date is September Nowadays, there are some entities and individuals who try to trademark registration, the court of second instance has that the opposed mark and the two cited marks did not 1, 1993, and the registration date copycat others’ famous marks "step by step": filing an mainly considered the following factors: constitute similar marks in respect of similar goods, so the is March 21, 1995. The application which is not very similar to the target mark first, opposed mark was approved for registration. The court of designated goods are "clothing" in The time of application of the basis mark’s and of the cited with the goods closely related but not the same or similar, first instance overruled the claim of Puma Se mainly because class 25. It is a valid registration marks’: the filing date of the basis mark of Xiongbaolang then subsequently filing several amended applications with of the trademark No. 736710 ("the basis mark") owned by now. Co., Ltd. is later than that of the two cited marks of Puma slightly different signs and broader goods description; the Xiongbaolang Co., Ltd. The court of second instance did not later marks are more and more similar to the famous mark, Puma Se submitted many evidential materials to prove the Se; approve the conclusion of the court of first instance that the and finally the aim of copycat is accomplished. fame of the cited marks, and asked to get the cited marks The use evidences and fame of the two parties’ marks: from opposed mark was the extension of the business goodwill of recognized as well-known trademarks in China. the use evidences, it can hardly be determined that the In this particular case, the court of second instance has the prior trademark. The decisions of the original trial and of Xiongbaolang Co., Ltd. submitted some certificates of basis mark is obviously more famous than the two cited mainly analyzed four factors. The writer believes that the four the TRAB were cancelled by the court of second instance. awards of the basis mark. marks; factors are serving the same key issue, namely, whether "it II. Main facts and decisions: increases the possibility of confusion among common The TRAB ruled that the opposed mark and the cited marks The comparison between the prior mark and the later mark: consumers". In other cases, the factors being considered The cited mark 1: had coexisted and formed a relatively stable market order. comparing to the basis mark, the opposed mark is more could be more or less. However, as long as the application The court of first instance ruled that the basis mark had similar to the cited marks; of the later mark would increase the possibilities of confusion The basic registration of this mark is in gained certain fame through use and there was no evidence among common consumers, it should not be approved for Germany, with the registration date of to prove that the coexistence of the opposed mark and the The comparison between the goods of the prior mark and of registration by simply adopting the theory of extended June 3, 1991. The designated goods cited marks had caused any confusing or misleading results; the later mark: the basis mark is only approved on business goodwill of the basis mark. are "clothing, footwear, headgear and as the opposed mark was identical to the device part of the "clothing", and the goods covered by the opposed mark are p. 19 p. 19 Nov. 2017 Articles Nov. 2017 Articles

In the trademark-related civil cases, in 2016, Beijing IP Court Brief analysis on the judicial data (trademark section) of concluded 108 trademark-related civil cases in total. Among Beijing IP Court in 2016 them, there are 26 civil cases of first instance, among which 14 cases are concluded through judgment, and the plaintiff's winning rate is 92.9%. By Gang Hu In the civil judgment of first instance, there are 11 cases with As one of the three IP courts first established in China, and procedural issues are as follows: well-known trademarks affirmed, and there are 10 cases in Beijing IP Court has always played the role of pioneer in the which the plaintiff wins the litigation, realizing a winning rate reform of judicial judgment of intellectual property in China. of 90.9%. Issues Involved Number The analysis on the judicial data of Beijing IP Court is It is particularly important to point out that, in the trademark- significant since it is not only aiming at the objective Same or Similar Trademarks and 417 related civil litigations, there are 12 cases with plaintiff evaluation of a court but also disclosing the current situation Goods involving foreign parties in total, which are concluded in the judicial protection of the most advanced and top-level through judgment and in which the foreign parties (plaintiff) intellectual property in China. The following is a brief analysis Cancellation on Non-use 164 win the litigation. Among them, there are three trademark to the important figures of the judicial protection data Unhealthy Influence 143 civil litigation cases involving affirmation of well-known (trademark section) of the Beijing IP Court in 2016. trademark. The average value judged in all three cases is In 2016, the Beijing IP Court totally accepted 4840 Priority Rights / Preemption in 122 around 2. 26 million RMB (0.29 million Euros) higher than the administrative cases regarding authorization and affirmation bad faith average valued judged in 2015, which explains the affairs, among them 88.31% administrative cases (4274 in compensation judged in the cases involving affirmation of Distinctiveness 74 total) relating trademark affairs. well-known trademarks in 2016 is overall higher than that in the previous year. Therefore, it is indeed positive news to The average duration of trial in 2016 for Beijing IP Court Beijing IP Court newly accepted 5,936 trademark-related encourage the foreigners to defend their legitimate and acting as court of first instance, to conclude trademark civil administrative cases of first instance in total and concluded crucial part of their IP assets, the well known trademark, cases is 331 days. Whereas, the average duration of trial of 4,356 cases in 2016, 34.9% higher than those in 2015. from any dilution and infringement in the Chinese market. trademark administrative Cases is only 158 days. However, Among them, there are 964 cases with administrative ruling the average duration of trial for different nature of trademark overruled, making the rate of overruling 24.0%. In other administrative cases has significant difference. The specific words, about one fourth trademark-related administrative details are as follows. cases were reversed by Beijing IP Court. Then, it is worthwhile to stick to your own opinions through judicial procedure. Brief of Case Average Duration of Trial in 2016 (Days) In the recent years, "preemption in bad faith" has become a hot topic in the protection of trademark rights. In the Review on Official Refusal 109 trademark-related administrative cases concluded by Beijing IP Court in 2016, there are 284 cases involving preemption Review on Opposition 393 in bad faith in total, representing 7.1% of the total cases judged; among them, there are 129 cases with preemption Review on Non-registration 125 in bad faith affirmed by the court, representing 45.4% of the Invalidation 273 total cases involving such issue. In addition, it is worth mentioning that there are 383 cases involving well-known Review on Non-use Cancellation 283 trademarks judged in the trademark-related administrative cases. The judicial authority strictly and prudently affirms the well-known trademarks on the principle of judgment on Brief of Case individual cases. The proportion of cases with trademarks affirmed by judicial authority as well-known trademarks in In the cases with administrative ruling cancelled according to 2016 is 11.7%. the judgment by Beijing IP Court in 2016, the substantial p. 21 p. 21 Nov. 2017 Articles Nov. 2017 Articles

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.