Upcoming Program on Fashion and IP Law

I will be speaking on February 20, 2019 at Berkeley Law at 12:50 in a Fashion and IP discussion and screening with my former Fordham colleague Prof. Susan Scafidi. We will be screening the recent film Fashion and IP.

The program is free and open to the public.

Fashion and IP Poster - Feb. 20th (1)

 

Here’s a report from last year  of the Council of Fashion Designers of America on the problem of bad faith registrations of trademarks in China which discusses the pervasiveness of the problem, including the costs imposed on small and medium enterprise members, as well as the impact of serial squatters.

This report further underscores the importance of addressing tolerance of bad faith activities in China’s IP regime in current bilateral trade discussions as well as the need to recognize the significant improvements that are being made that have begun to address them.  Amongst the many significant cases addressing bad faith registrations in the clothing sector was the Michael Jordan case in 2016, which was based in part on naming rights and was reported here.  Another significant case from last year involving protection of trademarks and design elements that has significance for the fashion industry was Bayer v. Li Qing, which involved pirating of a Bayer design for its Coppertone lotions for pirate registrations, and Bayer’s assertions of a copyright interest in those designs to defeat the pirate’s assertions of trademark infringement in a declaratory judgment action involving the anti-unfair competition law, trademark and copyright laws.  The case was also notable as the court did not suspend its decisions pending the outcome of trademark invalidity decisions.

New Draft Trademark JI on Trademark Administrative Litigation Published for Public Comment

On October 14, 2014, the Supreme People’s Court published a draft judicial interpretation for public comment: “Regulations of the Supreme People’s Court on Certain Issues Related to Trials of Administrative Cases Involving the Grant and Confirmation of Trademark Rights.” (最高人民法院关于审理商标授权确权行政案件若干问题的规定).  This is one of two planned JI’s to implement the revised trademark law. The second JI will consider trademark infringement matters. Comments on this draft are due by November 15.

Attached is a  the translation of this draft JI for public comment, provided by Joe Simone of Simone IP Services.

Peter Humphrey and the Uncertain Status of the Private Investigator

Private investigation firms are important for many aspects of commercial life in China, particularly given the weaknesses in China’s evidence gathering system and the high thresholds that exist for criminal investigations. PI firms conduct every thing from due diligence for investment projects, background checks on business partners and investigations on trademark squatters, counterfeiters and patent infringers.

Peter Humphrey and his wife Yu Jingeng, private investigators hired by GSK, were recently sentenced by a Shanghai court during a one day trial, which followed 13 months detention. According to a Reuters report, the sentences were for two and a half and two years, respectively, plus fines. Humphrey is being deported. Prosecutors charged that the couple had illegally obtained and sold more than 250 items of private information, including household registration data, real estate documents and phone records. Yu is quoted by Reuters as noting that “In other countries, we were able to conduct similar checks, including personal information and private transactions, legally through courts.”

Private investigation firms are a critical component of an IP enforcement campaign in China. Thankfully, according to noted anti-counterfeiting lawyer Joe Simone, the conviction was not for “illegal business operations”, which can carry a harsh sentence.  Ironically, illegal business operations is routinely employed in IP cases for illegal publications in lieu of the lesser offense of copyright infringement (Criminal Code Art. 225).   Joe notes that there was a 1993 Ministry of Public Security rule on the illegality of private investigation firms.   However, as this was an administrative rule it is of limited binding effect. Nonetheless the Humphrey case has led many private investigation firms to question whether their operations are legal.

The status of PI firms has been of concern to many companies and governments for some time. As I recall, private investigators have also been used for a variety of domestic purposes, including, predictably, marital disputes. Evidentiary burdens in Chinese litigation, including difficulties of compelling the production of evidence by an adverse party, can make PI firms a key component of an IP enforcement team

Here was the question that the US government asked China about PI firms two years after it joined the WTO, back in 2003:

79. We understand that China currently restricts the operation of foreign private investigation firms in IPR matters. At the same time, police and administrative authorities are frequently limited in their ability to gather evidence in criminal and administrative prosecutions, making private investigative firms even more important. Current thresholds for criminalization of counterfeiting and piracy, if applied to case initiation, create a high barrier for police or administrative agencies to refer cases to criminal prosecution, making the necessity of private gathering of information even more critical. Please advise what rules apply to the operations of such firms, as well as any plans to permit these firms to more actively assist China’s administrative, criminal and civil enforcement authorities (IP/C/W/414, 12 November 2003).

China responded to that question a year later by noting:

60. With regard to the issue of private investigating firms, [the Chinese side] said that the Ministry of Public Security of China was taking active steps to consider it. However, there was still no new regulation being issued. (IP/C/34, 9 December 2004

Prof. Don Clarke of GW law school has collected the weibo transcripts for those who want to follow this issue further.

magnifyinglass

 

SIPS Commentary on New TM Law Implementing Regulations

Simone IP Services (SIPS) has graciously made available their Memo on the PRC Trademark Law Implementing Regulations . The Implementing Regulations were adopted by the State Council on April 29, 2014 (国令第651号).

Among other notable provisions, the memorandum notes that the Regulations codify existing case law on contributory liability for landlords whose tenants sell counterfeit goods (Art. 75). ISP’s are also included on the list of targets for contributory liability. More specific guidelines are provided for calculating fines based on “illegal business amounts” for sales of counterfeit goods (Art. 78). These guidelines, along with the increased level of fines, may help to provide greater deterrence. However, the method of calculation for fines still remains different from the method of calculating relevant trademark criminal thresholds.

The Regulations also make adjustment to a number of filing guidelines and procedures. Although deadlines have generally been shortened, the revised Regulations maintain the three month period for filing supplemental submissions. An earlier draft had shortened this period from 90 days to 30 days, which would have been particularly burdensome for foreign rights holders. However, other shortened deadlines are maintained, including a 15 day time period to respond to requests from the CTMO for modifications or clarifications of applications (the previous time frame had been 30 days).