The Scotch Whisky Victory for Trademarks

On September 17, the Scotch Whisky Association announced a significant anti-counterfeiting victory in the Anqing Intermediate Court in Anhui Province.  The case is Scotch Whisky  Association vs. Anhui Guangyu Packaging Company Ltd., Wang Xuming and others (Trademark Infringement, First Instance) ,” 苏格兰威士忌协会与安徽广宇包装科技有限公司、王旭明等侵害商标权纠纷一审民事判决书.”(August 31, 2015) ((2015)宜民三初字第00024号).  The case is available on line at the Chinese court website.

This case appears to have involved the unauthorized printing of Scotch Whiskey packaging in the form of bottle caps, some of which appears to have been made available for sale on line through Alibaba.com.  The court awarded damages of 100,00 RMB, and injunctive relief.  The court found that the SWA had difficulties proving damages and therefor awarded what appears to be statutory damages, plus costs of 11,820 RMB.

Damages may seem quite low, but according to the CIELA database, the average damages for the eight trademark infringement cases in the food and beverage area that they collected in Anhui Province (where SWA likely had to bring the case) was 6,000 RMB.

The case has been picked up by the media.  One article in the spirits sector noted that it was the second victory for Scotch Whisky, in addition to some additional recognition of its GI in Africa. Another article linked the victory to the Scotch Whiskey’s “historical granting” of a “Geographical Indication in 2010”which is “fully backed by China’s government through the GI”.

Curiously, both of these articles refer, directly or indirectly, to the sui generis GI system which is administrated by AQSIQ and the Ministry of Agriculture, and failed to mention the role of trademark protection.  This might lead one to suspect that the protection arose under China’s sui generis GI system,which the SWA has been actively promoting. However, China’s trademark system is much more fully developed in enforcement by comparison to the sui generis GI system, which lacks the full panoply of TRIPS-mandated civil, criminal and border remedies that attach to trademarks as intellectual property that may be granted to, and owned and protected by individuals and enterprises.

As I read the civil decision, the basis for the civil enforcement action was the 2008 collective mark obtained by the Scotch Whisky Association in Trademark Class 33  (no. 5915031  for “ScotchWhisky”).  Information on sui generis GI protection was, however, accepted as evidence of proof of the fame of the mark, although it had been introduced for its distinctiveness (evidentiary group 2, in the court’s decision).

The court decision did not analyze in great detail issues such as the application of the newly revised trademark law, the role of statutory damages and proof of injury,  and the role of the bottle caps in the export trade.  A principal of the company,l Wang Xuming was, however, held jointly liable with the packaging company for paying damages.   The caps were, according to one media report, used to produce counterfeit whiskey for sale in Burma.

Information presented on police actions involving these defendants in prior years were accepted into evidence.  According to the English press reports, additional police investigations are also possible.

Altogether, this is a well-deserved victory for the SWA.  In addition to vindicating the role of the trademark enforcement system, the case showed the impact of such hot issues as the efforts to better coordinate civil, criminal and administrative enforcement actions, address on-line sales,  consider the impact of the new trademark law on pending cases, address transnational sales, successfully bring a case in the home court of a counterfeiter, and address those who contribute to the chain of counterfeit production.

Congratulations to the SWA and its team!

Note: Please send any corrections to the author (chinaipr@yahoo.com).  This article consists of the author’s personal opinion only.

Developments in Online Civil Copyright Enforcement in China: NCAC’s Analysis

The National Copyright Administration of China (NCAC), in its 2014 Annual Report Online Copyright Protection in China (2014年中国网络版权保护年度报告), analyzed published opinions on online civil copyright cases involving the “right of transmission to the public” (making available right)  drawing on three public databases (the Supreme People’s Court’s “中国知识产权裁判文书网” 、 “中国裁判文书网” ,and Peking University’s “法宝数据”).

There were 1650 reported civil opinions on online infringement in 2014, an increase of 18.8 percent from last year. Audiovisual cases occupied first place, at 44.5 percent of these opinions.  Literary works constituted 390 cases, or 23.6 percent. This was an increase of six times over last year. Graphical works were 363 cases, a 3.3 times increase. Video games totaled 56 cases and music was last of these major categories with 20 cases, or about 1 percent, a decrease from last year of 80 percent. In total these categories constituted 98 percent of reported cases.

The report identifies that were 86 cases involving 11 of the 20 websites that were subject to supervision by China’s copyright administrative authority (NCAC), and were 5.2% of the total cases.  These cases were a declining percentage of online infringement cases compared to past year.  It appears that NCA is using this data to show the effectiveness of its administrative mechanisms.

The decline in music cases, in my estimation, likely reflects the great difficulty the music industry faces.  Music is a priority area for NCA this year.  Improvements in administrative IP protection planned at the beginning of 2015, including a recently launched campaign,  will also hopefully reduce the level of infringement by key internet companies and/or support more effective civil enforcement in this sector.

Plaintiffs in online copyright cases were mostly enterprises, and defendants were mostly internet companies. Individuals were a small number of the plaintiffs (about 6.4 percent), which was about the same as last year. Online media companies were principal defendants (87%).  The remaining 13 percent consisted of traditional media companies, including traditional publishers, newspapers, motion picture studios, and television stations.

Civil online cases were principally heard in Guangdong, Beijing and Zhejiang with about 70 percent of the cases.  Zhejiang jumped from fifth place last year to third place.   Fujian also showed a significant increase.  A large share of the audiovisual infringement cases in Guangdong involved Kuaibo (www.qvod.com).  The regional distribution of the cases also shows that there was a drop in audiovisual cases in Beijing, but an increase in other areas such as written works.  Most of the plaintiffs in Beijing were well known companies in such fields as motion pictures, cultural product distribution, and internet technologies, which in NCAC’s view could suggest a maturing of the Beijing environment towards protecting a greater variety of content owners.

The increase in cases in Zhejiang in online cases is due to the rapid increase in online industries in that province, which also has consequences for trademark counterfeiting. As I recently reported, online counterfeiting has also become a priority for China Customs in China, with Zhejiang also figuring prominently in seizures of exports at such ports as Hangzhou and Ningbo.

The report also notes that there were 30 online criminal copyright cases as well, and that fines and punishment had increased, with one fourth of the cases involving fines over 500,000 RMB.

Note that I tried to compare this data with the data that is available on www.ciela.cn.  Unfortunately the data sets do not match well.  CIELA analyzes data by cities and provides more granular detail on proceedings and outcomes (length of time, damages, “win” rates, etc.).  Moreover, CIELA does not breakout on-line copyright cases.  I was thus unable to reliably further validate NCA’s observations in this report.

The NCAC report was released on April 22, 2015.  However, with only 219 hits since it was placed on line as of today, it remains a “sleeper” of a report, notwithstanding the dramatic growth in online copyright issues in China.

Honey Laundering Comes to Texas

Honeylaundering

It’s substandard, it may be unhealthy and it misstates the country of origin, and it may be counterfeit.  Due to high tariffs, the United States appears to be targeted for diversion of Chinese honey through misstating the country of origin.   The Department of Homeland Security just completed a big bust in Houston on this “counterfeit” honey, some of which may contains a banned antibiotic.

Leading Group’s Work Plan for Fighting Infringement in the On-Line Environment

Here’s the full text of the June 18, 2014 work plan of the Leading Group under the State Council for fighting the manufacturing and sale of fake and shoddy goods in the on-line environment (关于印发打击互联网领域侵犯知识产 权和制售假冒 伪劣商品工作方案 的通知) (http://www.ipraction.cn/2014/06/25/ARTI1403685293345289.shtml).  The plan involves a range of agencies, including Customs, AQSIQ, GAPP/SARFT, SAIC, Ministry of Agriculture, and the Chinese Food and Drug Administration.

Notice on Issuing the Work Plan for Fighting IP Infringement and the Manufacturing and Sale of Fake and Shoddy Goods in the Internet Field (Da Jia Fa [2014] No. 3)

All member units of the Leading Group of the National Fight against IP Infringement and the Manufacturing and Sale of Fake and Shoddy Goods:

The “Work Plan for Fighting IP Infringement and the Manufacturing and Sale of Fake and Shoddy Goods in the Internet Field” is hereby issued to you, which you are required to implement carefully.

  Leading Group of the National Fight against IP Infringement and the Manufacturing and Sale of Fake and Shoddy Goods (“Leading Group”)

  June 18, 2014

 

Notice on Issuing the Work Plan for Fighting IP Infringement and the Manufacturing and Sale of Fake and Shoddy Goods in the Internet Field

This work plan has been developed to implement the spirit of the “Notice of the General Office of the State Council on Issuing the Essentials of the Nationwide Fight against IP Infringement and the Manufacturing and Sales of Fake and Shoddy Goods in 2014” (Guo Fa Ban [2014] No. 13), crack down the illegal and criminal activities of infringing IP and manufacturing and selling fake and shoddy goods in the Internet field (collectively “Infringement & Counterfeiting”) and promote the healthy development of e-commerce.

  1. Clarifying objectives and tasks

Starting from June 2014, we will spend half a year of time carrying out a special campaign to address Infringement & Counterfeiting in the Internet field; strengthen the supervision of key websites and online marketing platforms, severely investigate and punish a number of cases, shut down a number of illegal websites and deal with a number of lawbreakers to warn and educate operators and consumers. Meanwhile, in response to the cross-regional, long chain, virtualized and intellectualized characteristics of Infringement & Counterfeiting in the Internet field, we will innovate the modes and means of supervision, strengthen interdepartmental and cross-regional information sharing and law enforcement cooperation, enhance the resultant force of work, improve the long-term mechanism of fighting Infringement & Counterfeiting in the Internet field and maintain the normal order of e-commerce.

  1. Highlighting the focuses

(1)   Cracking down on the online sales of fake and shoddy goods. The departments, including the Ministry of Agriculture, SAIC, AQSIQ and CFDA, shall focus on agricultural materials, auto parts, children’s products and the drugs that treat tumors and chronic diseases, strengthen the surveillance of Internet search engines, promptly find the information on fake and shoddy goods and the websites, web pages and various links that are suspected of illegal sales, improve the mechanisms of information submission, clues sharing, case studies and communications.

(2)   Cracking down on online infringement and piracy. The departments, including the State Administration of Press, Publication, Radio, Film and Television (“Administration”) and the National Internet Information Office, shall launch the special “Sword Net Campaign” against Internet infringement and piracy that focuses on the key fields of online literature, music, films and TV, games, animation and software and the key products of books, AV products, electronic publications, online publications and standard copyrighted works; focus on combating the acts of committing infringement and piracy in the field of mobile Internet and through the use of set top boxes and TV dongles; punish and ban illegal websites of AV programs according to law. The Administration shall intensify the copyright supervision of key websites and standardize the order of the copyright market of works that are transmitted on the Internet. The Ministry of Culture shall regulate the market of online music and games and strengthen the supervision of the online cultural products that use such terminals as mobile phones and tablet computers as carriers. The SAIC and the SIPO shall step up the supervision and inspection of the online acts that infringe patent right and trademark right, intensify the communications with e-commerce platforms, improve the working mechanism of enforcement and case handling, and promptly investigate and punish infringing acts.

(3)   Intensifying the supervision of e-commerce websites. The departments, including the Ministry of Industry and Information Technology (“MIIT”), SAIC and the National Internet Information Office, shall screen and promptly delete the information on infringing and fake goods by focusing on large shopping websites; shield and shut down the websites that have violated laws and regulations on the basis of the records of the involved websites; strengthen interdepartmental collaboration to investigate and deal with unlicensed websites; intensify the supervision and management of the business conduct of Internet service providers, domain name registration service provides and information service providers; assist the law enforcement department in investigating and collecting the evidences of Infringement & Counterfeiting.

(4)   Intensifying the harnessing of production and processing sources. The AQSIQ shall carry out a special law enforcement campaign to intensify the centralized harnessing of the sources of e-commerce products, strengthen the monitoring, supervision and random check of the quality risks of e-commerce products, promptly announce the results of the random check of product quality; accelerate the building of a product quality traceability system, improve the mechanism of online discovery, notification of clues, source tracing, local investigation and treatment, strengthen the clean-up and rectification of places with concentrated production of e-commerce  products, and launch regional quality enhancement actions; push enterprises to set up the system for assuring the quality of e-commerce products, promote the application of the bar codes for commodities and organization codes; solve the information dissymmetry under the online environment; rely on the 托“12365” system to establish and improve the mechanism of collaboration in fake-fighting enforcement and strengthen joint cross-regional law enforcement.

(5)   Launching a special campaign for cross-border IP protection. The General Administration of Customs (“GAC”) and the post offices shall launch a special law enforcement campaign that targets the consumer products, cosmetics and electrical products transported via mailing and express delivery channels in cross-border online transactions to combat the infringing and illegal acts in the channels for import/export, mailing and express delivery. The Ministry of Public Security and GAC shall improve the mechanism of multilateral/bilateral law enforcement to fight the cross-border crimes of leveraging the Internet to sell fake and shoddy goods.

  1. Intensifying supervisory measures

(1)   Collaborating in strengthening enforcement. The competent administrative enforcement departments shall combine online supervision with offline supervision, provide each other with the information on Infringement & Counterfeiting found in production, sales and import/export, intensify the backward tracing of clues of Infringement & Counterfeiting, dig out and clear out the sources of producing and processing infringing and fake products; hand over or report the discovered cases of suspected crimes or the clues thereof to the public security authority in time; strengthen the collaboration in cross-regional law enforcement, improve the system of communicating clues, referring cases and assisting in investigations; hand over any illegal operators of online infringing and fake goods who are found to be in nonlocal places promptly to the law enforcement department at the location thereof or the servers of their websites for investigation and follow-up; report any dispute over jurisdiction to the higher law enforcement department for it to designate the jurisdiction; establish the mechanism of communicating and contacting with large local e-commerce enterprises and the logistic enterprises, EMS enterprises and payment companies related to e-commerce, obtain the information on operations, logistics and payment according to law to enhance case-handling efficiency.

(2)   Intensifying the supporting role of information. The Ministry of Public Security shall strengthen the cooperation with e-commerce platforms, meticulously screen the clues of online Infringement & Counterfeiting and enhance the ability to find criminal activities under the Internet environment; give full play to the advantages of cluster of campaigns, ferret out the production dens, destroy the marketing network and crack down on the criminal activities of online Infringement & Counterfeiting on the entire chain.

(3)   Strengthening social supervision and the self-discipline of industries. We should improve the system of report incentives, guide consumers to report the illegal acts of online Infringement & Counterfeiting and broaden clue sources and channels; improve the system of accepting the reports on the acts of online Infringement & Counterfeiting, case handling and feedback on results; encourage right holders to actively safeguard their own rights; publish the information on the cases involving online Infringement & Counterfeiting and expose typical cases to deter criminal acts and educate the general public. The industry management department shall give full play to the roles of industry organizations e.g. the associations and chamber of commerce, in the field of e-commerce, to conduct industry self-discipline and cultivate the fashion of consciously resisting the acts of Infringement & Counterfeiting in the whole industry.

(4)   Using IT to enhance supervisory capability. The competent law enforcement departments shall innovate the modes and means of supervision, use IT to set up the electronic service supervising network, database of Internet operators, right-safeguarding center for online consumption and reporting platform, develop and apply the engine of searching Infringement & Counterfeiting, information inquiry and monitoring software and traceability technology to enhance the informatization level of Internet surveillance and provide technical support for intensifying supervision and enforcement.

  1. Establishing a long-term mechanism

(1)   Promoting the improvement of laws, regulations and standards for supervision of the Internet. The Office of the Leading Group shall join the other related departments in establishing a long-term work mechanism that addresses the characteristics of Infringement & Counterfeiting acts in the Internet field and the vulnerabilities in the supervisory efforts, studying and making opinions on improving the relevant laws and regulations, promoting the release of judicial interpretations, tightening the connection between relevant laws, administrative regulations and departmental rules, clarifying the trading rules, quality supervision, after-sale service and compensation responsibility of e-commerce platforms and online shops, improving the evidence rules for investigating the Infringement & Counterfeiting in the Internet field and the method of protecting online business data, perfecting the standards for exhibition of online products, information disclosure and product verification to provide case handling with institutional guarantee.

(2)   Driving the implementation of corporate responsibility. The industry management department shall guide e-commerce enterprises in improving the internal management system, strictly examining the qualifications of the member merchants, registering their real names, strengthening the examination of the information on the goods sold online, taking the initiative to provide the law enforcement department with the relevant information of operators, and improving the mechanism of accepting and processing reports and complaints as well as  the mechanism for the elimination and withdrawal of illegal merchants; intensify the market supervision of logistics and EMS enterprises, urge the EMS enterprises to strictly implement the post inspection system; study the possibility of establishing the system of real-name postal delivery; guide the e-commerce payment companies, logistics enterprises and EMS enterprises in recording the information, providing information inquiry service as necessary for law enforcement and case handling, and assisting the law enforcement department in carrying out investigations.

(3)   Accelerating the building of the e-commerce credit system. The industry management department and the enforcement supervising department shall accelerate the creation of a fundamental database of e-commerce enterprises and improve the trading credit files of online commodities; promote the exchange and sharing of the credit information of e-commerce enterprises and the relevant information in other social fields; guide e-commerce enterprises in establishing and improving the system for management of customer credit and evaluation of trade credit; encourage the development of e-commerce third-party credit service organizations, the objective and just collection and recording of the credit of operators, establishment of credit evaluation system and credit information disclosure system to provide e-commerce enterprises and consumers with credit service and warn trading risks; strengthen the training of small and medium-sized e-commerce enterprises to strengthen their ability to prevent and identify fakes and cause them to carry out good faith and law-abiding operations.

  1. Meet work requirements

(1)   Strengthening organizational leadership. All regions and leading departments shall fully recognize the importance and necessity of fighting Infringement & Counterfeiting in the Internet field, strengthen organization and leadership, assign responsibilities to each level; reinforce the guidance and inspection of the grassroots, coordinate the handling of interdepartmental and cross-regional cases, concentrate resources to investigate and deal with a number of major cases of a serious nature that draw domestic and foreign attention. The Office of the Leading Group and the related departments shall supervise and inspect the implementation of the fight in various places in due time.

(2)   Scheduling. All regions and the related departments shall work out a specific implementation plan in light of their realities, refine the work measures and make all-round arrangement for the purpose before the end of June; collect criminal clues extensively, make careful analysis and screening thereof, sternly investigate, deal with and expose criminal cases, study the promotion of the relevant systems and mechanisms in July ~ December; make all-round summarization of the efforts and form a report to be submitted to the Office of the Leading Group before the end of December.

(3)   Strengthen publicity and education. All regions and the related departments shall make full use of the media, e.g. newspapers, TV, radio and press websites, for timely coverage of the work measures, results and typical cases to expand influence, create an atmosphere of public opinions; extensively popularize the knowledge about discerning fakes, guide consumers and IP right holders in taking an active part, pool the forces of the entire society to jointly address the Infringement & Counterfeiting in the Internet field.

The Problem of “Mountain Stronghold” Teas

Image

How many corrupted officials have got their Ph.D. from corrupted Universities in China?”,  asks Sun Yifei, a professor of geography at Calstate Northridge, on the Google S&T and Innovation in China page.  The answer seems to be, as one blogger noted, that: “China is considered a big “mountain stronghold” country, even master’s degrees for officials, and the title of Ph.D. are counterfeit and substandard” 中国号称山寨大国,连官场上的硕士、博士头衔也大都是伪劣假冒。

This particular episode of false credentials may even have an IP angle.  It seems that a certain “DR. MA,… was just removed from the vice-governor position at Yunnan.  Beijing Normal University, one of China’s 211” and “985” Universities, was the one that gave the degree to him. The executive vice president of the University, SHI Peijun, a geographer, was his adviser for his research on PU-ER Tea. The University got more than 10 million contract/grants from Yunnan” (where this tea is grown).

What is “mountain stronghold” (shanzhai) culture, and how is it implicated in counterfeiting, substandard products and fake degrees?  Prof. Hennessey’s article “Deconstructing Shanzhai–China’s Copycat Counterculture: Catch Me If You Can” explains that “in popular slang in contemporary China, ‘to copy’ and ‘to parody’ as self-aware, casual, and public behavior by ordinary citizens is referred to as ‘shanzhai.’ The literal meaning of the word shanzhai is ‘mountain stronghold,’ which in traditional Chinese popular culture refers to the hideout of bandits and other outlaws”.

Puer tea is the subject of trademark and geographical indication protection in China and overseas.  The tea is distinctive in taste and history.  It has a peaty, fermented taste.  It was carried on the backs of horses through Tibet, and is sold in brick form.  As my brother, a tea connoisseur (picture below) notes, this tea is  particularly well-suited to this Year of the Horse.  Predictably the tea has also been the subject of counterfeiting and possibly abusive trademark registrations.  For example, at the USPTO website, a Canadian Chinese tried to claim the name in 2007 as his own trademark, but abandoned the mark.  The Yunnan Puer Tea Association now owns the mark in the United States, based on an application filed in 2011, which was granted in 2012 (see their trademark above). 

Does counterfeiting hurt China? The answer seems obvious in the case of puer tea.  Adequately defining what is the puer geographical region helps Chinese farmers and agricultural regions, as well as benefitting the IP system and consumers.  Officials with knock-off diplomas, knock-off trademarks and knock off products for the same region help no one.  Ultimately, the injury from “mountain stronghold” counterfeiting reaches deep into the Lancang mountain region where this delicious tea originates.

Image

Source: http://kenneth-cohen.blogspot.com/2013_05_01_archive.html

The NBA and Its Continuing Trademark Battles

The July 9 issue of the SIPO Newspaper/ Trademark Weekly (http://www.tmweek.com/yw_list_danye.asp?newsid=1624) reports that Nike and Kobe Bryant are involved in the latest skirmish with an alleged trademark squatter.  A natural person in Fujian person has applied for a mark in class 18 for “科比 KB-KOBE” and obtained a registration against the opposition of Nike.  Nike asserted before the Trademark Review and Adjudication Board  that the mark infringed Kobe Bryant’s personality rights (rights to the name), and was in bad faith, and has since appealed the matter to the Beijing Number 1 Intermediate Court. Continue reading