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Differences between Intellectual Property Protection in China and the EU

(September 25th, 2014)

By Richard HoffmannECOVIS Beijing

China, as well as the European Member States, are members of the World Intellectual Property Organization (WIPO), party to international agreements such as the Paris Convention, the Berne Convention, and the Madrid Protocol. Furthermore, since becoming a member of the WTO, China has amended its IPR laws and regulations to comply with the WTO agreement on Trade Related aspects of Intellectual Property Rights (TRIPS). Therefore the regulations regarding intellectual property in China, are almost the same as in the EU. However, there are important differences that need to be considered and the consultation of an expert is advised, in order to successfully protect intellectual property.

Types

Paris Convention: Under this convention, every person from a member state can apply for a trademark or patent in every other member state and will be given the same rights, as a national of that country would receive.

Berne Convention: Signatory states have to recognize the copyright of an author from another signatory state, in the same way they recognize the copyright of their nationals.

Madrid Protocol: This protocol allows to obtain a bundle of national trademark registrations in different jurisdictions, through a single application.

 

Main Types of Intellectual Property Rights in China:

 

Trademark

The registration of a trademark in China is valid for 10 years from the date of filing and the protection starts with the registration date. The registration can be renewed indefinitely for further periods of 10 years. Like most countries, China adopts the first to file principle, which means the right to the grant of a trademark, lies with the first person to file for the application. It is also possible to register non-conventional trademarks such as sound marks, 3D trademarks or color trademarks. China like the EU, uses the Nice Classification, which is a system for classifying goods and services for the registration of a trademark. It is very important to list all goods and services that should be protected by the trademark, because indicating just the call heading of the class may leave loopholes in the protection. It is also important to consider the registration of Chinese translation/transliteration, because otherwise someone else can register it. Foreign companies that don’t have a registered office in China, have to use a local attorney to file a trademark application.

trade mark

Invention Patent

For an invention patent the first to file principle and absolute novelty applies both in China and the EU and the possibility to claim the priority date of first application is 12 months. Registered invention patents are protected for 20 years and both jurisdictions accept international patent applications under the Patent Cooperation Treaty (PCT). Also the extension of the scope of the original disclosure is not allowed in China, as well as in the EU. If the patent document is originally in a foreign language, the Chinese translation is extremely important, as patent applications are only processed in Chinese.

iprop office

Utility Model Protection

Utility Models fall under the patent law and are considered a type of patent. It is very common in China, as there is no substantive examination in the process. In comparison utility models are not available in every European country. As the grant of utility models is less demanding compared to patents, more foreign companies should consider this form of protection.

iprop office

Design Right

Designs fall under the patent law and are considered a type of patent in China. In contrast to the EU, where designs can be protected for 3 years without registration, designs must be registered in China to be protected and they have to be renewed each year. Registered designs are protected for 10 years in China, while in the EU they are protected for 25 years. Compared to the EU, there is no substantive examination for granting a design right in China. In both jurisdictions the absolute novelty standard applies and the possibility to claim the priority date of first application is 6 months.

iprop office

Copyright

In China and the EU, Copyright is protected from the date of creation and for the life of the author plus 50 years. However for film, photographic, televisual and audiovisual work, the term is only 50 years, starting from the first publication. Even though there is no requirement to register a copyright in China, it is highly recommended, as it makes proving the ownership in disputes or court cases easier. In comparison to many other countries, in China, the employee owns the copyright for work created during the time of employment. However, the employer has the priority right to exploit the work.

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Enforcement of Intellectual Property Rights

 

There are four main enforcementoptions in China including administrative actions, civil litigation, criminal sanctions and customs seizure.

Administrative Actions

The main Chinese administrative bodies are the Intellectual Property office, the Administration for Industry and Commerce and the Copyright Bureau. The first step is to file a complaint with the competent Autority, therefore evidence regarding the ownership of the right, as well as evidence of the infringement needs to be presented. The administrative bodies have the power to raid premises, to seize and destroy infringing items, impose injunctions and to impose fines.

Civil Litigation

Civil litigation is the same as a court case in the EU. The usual remedies are injunctions, damages and destruction of the products. There are certain aspects in the Chinese litigation system that differ from the EU and should be considered. Foreign evidence must be notarized and legalized in order to be admissible. As courts hardly order the infringer to produce evidence, the rights holder has to collect and present evidence to the court, which can be difficult in some cases. Also preliminary injunctions and evidence preservation measures are rarely granted. It should also be noticed that in China first instance, judgments can be appealed and are not immediately enforceable.

Criminal Sanctions

In regards to patents, criminal sanctions are only used if the patent certificate itself has been counterfeit Therefore criminal sanctions are more often used in the area of trademark and copyright infringements. There are three ways of initializing criminal sanctions, involving reporting to the Public Security Bureau, an administrative agency transfers its case to a criminal agency or a trademark owner files a criminal lawsuit.

Customs Seizure

The customs supervises both importation and exportation. In China a rights holder must record registered IP rights at the General Administration of Customs, in order to achieve active customs enforcement, in the EU in comparison, no formal registration or recordation with the custom authorities is needed. It should also be noted that the practice can vary heavily across China.

 

Even though China offers enforcement options for Intellectual Property rights, it is highly recommended to take precautionary measures. Even if a rights holder is familiar with the regulations, he should seek advice from an expert before entering the market, as the laws are constantly changing. When hiring an employee, a company should have effective IP-related clauses and educate their workforce in IP rights and protection. It’s also recommended to have sound physical protection and destruction methods for drawings, documents, plans and samples. Furthermore risk assessments and due diligent checks on business partners and the usage of clear and well drafted contracts is necessary to be protected. As personal relationships (guanxi) are very important in the Chinese business world, it is advised to establish good relationships with the relevant organizations and authorities.

For any further questions regarding this topic, please do not hesitate to contact us directly.

Richard Hoffmann Richard Hoffmann is Partner at ECOVIS Beijing China. He obtained an honor’s degree in law and worked in Germany, America and China for various prestigious law firms prior to joining ECOVIS. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV. Contact: richard.hoffmann@ecovis.com
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Author:
Richard Hoffmann
richard.hoffmann@ecovis.com
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