China Appeals WTO DS 363 About Market Access of Copyrighted Goods

China is appealing the panel decision DS 363 (Measures affecting trading rights and distribution services for certain publications and audiovisual entertainment products) by the Dispute Settlement Body, in which many of the US allegations were uphold. According to the BBC, no documents with the grounds for the appeal have been released, yet.

How does a DSU (Dispute Settlement Understanding) appeal work?

• "A standing Appellate Body shall be established by the DSB. The Appellate Body shall hear appeals from panel cases. It shall be composed of seven persons, three of whom shall serve on any one case.": article 17 (1) DSU;
• "As a general rule, the proceedings shall not exceed 60 days from the date a party to the dispute formally notifies its decision to appeal to the date the Appellate Body circulates its report. In fixing its timetable the Appellate Body shall take into account the provisions of paragraph 9 of Article 4, if relevant. When the Appellate Body considers that it cannot provide its report within 60 days, it shall inform the DSB in writing of the reasons for the delay together with an estimate of the period within which it will submit its report. In no case shall the proceedings exceed 90 days." article 17 (5) DSU;
• "An appeal shall be limited to issues of law covered in the panel report and legal interpretations developed by the panel." : article 17 (6) DSU;
• "An Appellate Body report shall be adopted by the DSB and unconditionally accepted by the parties to the dispute unless the DSB decides by consensus not to adopt the Appellate Body report within 30 days following its circulation to the Members." : article 17 (14) DSU.

This case, DS 362, can be read in connection with DS 363. Restrictions of market access of copyrighted goods can be conducive to a copyright piracy rich climate.
Read Deng Shasha's article for Xinhua here.

EU Afraid To Share Sensitive Proprietary Info With China

The executive summary of the 2009 Position Paper of the European Union Chamber of Commerce about China shows the concerns the EU has about China's alleged industrial-intervention policies and foreign investment restrictions.

"The results of the European Chamber Business Confidence Survey 2009, [..], indicate that European investors in high-tech and branded goods are more interested than ever in the Chinese market. However they are extremely cautious about further investment. They have concerns about the protection of Intellectual Property Rights if they transfer technology, and about the relatively unpredictable mergers and acquisitions policies. Meanwhile, the barriers to market entry – the establishment costs in capital requirements, licensing, forced joint ventures and ownership caps – are making China less and less appealing as an investment destination for European companies."

The executive summary of the paper states that the EU is more important for China than vice versa. China's exports to the EU represent 7 percent of China's GDP, while the EU's export to China represents only 0.7 percent of the EU's GDP. Therefore, the EU claimes it is in the interest of China, to open up its markets, so that EU companies will continue to invest in China.

The paper itself consist of four themes:

• market access (An important channel of knowlegde transfer is the licensing of patent-pending or patented inventions, which “typically involves the purchase of production or distribution rights and the underlying technical information and know-how”, according to Keith E. Maskus, who wrote extensively about the subject. See 'Transfer of Technology and Technological Capacity Building. ICTSD-UNCTAD Dialogue,' 2nd BellagioSeries on Development and Intellectual Property. Sept. 2003, pg 18-23. So, when the protection/enforcement of IPRs in a developing country is less than perfect, chances are bigger that companies from developed countries transfer technology via exports or foreign direct investments, instead of licensing. Also, according to the executive summary China made a not very generous offer during the negotiations of the World Procurement Agreement (WPA), which would delay China's accession. I hope to speak about the IPR implications of the WPA with
• transparency "The promulgation by ministries ofadministrative rules and interpretations is still generally characterised by a disturbing lack of transparency.";
• administrative coordination;
• IPR: "there is a growing concern amongst European companies about the leakage of confidential information which can occur at various stages of business development, such as: project approvals, product certification, environmental impact assessments, patent filings, marketing approvals and registration. For example, during the CCC process (China Compulsory Certification, a precondition to market access for 130 product categories), highly confidential information, which goes far beyond the scope of information necessary for the approval concerned, is frequently requested by testing labratories."

In the same vein: the EU has problems with article 19 of the Third Amendment of the Patent Law (passed on December 27, 2008) which prescribes any entity or individual intending to file a patent application abraod for an invention-creation made in China, shall apply in advance for a confidentiality examination conducted by the patent administrative department under the State Council.

So in order to get market access or intellectual property protection EU companies need to share confidential information. However, they are afraid that if they do, there is a chance that this information is misappropriated. For example given to a Chinese company that can register first or make sure that the information belongs to the prior art or prior design.

Read the executive summary here (10pg PDF).

IPR Protection For Traditional Chinese Medicine Needed

On April 1st, IP Dragon wrote about how to protect Traditional Chinese Medicine, see here. And it was certainly not an April Fool's Day joke. But a lot in this fields need to be done. Exactly that is pointed out by the State Council (the highest legislative body) which came up (April 21st, 2009) with "Some Opinions of the State Council on Supporting and Promoting the Development of the Traditional Chinese Medicine Industry, No. 22, 2009."

Relevant passages are:

IV. Promoting the TCM inheritance and innovation

ii. (..) You should strengthen the support and protection of famous brands, famous trademarks in the TCM industry; optimize the export structure of TCM products, enhance the added value of export TCM products, and support TCM enterprise to expand the global market.

iv. Strengthening the TCM legal system construction and the intellectual property protection: we should actively promote the legislation process of TCM, improve laws and regulations, strengthen TCM intellectual property protection and utilization, improve the TCM patent examination standards and the TCM species protection system, study and formulate a TCM traditional knowledge protection inventory, and gradually build a special TCM traditional knowledge protection system; and should strengthen the origin protection of good and genuine TCM materials, and transform the advantage of good and genuine medicine materials into the intellectual property advantage.

v. Strengthening the management of the TCM industry: the regions and departments concerned should strengthen the unified planning of the TCM industry, and manage the TCM in accordance with its characteristics and rules; should promote the TCM informationisation construction, build and improve a comprehensive statistical system; should promote the TCM standardization construction, build a standard system, and promote the transformation of China’s TCM standards into international standards; should rigidly supervise TCM law enforcement, heavily strike the acts of illegal medical practice in the name of counterfeit TCM, releasing false or illegal TCM advertisements, manufacturing or selling counterfeit or inferior TCM; and should strengthen the construction of local TCM management agencies, reinforce their management functions and enhance their management levels.

Marco Polo Hiuui: Knock-off Of Knock-off = Knock-off Square

Recently IP Dragon reported about Polo Santa Roberta, an "original" knock-off of Ralph Lauren's Polo brand and Burberry tartan pattern. However, when IP Dragon was taking a stroll down his Mong Kok neighbourhood, he learned that the knockoff is not so "original" after all. Marco Polo Hiuui is doing the same thing: mixing the Polo brand with that of Burberry's tartan pattern.

Ironic that Marco Polo, the iconic Italian explorer that marvelled about the Chinese technological developments and innovations of 1271 CE (actually especially the Mongol court, that, however, incorporated the best of Chinese culture and technology) that were unknown to the West, is now used as an icon for Chinese knock-offs. Given the incredible developments in China, I am sure China will again come up with original inventions, brands and artistic works, unknown to the West, soon.

"Class" Justice in Trademark Rights: Lan Kwai Fong

Lan Kwai Fong, an L-shaped expat-trap of bars and restaurants in Central, Hong Kong Island, founded by Allan Zeman (see its history here), is that well known in China and Macau many registered the name in all kinds of classes.

Neil Gough and Denise Tsang of the South China Morning Post wrote (September 14th) that Allan Zeman, Hong Kong entrepreneur is starting another aggregation of bars and restaurants in Chengdu, Sichuan province. Zeman will called it Lan Kwai Fong. In 2002 several of Zeman's British Virgin Island companies began registering Chinese trademarks for combination of the English and Chinese versions of the name Lan Kwai Fong, for restaurants, housing estate management, and beer.

However, Lan Kwai Fong has been registered in other classes by other people as well:

Luo Ming, Guangzhou (Guangdong province), registered a trademark for shoes, swimwear and other clothing in 2003

Zhuang Shaohai, Shantou (Guangdong province), registered a trademark for handbags and underware in 2006.

Chongqing (Chongqing municipality) registered a trademark for medicinal beverages, disinfactants and women's sanitary napkings.

Then there is the Lan Kwai Fong casino hotel in Macau (Macau SAR), opened last month and Lan Kwai Fong restaurant in Shamian Island on Guangzhou (Guangdong province).

Lan Kwai Fong is a case in point how imporatant your brand name is and that you have to register your tradenames in all classes of products and services that you want to be active in.

Check the Trademark Office of the State Administration for Industry and Commerce's trademark database here, click then on login and write down the name. You have to fill in a class number between 1 and 45 (International Trademark Classification under the Nice Agreement). For example class 43 is "Services for providing food and drink; temporary accomodation."

Exxon Mobil Wins 500,000 RMB Because of Trademark Infringement

Parties: Plaintiff Exxon Mobil; defendants: American Mobil International Petroleum Group and Xi'an Yanqing Technology Development Co.

Dispute: "defendants registered web addresses that included the Chinese characters for 'Mobil'." Probably with this is meant the characters 美孚 (mei3 = good, beautiful; fu2 = confidence, trust) and not the Chinese characters that translate mobil, because this word in the English language does not have any meaning. Correct me if I am wrong.

Ruling by the Shanghai No.1 Intermediate People's Court: defendants infringed Exxon Mobil's registered trade mark and engaged in unfair competition. Defendants must cease the infringing activity and pay RMB 500,000 Yuan.

Rouse's excellent newsletter China IP Extress 320 states: "The Court held that, although relevant judicial interpretations have not dealt with the issue, using another's trade mark in a web address can constitute trade mark infringement."

HK Government Wants Your Views on Copyright Tribunal Rules

click picture to enlarge

Which direction should the Copyright Tribunal Rules go?

Since 1999 Hong Kong uses a Copyright Tribunal, which is an independent and quasi-judicial body established under the Copyright Ordinance to hear and resolve disputes about:

- Licensing schemes;

- Licensing by licensing bodies;

- Determining the award for employees for using his/her work outside reasonable contemplation;

- Obtaining Tribunal's consent on behalf of owners of right of reproduction of a performance or on behalf of the owner of the performers' rental rights;

- Applications for determination of equitable remuneration to persons entitled to restrain rental by virtue of commencement of section 10 of the Intellectual Property (World Trade Organisation Amendments) Ordinance 1996;

- Applications for determination of compensation arising from contrary rights as a result of the commencement of the Copyright Ordinance.

See more about the scope of the Copyright Tribunal here.

The current Copyright Tribunal Rules you can find here.

Key proposals on the drafting approach and direction are:

* applying the relevant principles of the Civil Justice Reform as the fundamental value of dispute resolution before the tribunal;

* prescribing one standard procedure and application form for all types of applications/references before the tribunal;

* empowering the tribunal to exercise active case management;

* promoting alternative dispute resolution;

* empowering a single member of the tribunal to exercise certain adjudication powers;

* using practice directions to regulate proceedings before the tribunal, if appropriate; and

* prescribing a set of self-contained rules.

Public consulation closes September 30th, see here.

Harvest of Counterfeit Louis Vuitton and Gucci in 15 Minutes at Mong Kok Station

I was standing less than 15 minutes at the MTR station of Mong Kok, the most bustling and dense populated part of Kowloon, the peninsula of Hong Kong. I saw 5 ladies with a bag that could be counterfeit. Some were a bit shocked that I did not want to make a picture of them, but of their bags. All told me they did not buy their bag in the official Louis Vuitton or Gucci shop, and each bag costed them less than 300 HK dollar (30 euro). Conclusion: all were fakes.