Wednesday, March 08, 2006

Utterback: Ways to Enforce IPR in China

Meg Utterback, attorney at Thelen Reid & Priest, wrote an illuminating article about enforcement of IPR in China.

Administrative enforcement
Trademark infringement: apply in writing to SAIC or one of its local bureaus.
"If the application is rejected, the applicant will be notified within fifteen days. If accepted, SAIC may investigate the allegations, inspect the goods, and obtain relevant documents. Based on that review, SAIC may issue an order or decision enjoining the infringement. Before the decision, the parties are notified and given an opportunity to be heard. A party may appeal the decision to the People’s Court."

Copyright infringement: apply to the NCA (中文).
"The application, if accepted, will trigger an investigation. If rejected, the applicant will be notified within 15 days. Post-investigation, NCA will generate an “Opinion on Administrative Penalties for Copyright Infringement.” Before the decision, the parties are notified and have an opportunity to be heard on the proposed decision. A party may appeal the decision to the People’s Court within three months of issuance."

Patent infringement: apply in writing to the SIPO. The process here is similar to that for other infringements, in that an investigation is followed by an order against the infringer, with an opportunity to be heard. The order may be appealed to the People’s Court.
However, more commonly the subject of civil court proceedings and are usually not submitted to administrative proceedings. Parties can seek injunctive relief as well as damages for patent infringement. One difference in patent infringement cases is that there is often a conciliation process before the administrative proceeding commences.

Civil court proceedings: Go Forum shopping
Utterback gives an overview of where the courts reside that rule about IPR cases. These are, e intermediate courts and special intellectual property courts in Beijing, Shanghai, Tianjin, Chongqing, Qingdao, Dalian, Yantai, Wenzhou, Fushan, Shenzhen, Zhuhai, Shantou and Xiamen.
In the district courts of Shanghai; Pudong and Huangpu and Beijing; Chaoyang and Haidian they have jurisdiction for trademark, copyright and unfair competition, but normally not patent.
"Beijing courts seem to see more complicated patent cases, while Shanghai courts have traditionally seen more trademark and unfair competition cases. Factors in deciding jurisdiction include place of business, situs of performance of contract, and situs of infringing activity. If jurisdiction is improper, cases are usually transferred, not dismissed. Thus, forum shopping is quite common and jurisdiction should be carefully considered before suit."

Utterback's conclusion:

"Each process has its attributes.

  • Administrative procedures in China are swift and less expensive. They also serve to improve relations with the government agency and educate the relevant government authorities about products and the need for protection of intellectual property.
  • Civil remedies offer the benefit of both injunctive relief and damages.
  • Finally, criminal prosecution can stop the infringer, who might otherwise covertly move and rename the operations in response to a cease and desist order.

Before embarking on any recourse, the foreign company must define its objectives, liaise with appropriate members of the PRC Government and then weigh the options in conjunction with the company’s overall China business plan."

Read Utterback's article on TR & P's site here or Mondaq here.

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