China Law Insight : China Law Insight: China Commercial and Intellectual Property Lawyers and Attorneys, Full Service Law Firm: King & Wood

By King & Wood's Trademark Group

One reader puts forward some questions regarding tort liability of the on-line BBS owners:

I am interested in the court's decision in Wang Hai Yang case but do not read Chinese. I note that the case has been appealed and want to know the court's decision particularly on the tort liability law and the right to reputation and privacy. Since the Tort Liability Law came into effect, I want to know if there had been any changes to the court's interpretation to right to privacy and right to reputation after Wang Fei case.

For your questions, please see below our reply:

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By King & Wood's Trademark Group

A "geographic indication" is a sign used on a product that indicates a specific geographical origin and that the product possesses qualities or a reputation or other features that are associated with that place of origin. That is, the sign represents the geographical origin of the goods in a certain territory or area or region within the territory.  The specific quality, reputation or other features of the goods are primarily related to the place of origin.  Even if goods fall within the same category, they share a different quality and reputation due to the natural or cultural factors of different geographical origins.

The geographic indication is considered one of the most important symbols that distinguishes between goods of different origins.  The protection of geographic indications can prompt economic development in a specific area or a country, and can also protect the legal interest of the manufacturer and consumers of the goods marked with the geographic indications.  As such, the protection of geographic indications needs to be consolidated.

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作者：金杜律师事务所商标组

地理标志，是指标示某商品来源于某地区，该商品的特定质量、信誉或者其他特征，主要由该地区的自然因素或者人文因素所决定的标志。也就是说，地理标志代表了在某个特定区域或在某个特定区域内的地区的商品的原产地。而该商品的特定质量、信誉或其他特征在很大程度上与商品的原产地密切相关。即便是同种类的商品来自于不同的地区，由于自然因素或人文因素的不同导致商品的质量和信誉也不尽相同。

地理标志目前已经成为区分商品来源的最重要的标志之一。对于地理标志的保护不仅可以刺激某个特定地区或国家的经济发展，而且可以保护生产商和消费者的合法权益。因此，对于地理标志的保护是十分必要的。

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作者：张维 金杜律师事务所知识产权组

作为世界第二大经济体，中国逐步出现在世界经济舞台的中心，中国的经济和法制也不断发生变化。随着中国国家知识产权保护体系的不断完善，专利投入快速增长，越来越显示出中国创新政策的优势，专利申请也出现了自己的特色。中国公司也创造了大量专有的知识产权，并对外国公司和中国当地的竞争对手提起侵权诉讼。中国第三次专利法修正案[1] （“新专利法”）也在很多方面改变了中国专利实务和程序。

这些新变化对所有中国境内开展的公司将产生深远的影响，特别是发展很大程度上依赖知识产权的公司。应对这些重要变化的最好的方式是什么呢？中国境内公司在设计其中国专利战略时，至少要考虑到下述几点要素。

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By Jiao Hongbin King & Wood's Intellectual Property Group

In December 2011, the Deputy Director of the State Intellectual Property Office of the P.R.C. expressed that China would in the near future promote amendments to the Patent Law, the Trademark Law and the Copyright Law of the P.R.C. as well as associated regulations, increase the amount of fines, and conduct research on applying punitive damage awards to profit-generating intentional infringement and counterfeiting acts.  This suggests that punitive damage awards may be adopted into China's intellectual property (IP) protection framework.

Liability for infringement can be compensatory or punitive, depending on the purpose of the compensation to be granted.  According to the current Patent Law, Trademark Law and Copyright Law of the P.R.C., the amount of compensation is determined by the basis of compensation and is calculated in accordance with the actual losses suffered by the rights owner or the benefits obtained by the infringer (and by reference to the reasonable multiples of the royalties in a patent infringement case), and while neither of the two elements could be determined, a People's Court can award a statutory compensation amount within the scope provided by the law.

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作者：矫鸿彬 金杜知识产权组

2011年12月，中国国家知识产权局副局长贺化在全国外商机构保护知识产权座谈会上表示，今后一段时期，中国将加快修订有关法律法规和规章，将推进专利法、商标法、著作权法等法律及配套法规的修改，提高罚款数额，研究引入对营利性故意侵权和假冒伪劣行为的惩罚性赔偿制度。这表明，惩罚性赔偿制度将有可能被引入中国的知识产权保护体系中。

从赔偿的目的来看，侵权赔偿责任可以分为补偿性责任和惩罚性责任。根据中国现行的专利法、商标法和著作权法的规定，侵权赔偿数额的确定是以补偿性为原则，按照权利人所受到的实际损失或者侵权人所获得的利益确定（专利侵权案件中还可以参照专利许可使用费的倍数合理确定），二者均难以确定的情况下，则由人民法院在法律规定的范围内确定法定赔偿数额。

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by Feng Ai and Chen Xunan  King & Wood's Finance Group

In the process of an Initial Public Offering ("IPO"), the issuer's intellectual property ("IP"), such as trademarks, patents, copyrights and know-how, is often directly related to the issuer's competitive advantage and long term profitability. The Examination and Verification Committee of the China Securities Regulatory Commission ("Examination and Verification Committee") often takes this fact into consideration.

I. IP Issues Arising from A share IPOs within Legal Framework

This article focuses on IP rights from the perspective of A share public offerings, and particularly on trademark, patent, know-how and copyright issues that have caught the attention of the Examination and Verification Committee.

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作者：冯艾  陈旭楠 金杜律师事务所融资组

A股首发上市（Initial Public Offerings，简称“IPO”）过程中，发行人的商标、专利、专有技术、版权等知识产权（Intellectual Property，简称“IP”），直接关系到发行人的核心竞争力、持续盈利能力等，历来为审核部门的关注重点。

一、A股IPO法律规范框架内的IP问题

本文侧重探讨的，系A股IPO法律规范框架内，被审核部门特别关注的商标、专利、专有技术、版权等广义的IP。

A股IPO法律规范框架内，与IP相关的核心规定主要散见于《首次公开发行股票并上市管理办法》、《首次公开发行股票并在创业板上市管理暂行办法》、《中国证券监督管理委员会股票发行审核委员会审核工作指导意见》等规范性文件。

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By King & Wood's Trademark Group

In March, the leading domestic industrial recorder enterprise Hangzhou Pangu Automation Systems Co., Ltd. ("Pangu Ltd.", 杭州盘古自动化系统有限公司) found that searching on www.baidu.com ("Baidu", 百度公司) for "Pangu recorders (in Chinese)" etc. returned results heading "Pangu recorder professional manufacturer Hangzhou Mengkong instruments www.mkong.com.cn (in Chinese)", and clicking the link leads to the website of Hangzhou Mengkong Instrument Technology Co., Ltd. ("Mengkong", 杭州盟控仪表技术有限公司).

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作者：金杜律师事务所商标组

今年3月，国内工业记录仪龙头企业杭州盘古自动化系统有限公司，发现在百度网站www.baidu.com搜索“盘古记录仪”等时，返回的搜索结果的第一条的标题为“盘古记录仪专业生产厂家，杭州盟控仪表www.mkong.com.cn”，点击后即进入杭州盟控仪表技术有限公司)的企业网站。

盘古公司早在2002年10月14日就已经在“集成仪表；工业自动化控制系统”商品上注册了“PG图+PANGU+盘古”文字图形组合商标（如下图所示）。

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King & Wood's Intellectual Property Group

In recent years, the world has witnessed several milestone events signaling the arrival of a new generation of global internet companies. Apart from the much-hyped dawn of social media, there is a much broader trend taking place, one that has outgrown the traditional boundaries of the tech sector itself. “In short,” as Marc Andreessen wrote in a recent Wall Street Journal column, “software is eating the world.” As corresponding developments are happening in China, this new era has caused and will continue to cause dramatic implications on the monitoring and enforcement of intellectual property rights in the country.

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By King & Wood's Trademark Group

There has been a long debate on whether an unregistered trademark can be the subject of a franchise contract in China. Proponents argue that an unregistered trademark is the franchiser's property and is thus eligible for being franchised so long as it is of economic value in the eyes of the franchisee. Opponents of this argument see an unregistered trademark as not legally owned by a franchiser without going through the trademark registration process and therefore not eligible for being licensed in a franchise contract. The Regulation on Administration of Commercial Franchises ("Regulation on Franchises") (商业特许经营管理条例) enacted by the State Council of the PRC on February 6, 2007, while clearly including registered trademarks, enterprise marks, patents and know-how into the checklist of business resources that a franchiser "possesses" for franchising, fails to touch on the issue of unregistered trademarks. However, it leaves room by putting the catch-all of "any other business resource" undefined.

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金杜律师事务所商标组

未注册商标能否成为特许经营合同标的？长久以来争论不休。正方观点认为，未注册商标是特许人的无形财产，只要被特许人认可其经济价值，即可成为特许标的。反方观点认为未经注册，特许人未在法律上获得商标所有权，因此未注册商标不能作为特许人的经营资源而被许可给他人。国务院2007年2月6日颁布的《商业特许经营管理条例》明确把注册商标、企业标志、专利、专有技术列为特许人拥有的可许可给其他经营者使用的经营资源，但并未提及未注册商标。不过，与此同时，该《条例》又以“等经营资源”的表述方式留出解释空间。

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By Xianjie Ding and Di Yao King & Wood's IP Legal Group

New developments in e-commerce regulation bring the issue of intellectual property infringement and the liability of e-commerce operators to light. A landmark case in China removed the defence of the "Safe Harbor Principle" for the first time, and should serve as an admonition to online platforms

The rise of e-commerce in China

In 2011, the e-commerce business in China underwent major changes. After significant amounts of private equity (PE) investments and many successful initial public offerings (IPOs) on the New York Stock Exchange (NYSE) or NASDAQ, e-commerce operators have increased resources to develop their business strategies. They are no long playing a neutral role by providing a merely technical and automatic processing of the data (for example, merely providing space for a blog, etc.) but marketing aggressively as a real internet value-added service provider (for example, providing services in building up or optimising a member's own website, etc.). This change in role will lead to great legal challenges in the future in the area of trade mark infringements committed on an e-commerce operator's platform. This article will introduce two high-profile online trade mark infringement cases in both the EU and China, and offer an analysis of the implications on the development of e-commerce.

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金杜律师事务所知识产权组

历时三年之久的麒麟协和食品株式会社与陈某某、王某商标权转让合同纠纷一案日前终于一审审理终结。原告麒麟协和食品株式会社是“可得然”中文商标的商标权人，由上海欧卡内实业有限公司（“欧卡内公司”）代理其在中国销售可得然胶。2006年3月，被告欧卡内公司法定代表人陈某某向国家商标局抢先申请注册“可得然”的英文译音“CURDLAN”商标。双方于2007年签订《商标权转让合同》，约定被告将“CURDLAN”商标以2000美元的价格转让给原告。2008年5月，国家商标局以“转让人使用的签字与以前在商标局办理商标事宜时使用的签字明显不符”为由，要求原告补充提供转让人的身份证件（复印件）以及经公证的转让人同意转让的声明，因被告一直未予提供，导致商标局对“CURDLAN”商标转让不予核准，原告诉诸法院。

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King & Wood's Trademark Group

After a three-year trial, the case of Kirin Kyowa Foods Co., Ltd. vs. Chen and Wang over a trademark assignment contract has currently been decided by the first instance. Kirin Kyowa Foods Co., Ltd. (the "Plaintiff"), as the proprietor of the trademark "可得然", appointed Shanghai Aucane Enterprise Co., Ltd. ("Aucane") as its sales agent for gelatine bearing the "可得然" trademark. In March 2006, Chen (the "Defendant"), the legal representative of Aucane, preemptively filed an application for registration of "CURDLAN", which is the English equivalent of the "可得然" trademark at the China Trademark Office (the "TMO"). In 2007, both parties signed a Trademark Assignment Contract (the "Contract"), requiring the Defendant to assign the trademark "CURDLAN" to the Plaintiff at the price of US$2,000. In May 2008, the TMO took office action on the grounds that "the assignor's signature is evidently inconsistent with the one filed with the TMO in the past", and required the Plaintiff to provide a copy of the assignor's ID card and its notarized statement of agreement on the said trademark assignment. However, the Defendant failed to provide any of the above materials, causing the TMO to refuse the assignment of "CURDLAN", and thus the Plaintiff appealed to the court.

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King & Wood's Trademark Group

On November 9, 2011, the China Trademark Office (the "TMO") has partially adjusted its official website for the purpose of facilitating the public in browsing and searching information about recordal of pledges of exclusive rights to registered trademarks. The adjustments are in respect of the place of the information, the means of disclosure and the items of disclosure.

Thanks to such adjustments, the public may directly search whether the exclusive right of a registered trademark is pledged in the column "Use of Trademark Rights" on the TMO website, including name of the pledgor, name of the pledgee, the registration number of the pledged trademark, and validity period of the pledge. Moreover, the pledge information in e-charts has changed to web links below which the public may find a collection of information of pledges as of November 2009.

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金杜律师事务所商标组

2011年11月9日，商标局对“中国商标网”商标专用权质权登记信息公示页面进行部分调整，以方便公众进行网页浏览及查询。具体涉及信息公示的位置、方式和内容等方面的调整。

本次调整后，公众如需了解某个商标是否存在质押登记，可直接在“中国商标网”的“商标权运用”一栏中查询相关信息，包括“出质人名称”、“质权人名称”、“出质商标注册号”、“质权登记期限”等。另外，质权登记信息由表格页面调整为链接页面，并将2009年11月至今的登记信息在该链接下汇总。

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作者：楼仙英 姚迪 金杜律师事务所知识产权组

新修订的《中华人民共和国专利法》（1）（“专利法”）和《中华人民共和国专利法实施细则》（2）（“实施细则”）中对职务发明中发明人奖励与报酬进行了修改，在鼓励技术创新实现产业化的大背景下，这种改进充分发挥了制度在鼓励科技开发与技术创新以促进社会生产力发展方面的积极作用，但同时，特别是在日本蓝光案以7千万人民币和解结案的情况下，它也无疑给用人单位在技术创新方面的奖励和报酬管理制度上带来了一定的影响与挑战。

例如，根据《实施细则》第七十六条的规定，被授予专利权的单位可以与发明人约定或者在其依法制定的规章制度中规定奖励、报酬的方式和数额。因此，很多公司便纷纷在劳动合同中约定或在公司规章制度中规定，“双方确认并同意雇员的奖励和报酬包括在工资中”或“双方确定并同意雇员不要求任何奖励和报酬”等。其认为，只要合同基于双方意思自治，就不会存在风险。但在对各国职务发明制度进行比较研究后，我们认为这样的安排有很大风险，现分析如下：

为方便讨论上述问题，先简化问题如下：若雇主基于雇员的职务发明获得的巨大商业利润与雇员所获得的奖励与报酬完全不符时，雇员是否有权请求法院或仲裁机构变更或撤销合同，并请求额外的奖励和报酬？

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By Cecilia Lou and Steven Yao King & Wood's Intellectual Property Group

The Patent Law of the People's Republic of China(1)("Patent Law") and Regulations for the Implementation of the Patent Law of the People's Republic of China(2) ("Implementing Regulations") has drawn our attention to rewards and remuneration for inventors. The Patent Law stipulates that employers must pay reasonable rewards and remuneration to inventors of a service invention and the Implementing Regulations explicitly address the amount payable. For purposes of encouraging technological innovation and industrialization, the change is sure to play a positive role in motivating employee initiatives and promoting social productivity. However, it will also bring certain challenges to many employers in terms of compliance with reward and remuneration issues in China, especially when the Blue LED case in Japan resulted in a 70 million RMB settlement.

The key issue of concern to employers is: Whether the huge commercial benefits acquired by the employer based on a service invention made by its employee do not correspond to the remuneration received from the employer due to the creation of the service invention agreed in the remuneration clause in China, whether the employee shall be entitled to request the court to modify or even revoke the remuneration clause and request some additional remuneration?

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by Cecilia Lou and Yao Di of King & Wood's Intellectual Property Group

It is not uncommon to receive unsolicited emails from domain registrars warning of imminent domain registrations by third parties. Generally, this email is a means by which some registrars solicit business in China. In many cases there is no actual third party attempting to register the domain in question.

When receiving such domain name emails we suggest that clients consider the following measures:

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by Alex Zhang King & Wood Intellectual Property Group

As the second largest economy in the world, China is emerging to the center of the world's economic stage. This emergence has been accompanied by constant changes in its legal and economic sectors. The intellectual property sector also has witnessed numerous recent changes. There have been significant new advances in China's national innovation policies. New trends in Chinese patent filings have emerged. A growing number of Chinese companies are creating their own IP and increasingly filing infringement suits against foreign companies and their local competitors in China. China's third patent law amendment has materially changed patent practice and procedures in that country.

These changes and trends will have profound impacts on foreign companies doing business in China, especially in intellectual property areas. What are the best ways to deal with these important changes? The following several considerations should be evaluated in determining a company’s patent strategies in China.

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By King & Wood's Intellectual Property Group

Whether service trademarks used by shopping malls and supermarkets can be registered in International Class 35 and receive protection as a registered trademark is rigorously debated both academically and in judicial practice in China.

Opponents argue that the China Trademark Office (CTMO) has clearly stated that wholesale and retail services are not included in Class 35, and thus the services of shopping malls and supermarkets cannot be classified as such (the CTMO published this in their official written reply to Sichuan Provincial Administration for Industry and Commerce, "Reply to the Issue of Whether Shopping Mall and Supermarket Services are Included in Class 35" on August 13, 2004). Furthermore, it stated that the contents of "sale promotion (for others)" refer to providing advice, planning, promotion and consulting for others to sell goods or services. As a result of the Reply, even if a trademark is registered under "sales promotion (for others)", such marks of wholesale and retail enterprises, such as department stores, supermarkets, wholesale markets, can hardly be effectively protected by China's Trademark Law.

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金杜律师事务所知识产权组

在中国大陆的理论和司法实践中对用于商场、超市的服务商标可否获得注册保护以及是否应在国际分类第35类注册存在较大分歧和争议。

反对者认为，商标局曾于2004年8月13日在致四川省工商行政管理局《关于国际分类第35类是否包括商场、超市服务问题的批复》（“《批复》”）中已明确澄清第35类不包括商品的批发、零售，商场、超市服务不属于该类别。‘推销（替他人)’服务的内容是指为他人销售商品(服务)提供建议、策划、宣传、咨询等。显而易见，按照此《批复》，百货商场、超市、批发市场等批发、零售企业即使在“推销(替他人)”服务项目上注册其商标，也不能得到中国《商标法》的有效保护。

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By King & Wood Intellectual Property Group

Liu Zhaolong, a Chinese national, was found to have purchased raw wine, bottles, bottle caps, labels, bottle capping equipment and other illegal materials and tools, and manufactured counterfeit wines imitating Chivas, Remy Martin, Ballantine's, Jack Daniels, Martell, Hennessy, Royal Salute and other famous wine brands. Liu filled the counterfeit wines and distributed them to several cities in China, the illegal turnover of which has been over RMB 200,000 (around US$31,250). As a result, Beijing Daxing District Court found that Liu Zhaolong had violated the provisions of Article 213 of the Criminal Law of China and committed the crime of counterfeiting a registered trademark.

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金杜律师事务所知识产权组

因未经注册商标权人许可，自行购买原料酒、酒瓶、酒盖、标签、封盖机等原料和犯罪工具，通过灌装方式假冒芝华士、人头马、百龄坛、杰克丹尼、马爹利、轩尼诗、皇家礼炮等著名洋酒，销往全国数个城市，非法经营额达到20余万元，刘兆龙被北京市大兴区人民法院认定触犯中国《刑法》第213条，构成假冒注册商标罪。

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By King & Wood's Intellectual Property Group

Pursuant to the judicial interpretations enacted by the Supreme People's Court of China in February 2008, if a prior registered trademark owner files an infringement lawsuit against the use of a latter registered trademark, courts will refuse to accept the case. The prior trademark registrant must first initiate a trademark dispute action with the China Trademark Review and Adjudication Board (TRAB) to invalidate the latter registered trademark. The are various reasons that may prevent the latter registered trademark from being invalidated within a short period of time, making it difficult for the prior registrant to prevent continued infringement by the latter mark in a timely manner.

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金杜律师事务所知识产权组

根据中国大陆最高人民法院于2008年2月作出的生效司法解释，依据在先注册商标对在后注册商标的使用提起商标侵权诉讼的，法院不予受理，在先权利人应首先向商标评审委员会请求撤销在后申请的注册商标。这种情况导致权利人在基于各种原因无法及时撤销在后注册的侵权商标的情况下，很难制止其使用。

但是，如果在侵权注册商标的申请日之前，权利人对相同、近似商标享有其他种类的在先民事权利，比如，著作权、企业字号权、肖像权、姓名权、外观设计专利权等，权利人可依据该在先权利对侵权注册商标的使用直接提出侵权之诉，同样可达到制止后者使用的目的。

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by Yang Hua  Connie Zhuang     King & Wood's Intellectual Property  Group

On September 2, 2011, the Legislative Affairs Office of China's State Council released a circular seeking public comments on proposed revisions to the Trademark Law of the People's Republic of China (the "Draft Revisions").

The most notable amendments in the Draft Revisions are provisions aimed at preventing bad faith filings and changes to the trademark opposition procedures.

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金杜律师事务所知识产权组

2011年9月2日，《中华人民共和国商标法》（修订草案征求意见稿，“修订草案”）已由国务院法制办公室向社会公布，公开征求意见。

“修订草案”中最为瞩目的修改内容包括制止恶意抢注方面的规定以及商标异议程序的变化。

“修订草案”规定，如商标申请人与权利人因存在合同、业务往来、地域关系或其他关系而知晓权利人在中国大陆在先使用的商标却恶意申请，即使权利人的商标在中国大陆尚未因足够的使用已产生一定影响，也可能得到保护；而且，如权利人的商标显著性较强且具有一定影响，可阻止他人在非类似商品上抢注与之容易导致混淆的商标。前述规定对制止当前较为猖獗的违反诚实信用原则的恶意申请具有一定的作用，但尚不能完全解决所有问题。

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By King & Wood's Intellectual Property Group

China’s State Intellectual Property Office (SIPO) is able to issue compulsory patent licenses where an entity or individual who is otherwise qualified to exploit a patent does not succeed in obtaining a license on  reasonable terms and within a reasonable period from the patent holder. The new Patent Law of the PRC (the “Patent Law”) and the Implementing Rules of the Patent Law of the PRC (the “Implementing Rules”) both contain provisions regarding the compulsory licensing of patents. On October 12, 2011, the SIPO issued a circular to solicit public comments on the Amendments to the Measures on Compulsory Patent Licensing (Draft for Comments) (the “Draft Amendments”). The SIPO will be taking comments until November 13, 2011.

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金杜律师事务所知识产权组

在中国，具备实施条件的单位或个人不能以合理条件或在合理期限内取得专利权人许可的情况下，国家知识产权局可以对该专利实施强制许可。中国专利法和专利法实施细则都规定了专利强制许可。国家知识产权局于2011年10月12日发布通知，就《专利实施强制许可办法修订草案（征求意见稿）》（办法草案）于11月13日前向社会各界征求反馈。

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By King & Wood's Trademark  Practice

Trademarks should be registered wherever the products that carry those trademarks go. This has become a motto for exporters in Yixing. According to preliminary statistics conducted by local authorities, over 200 trademarks have been registered abroad, and the number of such trademark owners increase from 10 to more than 20 in Yixing.

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By King & Wood's Trademark  Practice

Recently, Beijing First Intermediate People’s Court has accepted an administrative lawsuit lodged by LOUIS VUITTON MALLETIER (the "Plaintiff"), against the China Trademark Review and Adjudication Board ("TRAB") with respect to its decision regarding the trademark "LV and 郎人LANGREN" (the "Mark") applied for by a local private company of "eyeglass chains, etc." in Class 9.

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By Miao Qu of King & Wood's Intellectual Property  Group

This article continues to discuss Core Intellectual Property Issues in M&A and Investment. The first part of this article was published on Chinalawinsight on September 2011.

V. The Effect of the M&A on the IP Rights Agreements of the Acquiree

During the due diligence in a merger, special attention should be paid to the effect of the investment or merger on the intellectual property rights of the acquiree, especially the effect on license contracts. Two common problems are when the acquisition triggers a clause in a license contract changing control in a way that alters the effectiveness of the agreements, or some other clause in the agreements hinders future business of the acquired entity.

Case 5: A transnational company intended to purchase the domestic mobile communication department of another transnational company. During the due diligence investigations, we found a license contract between the acquiree and a state-owned enterprise ("SOE"). In this contract the acquiree licensed the core technology of the department to the SOE for exclusive use, and ensured that the core technology would not be transferred or licensed to any third party in specific locations. We contacted the management team of the acquiror and learned that the acquiror intended to transfer the technology to other domestic entities of the acquiror for implementation and management pursuant to its business framework. Therefore, we advised the acquirer that the acquiree should negotiate with the SOE to amend the license contract to ensure that the business could operate according to plan after the transaction.

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作者：瞿淼 金杜律师事务所知识产权组  

本文分两部分刊登， 2011年8月8日金杜法律博客（Chinalawinsight)刊登的了本文的第一部分。文章第二部分将继续对《投资并购交易中需要警惕的知识产权问题》进行解读。

五、并购行为对被收购方知识产权相关协议的影响

 在投资并购的尽职调查过程中，还需要特别注意投资及并购行为对一些知识产权权利可能产生的影响，尤其是对许可协议可能产生的影响。常见的情形有，收购导致触发控制权变更条款，从而可能影响协议的效力；或者协议原有的一些条款可能造成收购主体未来业务经营的妨碍。

案例五：某跨国公司拟整体收购另一跨国公司在中国境内的移动通讯业务部门。在尽职调查的过程中，我们发现被收购方曾与一国有企业签订一份许可协议，将该业务部门的核心技术许可该国有企业在中国进行排他性地使用，且承诺将不会将此技术在许可地域内转让或许可给任何第三方。知识产权律师应与收购方管理团队进行及时沟通，了解该公司的业务架构，明确收购方拟将收购获得的技术转让给收购方在中国的其它主体进行实施和管理。因此，应建议收购方在签署交易合同之前，由被收购方与被许可的国有企业协商修改许可协议，以保证交易后业务能够按计划运作。

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By King & Wood's Trademark  Practice

The Tort Law of People's Republic of China was adopted on December 26, 2009, under which the IP rights, including copyrights, patent rights, and exclusive rights to use trademarks, are protected as individual rights and interests. Wang Shengming, vice-chairman of the Legislative Affairs Commission under NPC, commented, "Tort Law provides supplementary reference to the protection of IP rights."

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By King & Wood's Trademark  Practice

The mark "日本電產" (Japan Densan in Chinese Characters) is also the short form of the enterprise name of its owner Nippon Densan Corporation (now Nidec Corporation). As a trade name, it is unique and distinctive. However, when being filed for registration as a trademark, "日本電產" ("Japan Densan in Chinese Characters") must also bear the distinctiveness that is required of a trademark.

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By King & Wood's Trademark  Practice

Nokia opposed a trademark application to register "VERTU" under Appn. No. 3084613 which covered "spectacles [optics]; eyeglass cases, etc." in Class 9 filed by an individual. Both the China Trademark Office ("CTMO") and Trademark Review and Adjudication Board ("TRAB") denied the opposition. Nokia appealed before the Beijing First Intermediate People's Court asserting that:

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作者：楼仙英、 俞涤清 金杜律师事务所知识产权组

职务发明是企业的重要无形资产之一，如何区别职务发明和非职务发明极为重要。《专利法》(1)和《合同法》对职务发明都作了原则性的规定，但现实中许多问题无法从法条中直接获得解答，比如，哪些发明人是职务发明意义上的“员工”，“职务”如何解释等问题。所以，以职务发明为争议点的确权诉讼不胜枚举。本文通过案例的分析，归纳出认定职务发明的要点，并从企业的角度出发提出一些预防纠纷的建议。

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by Cecilia Lou and Vincent Yu of King & Wood's Interllectual Property Group

Service inventions created by employees ("Service Invention") are valuable intangible assets for employers, which makes it important to distinguish Service Invention from non-service invention. The Patent Law of the People's Republic of China ("PRC Patent Law")(1)provides a rudimentary definition of Service Invention leaving many questions unanswered, such as what is the definition of "employee" for purposes of defining Service Invention, and what "tasks of the Entity" should include. Due to those uncertainties, many disputes arise as to the ownership of the right to patent inventions. This article summarizes the requirements and burden of proofs of Service Invention by analyzing actual cases, followed by a comprehensive strategy to avoid those disputes from the perspective of an employer.

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作者：瞿淼 金杜律师事务所知识产权组

随着市场经济体制的完善，缓慢的自我积累难以满足企业筹资发展的需求，越来越多的企业选择进行投资及并购实现快速的业务扩张。在并购及投资交易中，企业的知识产权状况是并购双方关注的焦点之一。为了充分认识和评估并购交易中的法律风险，避免出现“并购后遗症”类型的纠纷，本文中总结了几种具有典型意义的并购中的知识产权问题。

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作者：何薇、王亚西 金杜律师事务所争议解决组

域名具有标识功能，当域名与他人在先拥有的商标、企业名称或其他民事权益发生冲突时，这些在先权利的权利人（以下简称“权利人”）的法律救济途径有两条：一是向域名争议解决机构投诉，二是向法院起诉或向仲裁机构提起仲裁（基于双方之间达成的仲裁协议）。通常情况下，出于控制成本和节省时间的考虑，权利人会首先选择域名争议程序，当然前提是被抢注的域名注册时间不超过两年。但在域名争议解决程序进行中，或者专家组作出裁决后，投诉人（即权利人）或者被投诉人（即域名持有人）均可以就同一争议向中国互联网络信息中心所在地的中国法院提起诉讼，或者基于协议提请中国仲裁机构仲裁。对于域名争议解决中心已经作出裁决，被投诉人又向法院起诉的，则面临域名争议裁决与司法裁判的衔接问题。笔者提出下面两个问题，旨在抛砖引玉，希望引发更多的探讨。

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By He Wei and Wang Yaxi of King & Wood Dispute Resolution Group

When a domain name is in conflict with the prior rights of others (e.g. the trademark rights, the rights of the company name, etc.), there are two approaches of settling the disputes: 1) the prior right holder may file a complaint to one of two domain name dispute resolution centers, or 2) the prior right holder may bring an action to the court or refer the dispute to arbitration. For the sake of efficiency and cost control, the prior right holder will typically seek a resolution from a domain name dispute resolution center(1)("DNDRC"), on the condition that the disputed domain name has been registered for less than two years.

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By Denning Jin, Helen Chen of King & Wood' s Dispute Resolution Group and Shanghai Office

Background

A number of automobile design patent infringement cases have been brought to Chinese courts in recent years, such as Honda v. Hebei Shuanghuan, FIAT PANDA v. Great Wall PERI, Neoplan v. Beijing Zhongtong Xinghua Automobile Selling Co., Ltd., et al. The hallmarks of these cases are not only the high value of the damages claimed and the importance of the outcomes which are dispositive to the market structure, but also the malleability of rule of law in the field of design patent infringement determination.

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By Richard W. Wigley of King & Wood's Intellectual Property Group

Today in China, in conjunction with World IP Day 2011, numerous governmental agencies will actively begin a week-long promotion of the role of intellectual property in the nation’s economy, according to Han Xiucheng of the State Intellectual Property Office (“SIPO”)¹. Such efforts are to be lauded, but it is well known that copyright piracy rates in China are still significantly higher (80-90+%, depending on the type of work) than those seen in developed countries, such as the United States. Copyright piracy results from a combination of factors, including not only the effectiveness of the enforcement regime, but also from consumers’ attitudes toward pirated works. There has been a shift in recent years in China away from pirated works and toward legitimate works, but this shift has been slow due to a variety of reasons. Into this dynamic, it is valuable to look at some of the most recent efforts of the P.R.C. government to reduce copyright piracy across China.

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By King & Wood'sTrademark Practice

A Chinese company has applied for registration of the mark “吉百利”(Cadbury in Chinese) on fertilizers. Cadbury brought a lawsuit after it failed in both opposition and review proceedings.

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By King & Wood's Trademark Practice

The Law of the Application of Law for Foreign-related Civil Relations of the People's Republic of China was promulgated on October 28, 2010 and will come into force on April 1, 2011. The new law absorbs the latest achievements of the research and legislation in the field of the private international laws, which is widely viewed as having reflected the contemporary legislation ideas and incorporated innovative rules, and the issuance of this law would have accomplished the systemization and modernization of the conflicting rules concerning foreign-related relations in Chinese legislation system.

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By King & Wood's Trademark Practice

On December 16, 2009, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) of the People's Republic of China announced that it approved the registration of Cognac as a geographic indication, which is the first foreign geographic indication protected in China. On October 9, 2010, Scotch whisky was also recognized as a geographic indication, as a result of three-year discussion between the Scotch Whisky Association and the Chinese government. This will provide better protection for Cognac and Scotch whisky in China, which will also guarantee purchase of genuine Cognac and Scotch Whisky to the local consumers.

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By Richard  Wigley of King & Wood's Intellectual Property Group

China's packaged software market is estimated to "grow from $4.7 Billion in 2008 to $8.3 Billion by 2013, with a five-year CAGR of 12.1%"¹. China's domestic software industry has, however, long suffered from the effects of rampant software piracy, making it difficult for domestic industry players to proportionally benefit from China's economic rise over the past 30 years. Though the trials and travails of major global software companies, such as Microsoft, in China have been well-documented, domestic software companies, though with a seeming "home market" advantage, have often found it difficult to build viable business models in this environment. This environment for domestic software companies, however, appears to be changing for the better.

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By Richard Wigley and Chen Wenping of King & Wood's Intellectual Property Group

There has been a great deal of interest lately - both from inside and outside of China - in P.R.C. governmental policies aimed a promoting "indigenous innovation". In an April 2010 publication entitled "2010 Notification Regarding the Development of Determining ' Indigenous Innovation' Products (Draft Seeking Opinions)"  (hereinafter referred to as the "2010 Notification"), and jointly issued by the Ministry of Science and Technology, the Commission for Development and Reform, and the Ministry of Finance, some government initiatives in this regard were addressed. While it makes perfect sense for any country to promote "indigenous innovation" as a means of economic growth, it is valuable to look at one measure of  "indigenous innovation" --- invention patents. Specifically, it is valuable to look at the growth in recent years of invention patents granted in China, as just one indicator of  "indigenous innovation".

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By Richard  Wigley of King & Wood's Intellectual Property Group

As much as one may love to sit down with a nice hardcover book from one's favorite author, those days are changing, like much else in our lives in the digital age. The transition from obtaining information via traditional books to digital readers is growing around the world. It is estimated by DisplaySearch that the number of digital readers in China had grown to "3 million in 2010, which [] account[ed] for 2% of the global market." ¹ Aside from the current market leader globally, the Amazon Kindle, numerous Chinese manufacturers have also entered this marketplace with competing products, ² including many "shanzhai" or imitation products. ³ It is indeed a market with promise, even more so when one considers that with over 400 million internet users in China⁴ and well over 200 million users in China accessing the internet via mobile phones,⁵ the means to access e-books via various devices will only continue to grow.

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By Richard  Wigley of King & Wood's Intellectual Property Group

Hollywood and Hong Kong film studios have long struggled to monetize their content in China. Though revenues from traditional movie theaters are growing rapidly, the real action may be found in the online market, where Chinese youth prefer to obtain their entertainment (i.e. film and television programming). How then can a content owner best take advantage of this rapid movement to online viewing in today's China?

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By King & Wood's Trademark Practice

Foreign companies often have concerns regarding whether the litigation process in an overseas venue will be efficiently handled by the relevant courts. In China, given the large increase in IP-related lawsuits in recent years, this is a reasonable concern. In 2009, P.R.C. courts had concluded 6,262 cases with a yearly increase of 31.89%. ¹With such an upsurge in litigation, the P.R.C. courts have faced a very significant challenge.

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By King & Wood's Trademark Practice

Since 2005, several kinds of fake drinks trademarked "RED BULL" have appeared in the market across China. After 5 years of tough fighting, the real "RED BULL" now is very close to the victory in a vital battle.

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By Richard  Wigley of King & Wood's Intellectual Property Group

Online infringement of copyright works in the P.R.C. has been a major problem for rights holders since the advent of the Internet. High rates of infringement have presented real challenges to content owners hoping to monetize their content in China's fast-growing online world. While civil, administrative and criminal actions are all available as possible means of seeking recourse and establishing deterrents, in practice, they all have distinct advantages and disadvantages. In the case of bringing criminal action against alleged copyright infringers, establishing that the alleged infringers qualify for criminal prosecution has at times proven problematic. Some additional assistance to rights owners, however, is now available.

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By King & Wood'sTrademark Practice

No.	Trademark	Owner	Class	Goods / Service
1		Sony Kabushiki Kaisha (Also Trading As Sony Corporation)	9	Cinematographic apparatus; sound and image recording, transmitting and reproducing apparatus; data processing apparatus; computer
2		Martell & Co	33	Alcoholic drink
3		Bayerische Motoren Werke Aktiengesellschaft	12	Automobiles, motorcycles and parts thereof
4	(Remy Martin in Chinese)	E.Remy Martin & Co.	33	Alcoholic drink (except beer)
5		Sheraton International, Inc.	43	Hotel
6		Yahoo! Inc.	42	Providing internet search engine
7		Apple Inc.	9	Computer; portable computer
8		TOTAL SA	4	Industrial oil and grease; lubricant oil
9	(Honda in Chinese)	Honda Giken Kogyo Kabushiki Kaisha	12	Sedan; motorcycle; electrical vehicles
10		Toyota Motor Corporation	12	Automobiles
11	(Kewpie in Chinese)	Kewpie Kabushiki Kaisha.	30	Mayonnaise; salad dressings
12		Kabushiki Kaisha Kenwood (Also Trading As Kenwood Corporation )	9	Wireless audio and video devices, etc.
13		Toto Ltd.	11	Transparent sanitary ceramics; taps; water supply and sanitary parts and fittings, etc.
14		HOYA CORPORATION	9	Eyeglasses, eyeglasses lenses, etc.
15		MONDO SPA	28	Plastic track

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By King & Wood'sTrademark Practice

In September 15, 2010, WIPO released the World Intellectual Property Indicators for 2010. According to the report, the global financial crisis has affected the innovation activity in 2008 and 2009 and the growth data shows a slowdown. Yet China has shown strong growth in trademark filings. While total trademark applications worldwide fell by 0.9% in 2008, China saw 20.8% growth. The total number of trademark registrations worldwide grew by 7%, which China accounted for around 90% of the growth.

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By: Richard Wigley ofKing & Wood 's Intellectual Property Group

Perceptions (and Misperceptions) of IPR Lawsuits in the P.R.C.

There is no question that many foreign companies operating in the People's Republic of China struggle with the protection of their intellectual property rights ("IPR"). The concerns of companies with protecting their valuable IPR in a developing country such as the P.R.C. are legitimate and serious. Though many of the executives and attorneys of these companies may view themselves as "old China hands" and have many years of experience in fighting to protect their IPR in the P.R.C., many more are relative newcomers to China and their views of IPR protection are shaped by not only their own experience, but by the perceptions of others, which may or may not be valid. For instance, some overseas business executives or legal counsel on occasion may voice their view that pursuing litigation as a foreign firm against a P.R.C. company over an alleged infringement in a P.R.C. court is a waste of time and money, as either they have little chance of prevailing, or, if they should prevail, the damages awarded will be so small as to not provide any substantive deterrent. Though every alleged infringement is case-specific, it is, however, useful to separate the perceptions (and misperceptions) from the realities of foreign-related IPR litigations in the P.R.C.

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韦理察 金杜知识产权部

背景：

在中国，较高的知识产权侵权率在近些年越来越受到中国境内外知识产权权利人的关注。尽管中国仍然是一个发展中国家，但是如此高的侵权率还是在一定程度上反映了中国经济体制存在的问题，这些侵权现象恰恰是中国经济发展的绊脚石。

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By Richard  Wigley of King & Wood's Intellectual Property Group

Background on the Campaign

High rates of intellectual property rights (“IPRs”) infringement in China have in recent years been of increasing concern to foreign and domestic rights holders alike. Though, as China is a developing country, such high rates of infringement are, arguably, to some extent an economic structural issue, these infringements are seen as an impediment to China’s economic growth prospects. Furthermore, China has an obligation as a signatory of TRIPs (Agreement on Trade-related Aspects of Intellectual Property Rights) to maintain an effective regime for the protection of IPRs.

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By Susan Ning, Huang Jing and Angie Ng, King & Wood's Competition Group

On 14 October 2010, the PRC National Copyright Administration (NCAC) published two pieces of regulations (the regulations) which govern the collection of copyright royalties for movies provided on the Internet, on flights and on public transport.(1)   Recently there have been concerns from internet cafes that these royalties are unreasonably high.(2)   There has also been some discussion in the press that these alleged “high” royalties could constitute an abuse of intellectual property rights, in breach of Article 55 of the Anti-Monopoly Law (AML).(3)

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 By Kenneth Choy, Partner, King & Wood Hong Kong

Rhombus Hotel and Resorts is a Vancouver based group that owns and operates three boutique hotels in Hong Kong. They are planning to open a fourth one next year to be named “Hotel MO by Rhombus” that they described in their website as “a Modern and Outstanding boutique hotel” in the heart of the Western District in Hong Kong.  As part of the preparation for the hotel opening, they formed two Hong Kong companies, HOTEL MO LIMITED and HOTEL MO MANAGEMENT LIMITED. As they gear up for the opening, they encountered opposition from a major hotel group.

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 By Fu Haiying, Partner, King & Wood's IP Department

On April 24, 2009, the Changsha Intermediate People's Court (the "Court") made a judgment in Michelin Group vs. Tan Guoqiang and Ou Can. In this first instance, the Court ruled that the Defendants, tire dealers Tan Guoqiang and Ou Can, infringed upon the Plaintiff's exclusive right to use the registered trademark, "MICHELIN & Device," by selling imported Japanese-made tires (targeting the Brazilian market) without consent from the trademark owner and without obtaining a Chinese Compulsory Product Certification ("3C Certification").

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By Susan Ning, Huang Jing and Angie Ng, King & Wood's Competition Practice

We understand that the SAIC is currently working on draft guidelines (the guidelines) which will shed light on how Article 55 of the Anti-Monopoly Law (AML) will be enforced. It has been reported in the press that the SAIC has published a 4th draft of these guidelines and are currently consulting with the relevant stakeholders (we understand that these drafts are not publicly available).

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By Wang Rui, Qiu Shaolin, and Duncan Hwang, King & Wood's IP Practice

With the rapid growth of China’s online video gaming market, China has become a particularly appealing target market for both Chinese and foreign online game developers, particularly those developing Massively Multiplayer Online Role-Playing Games (MMORPG). In 2009, 35 imported online games obtained approval for release in China, and imported games have accounted for 38.8% of China’s CNY 25.8 billion online gaming industry.

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 彭荷月, 金杜律师事务所知识产权团队

自去年年底以来，我们陆续收到一些外国企业有关中国“自主创新”政策的咨询，他们对该政策存有不少顾虑，担心这项政策会强迫其将知识产权转移到中国，或者会限制外国企业与中国本土企业的竞争，影响其在中国市场的经营。

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 By Peng Heyue,  King & Wood's IP Department

Since the end of 2009, King & Wood has received regular requests from a number of foreign enterprises for advice on China's 'Indigenous Innovation' Policy. These firms are concerned that the new policy will either force the transfer of their IP rights to China or will influence their business operations in the Chinese market by limiting their ability to compete with local domestic firms.

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By Meng Xianghai, King & Wood's IP Department

Recently, an increasing number of opinions from the State Intellectual Property Office ("SIPO") indicate that applications for patent protection for some inventions do not fall under the scope provided in Paragraph 2 of Article 2 of the PRC Patent Law, which defines an "'invention' as any new technical solution relating to a product, a process, or improvement thereof." Thus, to understand what inventions can be patented, numerous terms such as “technical solution” must be properly defined.

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By Shi Yusheng and Xia Fan, King & Wood's IP Litigation Department

The newly promulgated Tort Law of the People's Republic of China came into force on July 1, 2010. The Tort Law, positions itself as a fundamental doctrine in the protection of one's civil and property rights in China. Intellectual property rights, such as copyrights, patent rights, trademark rights, are included in the scope of protection under the Tort Law. Accordingly, relevant provisions of the Tort Law will have substantial impact on  IPR infringement. While there are many intersects, one major impact is discussed below.

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By Kenneth Choy, Partner, King & Wood - Hong Kong

The United States Supreme Court finally issued its decision on Bilski v. Kappos just before it shut down for the summer. As widely expected, the justices unanimously agreed that the Bilski claims are abstract ideas which are nonpatentable and the Court of Appeals for the Federal Circuit properly rejected the claims. However, the court's decision, authored by Justice Anthony Kennedy, left many dissatisfied as it declined to clarify limitations on the patentability of business method claims. The high court simply rejected the Federal Circuit's view that the machine-or-transformation test was the exclusive test for patentable process claims and instead, looked back to the last century, to its cases of Gottschalk v. Benson, (1972), Parker v. Flook, (1978) and Diamond v. Diehr, (1981) to find the “guideposts” and §100(b) the Patent Act for the definition of “process”.

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By Kenneth Choy, Partner, King & Wood - Hong Kong

At times, an international company may find that their application for registration of a trademark is rejected by the Chinese Trademark Office. When this happens and all administrative appeals are exhausted, are there alternative means of brand protection available in China?

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By Li Ruihai and Su Juan, King & Wood's IP Department

Patent ownership disputes arise, when a party challenges the ownership of a patent right at the State Intellectual Property Office (SIPO) and files suit with the People's Court to seek rectification of the ownership of the patent. Article 135 of the General Principles of Civil Law of the PRC (Civil Law) provides that "unless otherwise stipulated by law, the statute of limitations to file civil actions with the People's Court shall be 2 years." The PRC Patent Law (Patent Law) provides no specific provision regarding the statute of limitations in patent ownership disputes. Hence, issue arises as to whether the court can, upon the defendant's request, dismiss the plaintiff's claim for patent ownership due to the statute of limitations for civil actions.

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By Mia Qu and Bessie Ye, King & Wood's IP Department

To many foreign companies, China remains attractive as the world's largest potential market for pharmaceutical products. As such products rely heavily on the protection of intellectual property rights, it is essential for foreign companies in this field to adopt a combination of IP protection methods to formulate a strategy for their products in China. To this end, China has established a relatively comprehensive legal system in relation to IPR protection where intellectual assets are protected by way of patents, trademarks, copyrights, and trade secrets.
 

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By Jiang Ling, Partner, King & Wood's Trademark Department

The term "works" used and protected under the Copyright Law refers to original intellectual creations in the literary, artistic and the scientific domain, in so far as they are capable of being reproduced in a certain tangible form. As for literal works, this refers to the works manifested in text form, no matter how long it is or what type or format of literature it uses. As long as it is original, it should be within the scope of protection by the PRC Copyright Law (as well as Trademarks as previously discussed). Therefore, it can be concluded that an advertising slogan is in principle not excluded from copyright protection on the condition that it is original. However, the Copyright Law does not define what "original" is. Judging by judicial practice, the expression of original works may not necessarily be unprecedented, and re-creation based on previous intellectual works of others is not forbidden either. In general, works possess originality as long as it is created by the author independently rather than plagiarizing others' works which bears some personalized characteristics. Thus, it is possible for slogans to be copyrighted.

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By Kenneth Choy, Partner, Corporate, King & Wood–Hong Kong

Hong Kong's Financial Secretary, the Hon. John C Tsang, gave his annual budget speech Wednesday, February 24th. Buried in the 178 paragraph speech on the 2010-2011 Budget Report were two paragraphs relating to intellectual property rights. The issues mentioned by the Financial Secretary may benefit inventors and high-tech start ups.
 

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By Kenneth Choy, Partner, Corporate, King & Wood–Hong Kong

The World Intellectual Property Organization, also known as WIPO, recently disclosed the number of international patent applications filed under its Patent Cooperation Treaty (“PCT”) for 2009. A copy of the release, entitled International Patent Filings Dip in 2009 Downturn (PR/2010/6), may be downloaded here. While the total number of PCT applications filed for the year was down compared to 2008, filings by applicants from East Asian countries actually grew with Japan, Korea and China ranking among the top five filing countries. Although the number of applications from the United States dropped by more than 11% to 45,700 applications, it still held its place on top of the rankings. Japan (2), Korea (4) and China (5) accounted for 45,839 PCT applications in 2009, about 30% of total filings

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By Jiang Ling, Partner, King & Wood's Trademark Department

Concise and vivid advertising slogans quickly draw the public's attention and are integral to a company's brand. Over years of use and promotion, some slogans have become well-known to the public, such as Nike's "Just do it",  Adidas' "Impossible is nothing" and DeBeers'  "Diamonds are forever." In many ways, such slogans are often no less important than the company's logo and other marks. As such, companies must figure how to protect and prevent the unlicensed use of their advertising slogans. Accomplishing this in China presents a unique set of considerations.

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By Kenneth Choy, Partner, Corporate, King & Wood – Hong Kong

“Chow Sang Sang” (周生生) is a successful and well recognized name in the jewelry business. The name in Chinese has an auspicious meaning of “continuous growth” or “endless vitality of the Chow family”.

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King & Wood's IP Legal Group in Beijing

The Domain Name Dispute Settlement Center of CIETAC was established in December, 2000, and began operation on July, 2005, as the Internet Disputes Settlement Center. This Center accepts cases including cybersquatting of domain names (disputes on Chinese domain names, e.g. ".cn", and top-level general domain name, e.g.".com"), cybersquatting of general websites, wireless websites, text message websites, etc.

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By Kenneth Choy, Partner, Intellectual Property, King & Wood - Hong Kong

Last month, the United States Supreme Court heard oral arguments in the closely followed case of Bilski v. Kappos, 08-964. The case concerns a patent application for hedging risk in commodities trading. Both the U.S. Patent and Trademark Office and the United States Court of Appeals for the Federal Circuit rejected the claims. In reaching its decision, the Federal Circuit ruled that to be eligible for a patent, a process claim must be tied to a particular machine or it must transform an article into a different state or thing. The court said that this ‘machine or transformation’ test is the only test for determining patent eligibility of process claims.

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In patent prosecution, an examiner often mentions the term "common knowledge" when evaluating a step forward in an invention, as one cannot patent common knowledge. Common knowledge in the IP sense is generally a fact known or ought to be known to one skilled in the art and can be applied by such a person to solve specific technical problems. Common knowledge can also be a technical means that is most likely to be considered and applied by one skilled in the relevant technical field when working on solutions to specific technical problems. As China's Guidelines for Patent Examination (the "Guidelines") do not provide a clear definition for "common knowledge", the examiner and the applicant or the applicant's attorney often disagree on what is common knowledge in a particular patent dispute.

By Chen Wei, Partner at King & Wood's Intellectual Property Group

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By Xu Jing, Partner at King & Wood's Intellectual Property Group

Malicious litigation is broadly thought to be using a legal right to litigate to protect an interest when no substantive right has been violated. Currently, Chinese law does not provide any specific provisions on how to determine whether a party has abused its right to litigate, nor does the law define the concept of malicious litigation. Moreover, Chinese law does not provide specific remedies for a victim of malicious litigation to repair the damages suffered from a malicious litigation.

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China's rapid economic development and its emerging middle class allow franchises to operate in China under the following model:

The franchisor
• owns a well-known brand with a global reputation;
• has a strong desire to expand its brand in China;
• currently lacks sufficient capital and the traditional franchising model is no longer suitable to support such expansion.

The franchisee:
• has a well-developed distribution network;
• already owns second-line brands for the same or similar products which have already established certain market share in China;
• has ready capital and other operational resources.

By Cecilia Lou, Partner at King & Wood's Intellectual Property Group

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Once a friend of mine visited Shanghai and asked me to recommend some quick restaurants. After listing a few options, I realized that he was not interested in them as he just wanted to find a simple restaurant providing real Shanghai cuisine. It dawned on me that, we were surrounded by national and international franchised stores with standardized products and services which often provide little local flavor. Franchising is ubiquitous in China, and not just the fast food chains.

 By Cecilia Lou, Partner at King & Wood's Intellectual Property Group

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Traditionally civil, administrative and criminal IPR cases have been heard by the Intellectual Property, Administrative and Criminal Divisions of the courts, respectively. For instance, both the IPR Tribunals and the Administrative Tribunals of the Beijing No. 1 Intermediate People’s courts were entitled to exercise jurisdiction over IPR administrative cases involving patent and trademark rights grants and determinations. The issue is that different divisions may apply different criteria to the same case.

Xu Jing & Zhang Hairuo, IP Litigation, King & Wood

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The Supreme People's Court promulgated the “Interpretation on the Application of the Law Concerning Several Issues Regarding the Trials of Civil Disputes Relating to the Protection of Famous Trademarks” on April 23, 2009. This Interpretation clarifies what constitutes “famous” trademarks in China.

Xu Jing, Partner, IP Litigation

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On April 21, 2009, China’s Supreme People's Court promulgated its “Opinion on Several Issues Concerning Trials of IP Cases to Serve the Public Interest under the Current Economic Environment” In this Opinion, the Supreme People's Court first clarifies that injunctive relief should not necessarily be granted in all intellectual property infringement cases. Under certain circumstances, the Court stated that an award of reasonable or sufficient damages can be an effective substitute for claims of injunctive relief.

Xu Jing, Partner, Intellectual Property

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The third amendment of the Patent Law of the People’s Republic of China (“New Patent Law”) was passed on December 27th 2008, and will come into effect on October 1st 2009. The New Patent Law will impact the legal administration of and court rulings on patents as follows:

A、Affirmed the "Plea of Free Prior Art"

The New Patent Law expressly affirms the “plea of prior art” concept that has frequently been raised in patent infringement law suits. Prior to this, the court was very cautious in applying such a principle due to the lack of a fully recognized legal basis. However, the specific conditions and standards for its use, which have been widely debated among professionals, have not yet been clarified. For example, whether this concept is only applicable to literal infringement cases, or does it also apply to equivalent infringement cases. We look forward to having a unified resolution through judicial interpretation in the future. This change enables quick closures to cases which were filed maliciously and lacking solid grounds.
 

Mia Qu/Melody Shi/Nick Wang of King & Wood's Patents Practice

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The Chinese legislature created a hybrid from the different approaches adopted by civil and common law jurisdictions through the Copyright Law of the People's Republic of China (the “Copyright Law") and the Regulations on the Implementation of the Copyright Law of the People’s Republic of China (the“Implementation Regulations"), and produced the twin concepts of “legal entity work” and “occupational work” for assigning rights to works made in the course of an employment relationship. For example, a book written by a group of employees organized by an entertainment company for celebrating the company's anniversary would likely be considered “legal entity work”, but a piece of music composed by a composer employee (not for specific purposes) is “occupational work”, because in the former case, supervision of the company would be involved but the latter case it would not.

Being able to draw a clear line between “legal entity work” and “occupational work” is crucial during a due diligence investigation in terms of copyrighted materials in employment relationships- ascertaining an accurate chain of title from the author turns out to be a thorny issue. Though these two types of works are seemingly similar, the attribution of the copyright ownership between a legal entity employer and an employee is critical. Though the determination of “legal entity work” and “occupational work” can be extremely confusing, neither the legislatures nor judicial organs have ever promulgated any guidance. Thus far, only the National Copyright Administration of the People’s Republic of China (the “NCA") has expressed its viewpoints on this matter in the circular “Reply to the Liaoning Tieling Mediate Court Regarding How to Determine Legal Entity Work and Occupational Work” (the “NCA Circular”), which however does not have judicial binding force.
 

Wang Rui, Partner, International Trade

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As 2009 begins and the economic crisis has hit most major markets globally, the Supreme People's Court of the People’s Republic of China (“Supreme Court”) is studying how to adjust judicial policy on intellectual property rights (“IPRs”). The new policies will outline developing trends in the legal protection of IPR in China that may occur this year:

1. Increasing Compensation for Infringement on Intellectual Property Rights

Recently, the Supreme Court has stressed on various occasions that the court shall adopt flexible and practical methods to calculate the damages awarded in cases concerning infringement on IPRs in order to adequately compensate rights owners, negate illegal profits collected by the infringement, and truly raise the costs for infringement; the reasonable expenses of the right owners incurred while enforcing their lawful rights shall be reimbursed. When statutory compensation is applied, the compensation for the expenses incurred by the rights owners while enforcing their lawful rights shall be calculated separately, rather than be included in the statutory compensation. The current applicable maximum amount for statutory compensation in China is RMB 500,000（though the maximum amount has already been raised to RMB 1million in the third revised PRC Patent Law promulgated on December 27, 2008 which will come into effect on October 1, 2009）, which includes the allowance for expenses incurred. Due to the difficulty in producing evidence when seeking compensation and that the statutory compensation is non-substantial, the absence of sufficient and adequate compensation is a common problem faced by right owners. This issue could addressed in 2009.
 

Mia Qu, Bessie Ye, Nick Wang of King & Wood's Intellectual Property Group

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Australia has had a range of general and sector-specific privacy laws for 20 years. At the Federal level, the Privacy Act 1988 (Cth) initially regulated the way in which Commonwealth agencies dealt with the personal information of Australians. The scope of the Privacy Act was expanded to also cover the handling of individuals' credit information and, more broadly in 2001, to cover all private sector organisations and the way in which they collect, use and disclose personal information. Individual States and Territories of Australia also have specific privacy laws that regulate the way State-based agencies deal with personal information, and laws relating to privacy are also found in a variety of legislative contexts.

The result is that Australia has a myriad of privacy-related laws at different levels of Australian Government covering an often overlapping range of issues. This situation was one of the drivers behind a substantive review by the Australian Law Reform Commission (ALRC) into Australia's privacy laws.
 

By Michelle Rowland, Sarah Alderson of the Communications & Technology Group of Gilbert + Tobin.
 

Kalley Chen, Dai Chen and Xu Zifeng, of King & Wood.

King & Wood established a strategic alliance with Gilbert + Tobin in November 2007.

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According to the fundamental principles of Chinese courts concerning software resale, the resalability of software under different sales models may also be different.

A. Traditional sales model

Under the traditional model, the supplier sells to their clients a CD-Rom or floppy disk containing the software and enters into an agreement with the clients on the scope of license.

This model involves three relationships:

1) The transfer of ownership of the medium carrying the software ;

2) The transfer of the copy of the software; and

3) The licensing of copyright.

 

Among these issues, the transfer of ownership of the hard copy is subject to property law, while the transfer of the copies of the software falls into the category of exercising the distribution right by the right owners under the Copyright Law, and the licensing of the copyrighted software relates to the defined licensing relationship between the copyright owner and the user under the Copyright Law.

As the sale of software sold under the said model is completed by transferring of the ownership of the medium containing the software, the doctrine of exhaustion of rights is applicable to this model. In practice, software can be resold without the consent of the copyright holder.

Xu Jing, Partner and Zhao Ye, Associate, IP Litigation

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In recent years, second hand trading of software has experienced substantial growth and the legal issues involved in such transactions have also caught the eyes of the players in the industry. Generally, the legality of software resale is decided by whether the distribution rights of the copyright owners are exhausted upon the transaction. However, it is difficult to decide when a transaction should be regarded as "licensing" and when the transaction should be deemed as a "sale". As the number of software resale cases brought before the courts increases, the courts' understanding of the nature of software trading develops. Various jurisdictions have formed their own approach on differentiating an act of sale from that of licensing.

Common copyrighted products such as books or CDs can be resold because most countries adapt the "doctrine of exhaustion of distribution rights" in their copyright law, namely once a copyright owner publicly distributes his/her original work or the copies of such work by way of "sale" or "gifting", the distribution right will be deemed exhausted and the owner may not reclaim such right.

Xu Jing, Partner and Zhao Ye, Associate, IP Litigation

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In recent years, search engine providers, P2P website or other Internet service providers are often challenged in the courts by content owners. While the legal actions brought by international record companies are constant headaches for major Chinese search engine providers, including Baidu, Yahoo and Sogou, international search engine giants like Google and YouTube have also been struggling to resolve various lawsuits internationally.

These cases raise the same issues for legislators and judges in all jurisdictions -- how to evaluate the business models of Internet Service Providers or Online Service Providers ("ISPs" or "OSPs", collectively "ISPs") and the responsibilities and obligations for copyright protection of the ISPs?

In 2007, the US Ninth Circuit Court of the State of California rendered its judgment for Perfect 10, Inc. v. CCBill LLC. The California Court granted CCBill LLC immunity under the Safe Harbor Principle on the ground that the notice for removal sent by Perfect 10, Inc. failed to provide sufficient information and could not be deemed as effective notice. The intention of the US Congress when adopting the Safe Harbor Principle was to ensure that liabilities are shared fairly between the parties by requiring the copyright owner to bear the burden of proving the existence of infringement.  These safe harbor provisions are designed to shelter service providers from the infringing activities of their customers. The California Court's decision has been interpreted by US legal professionals as another affirmation of the application of "Safe Harbor Principle" to ISPs.
 

He Wei, Partner and Wang Yaxi, Associate, Intellectual Property

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There has been a great deal of media coverage in China in the past weeks regarding the impact of Microsoft’s making available its Windows Genuine Advantage (hereafter, “WGA”) to users with Chinese language versions of Windows operating systems. For users going to Microsoft for many of its software updates (excluding some security updates), a validation is required where WGA would notify the user if unlicensed Microsoft Windows software was found on the user’s computer. Microsoft contends that WGA has been made available to warn users of the presence of unlicensed software and to give them the opportunity to purchase licensed software which would then allow them to have the benefits associated with said software, such as product support and ongoing software updates.

Shi Yusheng, Partner, IP Litigation

Mr. Shi Yusheng has also discussed this issue recently on CCTV - 9's Dialogue

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Under the United Nation's Framework Convention on Climate Change (UNFCCC), “developed country Parties should provide new and additional financial resources to support the transfer of technology and take all practical steps to promote, facilitate and finance the transfer of, or access to, environmentally sound technologies and know how to developing country Parties.” However, a UNFCCC report revealed that a large portion of developing nations do not take advantage of CDM projects to import technology.
 

As long as technology transfer from developed countries is a convenient low-cost means for China to reduce GHG emissions, why doesn't China have more CDM projects that involve technology transfer? [continue reading to see our analysis]
 

Wang Rui, Partner, International Trade

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At first glance, the goals of intellectual property law and competition law might appear to conflict. IPR owners are granted statutory rights to control access and charge monopoly rents to others for use of their rights. IPR owners may also use terms of IPR licences to regulate downstream activities of their distributors, such as imposing exclusivity, territorial restraints and price restraints. Competition law, on the other hand, is directed at curtailing such market power which may prove harmful to economic welfare.

 However, IP laws and competition laws can also be seen as complementary rather than antagonistic. Both laws share the same fundamental goals of enhancing consumer welfare and promoting innovation. According to the United States (US) Department of Justice (DoJ) and the Federal Trade Commission (FTC) :

 “…[competition] laws protect robust competition in the marketplace, while intellectual property laws protect the ability to earn a return on the investments necessary to innovate. Both spur competition among rivals to be the first to enter the marketplace with a desirable technology, product, or service.”

 While an IPR may confer a “legal monopoly” over a product, process or work, it does not necessarily confer an “economic monopoly”. Further, while an IP license may well confer restraints on licensees (such as territorial restraints) with respect to a specific product, process or work, there may be sufficient actual or potential close substitutes that constrain the exercise of market power by the IPR owner.

 Despite the view that the goals of IP and competition laws are complementary, difficult questions can arise when competition law is applied to specific activities involving IPRs.

A. China's AML:  Article 55

 The IPR provision in the AML is set out in Article 55:

“This law shall not apply to the conduct of operators to exercise their intellectual property rights in accordance with the laws and relevant administrative regulations on intellectual property rights; however, this law shall apply to the conduct of operators to eliminate or restrict market competition by abusing their intellectual property rights.”

 Article 55 exempts conduct which amounts to an exercise of IPRs so long as:  those IPRs are exercised in accordance with the provisions of laws and administrative regulations relating to IPRs; and the conduct does not amount to an abuse of IPRs by eliminating or restricting competition.

 The Article 55 approach is very similar to the approaches in Australia and Canada. In both these countries, there has been debate about when the IPR owner is only fairly exercising their inherent rights in the IPR or is trying to achieve something more which has an anti-competitive outcome. Experiences in both countries show that this dividing line can be difficult to draw.

* Angie Ng is a graduate in the Competition and Regulatory Group at Gilbert + Tobin in Sydney, Australia.

** Ding Liang is of counsel for King & Wood's International Trade Practice in Beijing.

*** Peter Waters is a partner in the Competition and Regulatory Group at Gilbert + Tobin in Sydney, Australia.

King & Wood established a strategic alliance with Gilbert + Tobin in November 2007.
 

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On May 26, 2008, the China Trademark Review and Adjudication Board (“TRAB”) of the State Administration for Industry and Commerce (SAIC) made a decision in favor of Changyu Winery Group, upholding its exclusive use of the mark “cabernet” in Chinese （“解百纳”） as a registered trademark. The decision further found that Changyu established “解百纳”  as one of its trademarks through its use and did not consider “解百纳” the generic name for these cabernet grape varieties.  This means other wineries such as China Great Wall Winery, Dynasty Fine Wines Group Limited and Yantai Weilong Grape Wine Co. are prohibited from using the mark “解百纳", which may certainly cause damage to these wine makers in marketing their products.

This dispute mainly focuses on the following two issues:

1. Whether “解百纳” directly indicates the main raw materials and the characteristics of the products and accordingly should be considered a generic term for certain wine products;

2. Whether Changyu obtained the characters “解百纳” through its long term use.

Ting Xu, Associate, Trademark Department

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Interviewed by Serwat Perwaiz, Editor of King & Wood's Publication Group

As China's economic and social presence on electronic forms of communication continues to develop and expand, the country's regulatory bodies are stepping up to the challenge to keep pace with the new developments. We are lucky to have Dr. Martin Cave, Professor and Director of the Centre for Management under Regulation, Warwick Business School, to provide us his comments on the hot topics of Technology and the Internet.

When asked about his key areas of interest, he commented that he was particularly interested in “reform and liberalisation of the radio spectrum, which can support the amazing growth of voice and broadband wireless technologies we have seen in the past decade.” He went on to discuss how the standard model in Europe and the United States, which “relies on maximising competition and reducing regulation to the minimum, with a relatively small role for government policy and government subsidy” differs significantly from models in Asian countries where “government policy is a much stronger driver.”

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There are Risks in Participating in the Formation of Standards.

On July 8, 2008, when China's Supreme Court addressed the question raised by the Liao Ning High People's Court arising from a patent infringement dispute, it stated, “If a patentee participates in the formulation of the Standard or agrees to incorporate its patented technology into the National Standard, the Industrial Standard and/or the Local Standard, it shall be deemed as the patentee authorizing other parties to exploit the patent for the purpose of conforming to the standards. The exploitation by the said parties may not constitute patent infringement as specified under Article 11 of the Patent Law.” 
 

How can this impact your patent in China? 

Xu Jing, Partner at King & Wood's IP Litigation Practice

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Successfully handling rejection reviews, based on a prior similar mark, in the past has proven difficult.  Rather than simply giving up registration of an important trademark, recent China Trademark Review and Adjudication Board (TRAB) decisions indicate that an effective alternative for applicants is trying to reach a co-existence agreement with the owner of the cited mark.  If there is a slight difference between the preliminarily rejected trademark and the cited mark, and the marks do not cover identical goods or services, a co-existence agreement could become “a must” for overcoming a preliminary official rejection.

Recently we received a favorable decision for a client from the TRAB on a trademark rejection review. Since the rejected trademark and the cited mark differed only in one of ten letters and the two marks also covered similar goods, we expected the board to reaffirm the previous rejection based on Chinese trademark examination criteria. The obvious deciding factor resulting in a favorable review was the Co-existence Agreement entered into by our client with the owner of the cited mark. The co-existence agreement in essence consented to the registration and use of the trademark by our client in China.

Written by Zhu Fangjin, Associate, Trademark Group

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Written By Yang Hongjun, Partner

The recent decision by the Beijing Higher People's Court revoking the Patent Reexamination Board (PRB) invalidation Decision of Pfizer's Viagra Patent in China has put an indefinite end to a drawn out battle between domestic drug companies and Pfizer. This case, while not firmly establishing any foundation for patent examinations, has revealed many of the risks associated for all parties in proceeding into a legal dispute regarding patents in China.

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