This is the fourth in a series on IP enforcement developments. I previously blogged on judicial developments, online copyright, Customs enforcement, and now I am writing on anticounterfeiting, particularly trademark counterfeiting.
There has been much happening on anticounterfeiting in China the past several weeks, including the much-reported dramas of the annual meeting of the International Anticounterfeiting Coalition, with Alibaba being denied membership, US Ambassador Baucus speaking at the IACC annual meeting, and Jack Ma meeting President Obama. On top of this drama, there had also been data out of China from IP Week (April 26), as well as the availability of other reports, such as USTR’s Special 301 report, which also singled out China’s online environment.
There have also been several high profile cases, typically involving allegations of bad faith trademark acquisition. One such case is the IPhone trademark dispute. Another case that may be in the making between Under Armour and Uncle Martian. These two disputes came on the backs of a hearing on the Michael Jorrdan / Qiaodan trademark dispute which was heard by the Supreme People’s Court on World IP Day, (April 26, 2016).
Despite the adverse publicity for China’s IP system, there is plenty of enforcement taking place. Alibaba reported through news outlets that the company has identified 3,518 groups selling fake goods on its platforms in 2015. It helped the police seize counterfeit goods worth $125 million and nail 300 suspects. In addition, surveys conducted by 91% of AmCham China respondents in a recent survey believed that that IPR enforcement had improved over the past five years, a view that was generally shared by USCBC [US-China Business Council] respondents (38% reported some improvement over the past year).
The sense of improvement may be due in part to the high level attention being given to long standing enforcement issues, particularly in the online environment. Towards the end of April 2016, the State Council released the outline of the Outline for the Work Plan for 2016 for the National Anti-IP Infringement and Anti-Manufacturing and Sales of Substandard and Counterfeit Goods (April 19, 2006). This Work Plan contains numerous provisions that address on-line and transborder enforcement. The first action item in this plan is to “strengthen control of infringement in the online environment. (Sec. 1.1)” Product sectors targeted include: food and pharmaceuticals; agricultural chemicals, household electronics, building materials, car parts, and childrens’ toys. Exports by post and express services are to be targeted. The Work Plan notes that there will be a 12th “Sword Network” campaign against online copyright enforcement. Cooperation with large online platforms is to be intensified, and supervision over them is to be strengthened. An e-commerce law is to be drafted (Sec. 3.10). International cooperation between law enforcement is also underscored (Sec. 7.26).
On May 4, SAIC announced its own on line enforcement campaign for 2016 (2016网络市场监管专项行动方案)(May 4, 2016, for action until November). The campaign calls for SAIC to take a leading role in “combatting online trademark infringement and other illegal activities. Each region’s AICs/ market supervision departments should intensify the legitimate rights and interests of the network of sale of counterfeit famous trademarks, should increase their efforts to deal with foreign trademarked goods, and safeguard the rights of consumers. They should investigate and punish the network abuse, fraudulent, counterfeit agricultural products of geographical indications. As for large-scale, cross-border complaints by trademark rights holders and consumer complaints involving centralized network typical cases of trademark infringement and counterfeiting, SAIC shall strengthen its attack on the production, sales of registered trademarks and other aspects of the work of the whole manufacturing chain.”
The courts have also not been shy at tackling difficult issues. One of the most important decisions affecting exports of counterfeit goods in 2015 was the PRETUL decision at the SPC (Nov. 16, 2015). This case held that unauthorized use of a mark in China constitutes infringement only if it can serve as an indicator of source of a product or service in the Chinese market. In appropriate circumstances, export sales by an OEM may not constitute infringement of the Chinese rights owner rights.
I welcome your comments and corrections!
Categories: Alibaba, China IPR, Counterfeiting, IACC, National Leading Group, OEM, PRETUL, Qiao Dan, Uncle Martian, Under Armour
Just a comment (indirectly) from someone in the field, that it remains very difficult to get on the ground enforcement, especially if public security is involved. They are very reluctant to become involved and they are the ones who can break down the locked doors of warehouses with counterfeit goods.