False Friends (形似神异): Comparing US and Chinese Administrative Patent Enforcement

The China Patents and Trademarks journal has now made publicly available the article I wrote late last year with former USPTO Director David Kappos and former Chief Judge Randall Rader (ret.)  “Faux Amis: China-US Administrative Enforcement Comparison”, in both  English, and Chinese (形似神异:中美专利行政执法制度对比).  Kevin Lu 吕行 of USPTO also assisted in researching the article.

The article discusses the differences between administrative enforcement of patents in the United States International Trade Commission (Section 337) and by SIPO in China and notes that the comparisons of China’s administrative patent system to the USITC system are misleading, as the two systems are different both qualitatively and quantitatively. 

The opinions in the article are of course strictly the authors’ own.

USPTO EXTERN POSITION OPEN

USPTO has posted a position for an unpaid extern in Chinese intellectual property matters commencing June 6, 2017. The position requires the following skills:

– Knowledge of Chinese language

– Knowledge of Intellectual Property (IP)

– Ability to research US and Chinese cases

– Ability to use Excel and PowerPoint

– Skill in preparing instructional material

The extern will assist staff of the USPTO’s China Team by researching intellectual property issues in China and assisting with organizing meetings and programs. Some instruction on Chinese IP databases may be provided.

Anti-Unfair Competition Law Released for Public Comment

The National People’s Congress released a draft of the Anti-unfair Competition Law for public comment on February 25, 2017.  A draft translation is already available on the China Law Translate website, which has also posted the Chinese original. I previously published a draft with comments of the ABA and George Mason’s Global Antitrust Institute here. The comment period closes March 25, 2017.  The NPC Observer blog is also following developments, including posting the official explanation, which I have also made available here . 

What Makes China’s IP System Different?

I was recently asked by a professor of US copyright law what distinguishes the Chinese IP system different from the United States.

Here are the five key aspects that I quickly came up with:

  1. The Chinese system is modeled on the German system, although it has its own unique characteristics Issues like service invention remuneration, the role of utility model patents, bifurcated validity and infringement determinations, neighboring rights in copyright, etc. all derive from the early German influence on China.  In some cases, China’s IP regime has been unwilling to reform some of these early German models despite subsequent German reforms and influence from other countries, such as the United States.
  2. The Chinese system retains aspects of a non-market economy in its IP regime. China has incorporated IP into its five year and other plans. There is a high emphasis on public intervention in IP rights, including an extensive administrative system, and other means of state intervention in the creation, exercise and enforcement of IP rights.
  3. China is a larger and more China-focused IP regime than the United States. China’s patent and trademark offices and its litigation docket are several times larger than the United States.  Moreover, most of the applicants and most of the litigants are Chinese.  In general foreigners play a more limited role in prosecuting and litigating IP rights in China than foreigners do in the United States.  This high quantitative activity does not necessarily correlate with high quality.
  4. China retains a notion that IP is good for society.  In general, Chinese society is very supportive of efforts to create an innovative society where IP plays an important role.  Unlike other transition economies, China adopted IP laws before it enacted real property and property laws.  China’s leadership believed that IP was a “property right” for “intellectuals” that would help stimulate economic activity after China emerged from the cultural revolution.
  5. IP has played a pioneering role in Chinese civil law reform. Many of China’s first civil law reforms originated with IP, including introduction of preliminary injunctions, combined civil, criminal and administrative tribunals, specialized and well-trained IP tribunals and courts, limited discovery, and develop of case law/precedent.  China has consciously experimented with civil law in IP before bringing these reforms to areas other than IP.

 

I am interested to know if readers any suggestions for changes to this top five list.

A Taste of China IP In The New Year

There continue to be various thrusts and feints in these early days of the Trump administration on Chinese IP related matters.  Here’s  a quick rundown.

Tim Trainer, a friend and former colleague, who is also the President of Global IP Strategy Ctr, P.C. & Galaxy Systems, Inc. has  drawn attention to several China IP-related developments including a Trump executive order that involved IP theft, a bill introduced by Congressman Steve King of Iowa that targets China’s theft of intellectual property (February 14, 2017), and the effect of TPP withdrawal on China’s free trade agenda.

The Executive Order notes the following:

It shall be the policy of the executive branch to:

(a) strengthen enforcement of Federal law in order to thwart transnational criminal organizations and subsidiary organizations, including criminal gangs, cartels, racketeering organizations, and other groups engaged in illicit activities that present a threat to public safety and national security and that are related to, for example:

(ii)  corruption, cybercrime, fraud, financial crimes, and intellectual-property theft . . . .

This order from February 9 clearly puts IP theft on the radar.  While China is not singled out by name, it is worth reflecting that the term “theft” appears 7 times in the text of Dr. Peter Navarro’s book Death By China.  Of these seven times, “intellectual property theft”  appears  twice, and technology theft appears three times.  The term “intellectual property theft” is specifically indexed. Navarro, of course, is a leading advisor to the President on trade policy.

Continuing the theme of IP theft, Congressman King’s bill would, according to Trainer “require the imposition of duties on Chinese origin goods in an amount equal to the estimated losses from IPR violations suffered by US companies if enacted into law.”  This early stage bill is found here

Regarding TPP withdrawal and its effect on IP and China China’s Regional Comprehensive Economic Partnership agreements,   a recent Congressional Research Service report has noted that the RCEP agreements are “unlikely to include commitments as strong on issues from intellectual property rights to labor and environmental protections”.  As I have previously noted, “China’s  FTA  experience has thus far focused on a limited range of issues, most of which are not ‘core’ IP.”

Apart from Tim Trainer’s blog, the media has also reported extensively recently on several trademark decisions in China in President Trump’s favor.   However, China’s trademark examination standards contain provisions that prohibit use of the names of political leaders.   Moreover, unlike most other presidents, Trump was not a political leader until he was elected president.  The Chinese trademark examination standards prohibit trademarks that hurt social morality or have other ill political effects.  Amongst the enumerated bad political effects are trademarks that are identical or similar to a country, region or international organization’s leader’s name.

九、有害于社会主义道德风尚的或者有其他不良影响

二)具有政治上不良影响的

1.与国家、地区或者政治性国际组织领导人姓名相同或近似的

Postscript February 20, 2017:

While  I have no opinion on the merits of any case, I hasten to note that the great grandson of Teddy Roosevelt, Tweed Roosevelt, might have an opinion on whether rooseveltpolitical officials should be granted trademarks.  His company, Roosevelt, Tse and Company, owns several trademarks, many of which involve his eponymous restaurant in Shanghai, and some of which include the family crest (see below).   He also seems to have been the victim of some individuals filing using the family name.

Living political leaders have also had their names misused.  Three trademarks applications with the name of Barack Obama in 2008 by a company in Wuhan, China were refused registration by 2010.  There are several trademarks and trademark applications of varying status with the name Merkel.   A quick database search also showed up 7 applications with the Reagan name in English, one granted as recently as 2015 (Registration Number: 13981276) (for electrical goods).  There is one registration for Fidel Castro for use on travel bags, filed  by a natural person in Hebei 于锁群 (6792546).   Did Fidel authorize this?

Of course, trademarks are not only the names of people.  Several marks “In God We Trust” have been refused by the Chinese Trademark Office.  One is still pending (21508789).  It was filed by a company from Zhejiang.

A recent Washington Post article,  noted that China is a country where “faking foreign brands has long been a profitable business practice.”  The article refers back to the Qiaodan case as one important milestone in changing practices.  As any reader of this blog knows, there have been several important steps in recent years to address  abusive trademark practices. 

tweedroose