China IPR Toolkit - United States Patent And Trademark

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STOPfakes.gov China Intellectual Property Rights ToolkitContentsChina’s intellectual property environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7Copyrights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9Trade secrets and unfair competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11IP enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14Acronyms and abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17China IPR resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18This publication was prepared by the United States Patent and Trademark Ofce,a participating agency in www.STOPfakes.gov. STOPfakes.gov is a one-stop shopproviding U.S. government tools and resources on the protection and enforcement of intellectual property (IP) rights. The federal agencies behind www.STOPfakes.gov have developed a number of resources to educate and assist businesses, particularly small and medium-sized enterprises, as well as consumers,government ofcials, and the general public.This toolkit is intended to provide general guidance for businesses and practitioners in better understanding the basics of the IP landscape in China. It is distributed with the understanding that the authors, editors, and publisher are notengaged in rendering legal, accounting, or other professional services. Nothing init should be understood as legal advice. When legal or other expert assistance isrequired, the services of a competent professional should be sought.UNITED STATESPATENT AND TRADEMARK OFFICEThis report contains information that was current as of the date of publication.While every efort has been made to make it as complete and accurate as possible, readers should be aware that all information that is contained herein issubject to change without notice. Images used in this toolkit are for educationalpurposes only.Originally published October 2019. This revised edition published May 2021.

CHINA’S INTELLECTUAL PROPERTY ENVIRONMENTU.S. companies doing business in China face a range ofchallenges in protecting and enforcing their intellectualproperty (IP). Companies planning to do business inChina should understand that the U.S. and Chinese IPlegal systems are diferent and that registration of rightsin the United States does not automatically confer rightsin China. It is important to become familiar with thediferences between the two systems and to develop andimplement a comprehensive strategy for protecting yourIP in China. This toolkit provides a starting point for developing an understanding of the challenges you may face inprotecting and enforcing IP in China, and it may be helpfulfor developing a China IP strategy.of patents and trademarks.1 For example, a patentowner can initiate an administrative proceedingagainst an alleged infringer at SAMR. Note that in somejurisdictions, including Shanghai, this authority stillresides with the local IP ofces. The National Copyright Administration of the People’sRepublic of China (NCAC) is responsible for theadministrative enforcement of copyrights. For example,a copyright owner can initiate an administrativeproceeding against an alleged infringer at NCAC. Inaddition, NCAC supervises the Copyright ProtectionCenter of China. Chinese government agencies with IP-relatedresponsibilitiesThe Copyright Protection Center of China (CPCC)issues copyright registrations. China’s system for granting, enforcing, and adjudicatingIP rights relies on a variety of administrative and judicialbodies. The diferent roles of these bodies are discussedthroughout this toolkit. The following identifes principalresponsibilities.The General Administration of Customs of thePeople’s Republic of China (GACC) enforces patents,trademarks, and copyrights at China’s borders. The Ministry of Public Security (MPS) and its localbureaus investigate certain criminal infringement cases,and the Supreme People’s Procuratorate (SPP) and itslocal branches prosecute certain criminal infringementcases. Court cases involving IP are heard both by China’sregular People’s Courts, by four specialized IP Courts,and multiple IP tribunals throughout China. InternetCourts hear cases involving the online sale of infringinggoods, and the Supreme People’s Court includes aNational Appellate IP Court, which considers appeals ofpatent cases and other complex IP-related cases fromlower courts. The National Intellectual Property Administration(CNIPA) examines and decides on applications forpatents, trademarks, geographical indications, andlayout designs of integrated circuits. CNIPA also includesadministrative bodies that decide on requests toinvalidate patents and to reverse decisions by patentand trademark examiners. CNIPA’s trademark-relatedwork is conducted by its Trademark Ofce and its patentwork by its Patent Ofce.The State Administration for Market Regulation(SAMR) is responsible for administrative enforcementGeneral considerations for protecting IP rights in ChinaThe following may be helpful in protecting IP rights inChina: Create a basket of IP rights, including patents, tradesecrets, trademarks, and copyrights. A multilayeredIP portfolio can provide synergistic protection andcompensate for gaps in China’s IP system. Develop an IP strategy with enforcement in mind.The strategy could involve hiring a competent local IPattorney who can provide a full range of services. Suchservices should include not only registration of rights1but also monitoring, investigation, and enforcementwork. Customize your strategy according to your needs.Your strategy may difer depending on the nature ofyour business and your IP rights and on your plans fordoing business in China. To be successful in China, youshould plan carefully. Begin by considering the generalstrategies and best practices identifed in this toolkit.In China, IP owners can choose between enforcing their rights administratively—that is, through administrative agencies—or judicially, throughthe courts. For more information about administrative enforcement generally and about SAMR’s role in particular, please see the discussion aboutIP enforcement, beginning on page 14.U.S. Patent and Trademark Office Stopfakes.govChina IPR Toolkit 2021 1

Instill in your China-based workforce a sense of IPownership, and make IP protection and enforcementthe responsibility of your entire China team. Keep good records. IP enforcement in China generallyrequires original documentary evidence (for example,certifcates of registration) to establish rights andprovide a basis for enforcement. Take advantage of U.S. government resources, includingthe China team at the U.S. Patent and TrademarkOfce (USPTO), China IP resources made available onthe USPTO website, and the USPTO’s three IP attachésposted in China (see the “China IRP resources” sectionon page 18 for links to contact information). The IPattachés can ofer on-the-ground assistance andinformation on protecting and enforcing IP rights;fnding local service providers; and addressing problemswith Chinese counterparts, including advocating for U.S.rights holders under exceptional circumstances.TRADEMARKSWhat is a trademark?A trademark is a word, phrase, symbol, and/or design thatidentifes and distinguishes the source of the goods ofone party from those of others. A service mark is a word,phrase, symbol, and/or design that identifes and distinguishes the source of a service rather than a good. Someexamples of each include brand names, slogans, andlogos. The term “trademark” is often used in a generalsense to refer to both trademarks and service marks.Unlike the United States, which grants priority to trademark owners based on their use of a trademark, China isa “frst-to-fle” jurisdiction: a party can obtain ownershipof a trademark merely by fling an application to registerit and is not required to show evidence of use. China’sTrademark Law lists the types of signs that may serve astrademarks: any signs, including words, graphs, letters,numbers, three-dimensional symbols, color combinations,and sounds, or any combination thereof, that are capableof distinguishing the goods or services.In addition to trademarks and service mark registrations,you may also fle to register certifcation marks and collective marks. Certifcation marks are symbols controlledby organizations that have the ability to oversee certainproducts or services, and they are used by companies orindividuals to indicate the original place of manufacture,the raw materials used, the method of manufacture, thequality, or other specifc features of the product or serviceassociated with the mark. Collective marks are symbolsregistered in the name of groups, associations, or otherorganizations for use by members to indicate their membership in the organization.A mark is generally eligible for trademark registration inChina if it is distinctive, is easily distinguishable, does notconfict with prior lawful rights obtained by a third party,and is not otherwise prohibited by the Trademark Law.Under China’s Trademark Law, symbols that cannot beU.S. Patent and Trademark Office Stopfakes.govregistered as trademarks include ones that are the sameas or similar to the state name, national fag, nationalemblem, or military fags or military decorations, not onlyof China but also of other countries and internationalintergovernmental organizations, unless approved by therelevant country or organization. Other marks that cannotbe registered include ones that discriminate against anynationality, are detrimental to socialist morals or customs,have so-called “unhealthy infuences,” or lack sufcientdistinctiveness. For a list of prohibited marks, refer toChina’s current Trademark Law.The term of protection in China for a trademark is 10 years,commencing from the date of registration. A trademarkmay be renewed indefnitely, subject to the payment of arenewal fee every 10 years.In the United States, trade dress is protectable under thetrademark law. Although certain elements of trade dress,such as 3-D marks, may be eligible for protection underChina’s Trademark Law, trade dress is protected primarilythrough the Anti–Unfair Competition Law (see the “TradeDress” section on page 5).How to obtain trademarks in ChinaBecause rights are determined according to priorityin fling (i.e., the frst applicant to fle generally obtainsthe rights), be sure to fle as early as possible with theTrademark Ofce of CNIPA, using the following steps:Step 1: Determination of eligibility A mark is eligible for trademark registration if it isdistinctive, does not confict with the prior lawfulrights obtained by a third party, and is not otherwiseprohibited by the Trademark Law. A China trademarkagent or lawyer may provide advice as to whether atrademark is eligible for registration.China IPR Toolkit 2021 2

Step 2: Selection of trademark agent Under China’s Trademark Law, foreigners or foreignenterprises must work with a China trademark agent oran organization that is qualifed to practice before theTrademark Ofce. However, if a foreign enterprise has apresence in China, it is not required to use such agentsand may apply directly to the Trademark Ofce. Manystill choose to use a trademark agent to assist in theprocess.Your U.S. trademark attorney may have a global networkof attorneys and agents, including in China, who will beable to assist in the fling of any trademark application,including under the Madrid Protocol (Protocol Relatingto the Madrid Agreement Concerning the InternationalRegistration of Marks).Certifed China trademark agents typically preparethe application, conduct a pre-application trademarksearch, and submit the application.Step 3: Selection of classes In China, as in the United States, trademarks areadministratively categorized into classes of goods orservices following the International Classifcation ofGoods and Services for the Purposes of the Registrationof Marks under the Nice Agreement. Unlike the UnitedStates, China further categorizes goods and servicesinto similarity subclasses in its trademark classifcationchart. An agent or lawyer may provide advice regardingclassifcation. A trademark must be registered inconnection with at least one particular class of goods.In addition, a trademark agent or lawyer may advise youto register your mark not only in classes that pertain toyour particular products or services but also in otherclasses and subclasses, both as a hedge against badfaith actors who may seek to register your mark and incase you later expand into other goods or services.Step 4: Performance of preapplication trademark search 2A preliminary trademark search is necessary to ensurethat there are no prior conficting registrations.Normally, a registered trademark agent or attorneycan do this search using a database on China’s ofcialTrademark Ofce website (http://sbj.cnipa.gov.cn/).Note the following:·Not all frms conduct these searches automaticallywhen you retain them; you should specify that youwant this done.·The preliminary searches may be costly and timeconsuming.·The database that the attorney or agent may search isnot the ofcial register and does not include pendingapplications.Step 5: Submission of application to the Trademark Ofce Trademark applications must include a trademarkapplication form, a power of attorney form, and acertifcate of incorporation or business license if theapplicant is a company. In addition to the required forms, the application mustinclude a number of trademark specimens. A trademarkagent or attorney will inform the applicant of theappropriate number. All documents must be submitted in the Chineselanguage. Documents submitted in languages otherthan Chinese are deemed “not to have been submitted”to the Trademark Ofce. As an alternative to fling an application directly withthe Trademark Ofce, consider extending your U.S.application or registration into China through theMadrid Protocol, which can be done through theUSPTO.2Step 6: Application for priority registration underinternational agreement China and the United States are members of the ParisConvention for the Protection of Industrial Property(“Paris Convention”). The Paris Convention providesthat under certain circumstances, trademark ownersfrom Paris Convention member countries who applyto register their marks in their home countries andsubsequently apply to register the same mark in otherParis countries are deemed to have fled the laterapplications on the same date as their home countryflings. That “priority fling date” is available if thesubsequent applications are fled within six monthsfrom the date of the home flings. An applicant whoclaims priority in its application before the ChinaTrademark Ofce must state so in writing at the timewhen the frst application is fled in China.Note that a downside of using the Madrid Protocol is that it could result in the Trademark Ofce misclassifying the goods in your application. As noted, theTrademark Ofce classifes goods into both classes and subclasses, but the Madrid system does not provide subclasses. Therefore, there is no opportunityfor you to specify a subclass in a Madrid fling, and the Trademark Ofce may, in the absence of a direction from you, choose an incorrect subclass.U.S. Patent and Trademark Office Stopfakes.govChina IPR Toolkit 2021 3

In addition, within three months, the applicant mustalso submit a copy of the frst application fled in itshome country.Step 9: Registration Step 7: China Trademark Ofce review The Trademark Ofce will review the trademarkapplication materials to ensure that they are completeand comply with all the application requirements andthat the trademark meets the criteria for eligibility forregistration.Step 8: Preliminary approval and publication in theTrademark Gazette, request to amend application, orrejection of application 3If the Trademark Ofce determines that the applicationpacket is complete and that no other similar or identicaltrademark is currently registered or pending, it willgrant preliminary approval and publish the trademark inthe Trademark Gazette. The public at large will then havethree months to challenge the application to registerthe trademark.If no third party opposes the mark during the threemonth opposition period, the Trademark Ofce willregister the trademark and publish notice of theregistration in the Trademark Gazette.Opposition to preliminary approval of registrationIf the Trademark Ofce preliminarily approved someone else’s application to register a trademark that youbelieve infringes your mark, you may fle an oppositionto the registration of that mark. This must be done withinthree months of publication of preliminary approval inthe Trademark Gazette. The Application for TrademarkOpposition must be submitted in duplicate and must setout the relevant information.Thereafter, the parties are entitled to provide additionalinformation within strict time limits (three months). Acompany’s use of an experienced trademark attorney toadvise on fling an opposition is important.Invalidation of registered trademarkIf the Trademark Ofce decides that the applicationneeds to be amended (for example, if the applied goodsare not submitted in standard language contained inthe classifcation chart), it will notify the applicant inwriting. The applicant must amend the applicationwithin 15 days of receipt of the notifcation from theTrademark Ofce. The applicant has only one chanceto amend, and if the amendment is rejected again bythe Trademark Ofce, or if it is not fled within the timelimits, the application as a whole will be rejected. Arejection based on a failure to sufciently amend anapplication can be appealed internally, by fling foradministrative reconsideration at the Trademark Ofcethrough the Trademark Review and Adjudication Board.You may ask the Trademark Ofce to invalidate a registration of a trademark that you believe infringes your mark.Such requests must be fled within fve years from the daythe registration is issued.3 The Trademark Ofce will issueits decision on the invalidation request within 12 months,and either party can appeal the decision to the Beijing IPCourt within 30 days of receiving the decision.If the Trademark Ofce rejects the application onsubstantive grounds (for example, if the trademark isfound to be similar to an existing registered trademark),it must notify the applicant of the rejection in writing.Within 15 days of receipt of the rejection, the applicantmay request administrative review by the TrademarkReview and Adjudication Board. If the applicant isdissatisfed with the board’s decision, it may seekjudicial review by fling an administrative appeal tothe Beijing IP Court within 30 days of receiving writtennotifcation of the board’s decision. Uses a trademark that is identical to yours in connectionwith identical goods without your authorization; Uses a trademark that is similar to yours in connectionwith identical goods without your authorization, if thatuse is likely to cause confusion; Uses a trademark that is identical or similar to yourswithout your authorization in connection with similargoods, if that use is likely to cause confusion; Sells goods that infringe your exclusive right to use thetrademark;What constitutes infringement of yourtrademark in ChinaUnder China’s law, once you register your trademark, a thirdparty can be found to have infringed your mark if he orshe does any of the following:The fve-year limitation does not apply if the registration was obtained in bad faith and the registered mark is similar to a trademark that CNIPAdetermined to be “well known.”U.S. Patent and Trademark Office Stopfakes.govChina IPR Toolkit 2021 4

Forges or manufactures representations of yourtrademark (for example, on tags, labels, or stickers) orsells those representations without your authorization; Afxes your trademark on other products and then sellsthose products, all without your authorization; Helps others to infringe your mark, or deliberatelycreates conditions that facilitate the infringement ofyour trademark; or Carries out other acts that result in harm to yourexclusive right to use your registered trademark.Obtaining domain name registrations in ChinaYou may wish to protect your trademarks and tradenames as domain names, both so that you can use yourmark in that manner and to prevent others from improperly registering your mark as a domain name. Domainnames are granted on a frst-to-fle basis.Registration of a trademark with a “.cn” (China) extension is handled by a domain name registrar, not by theTrademark Ofce.Developing a domain name strategy involves both business decisions and legal implications. Again, working withChinese attorneys, either directly or through your U.S.trademark attorney, will help you develop your strategy.As with trademarks, fle as early as possible.Challenging third-party domain nameregistrations in ChinaTrade dress: protection for product and serviceshapes, packaging, and decorationWhat is trade dress?Trade dress is the overall commercial image (look and feel)of a product or service, which indicates or identifes thesource of the product or service and distinguishes it fromthose of others. It may include the design or confgurationof a product, the packaging of goods, and/or the décor orenvironment in which services are provided. Trade dresscan consist of elements such as size, shape, color, or texture to the extent that such elements are not functional.How to obtain trade dress protection in ChinaChina’s Anti–Unfair Competition Law (AUCL) providesprotection against the unauthorized use of names, packaging, or decorations that are identical or similar to thoseof famous products. The AUCL can therefore providelegal grounds for opposing unauthorized copying of thedistinctive packaging or shapes of popular products.This protection has been extended to the design elementsof a retail store, employee uniforms, and other distinctive components of a business’s overall image. However,enforcement authorities will not protect the look andfeel of a product or retail environment if the elements forwhich protection are sought result from the nature of theproduct itself, are functional, or add material value to theproduct.If a third party registers a domain name that you believeinfringes your trademark (or is otherwise improper), youcan challenge the registration in China in one of two ways:Parties who believe that their distinctive product shapes,packaging, or business image has been used by thirdparties without authorization may seek redress througheither administrative enforcement or civil enforcement viaChina’s court system. Through dispute resolution conducted by an arbitrationcenter, such as the China Internet Network InformationCenter (CNNIC) or the Hong Kong InternationalArbitration Center (HKIAC); orAdministrative enforcement Under the AUCL, businesses whose trade dress hasbeen infringed may fle a complaint with the relevantadministrative enforcement authority.By fling a dispute with the People’s Court, claiminginfringement or unfair competition. As with cases involving trade secrets (see discussionon page 11), enforcement ofcials are empowered toconduct broad investigations into cases of allegedinfringement, including conducting raids, makingcopies of relevant documentation, seizing or freezingrelevant assets, and interviewing individuals underinvestigation. Upon making a determination that infringementhas occurred under the AUCL, the administrativeenforcement authority may issue an injunction againstfurther use of the relevant goods, may seize theinfringing goods for destruction, and may issuea fne. Arbitration is generally the easier and cheaper of thetwo options, and CNNIC and HKIAC tend to be relativelysympathetic to trademark owners. If the domain nameincludes the “.cn” country code top-level domain (TLD),arbitration through CNNIC is available only if requestedwithin three years of the registration of the domain name.U.S. Patent and Trademark Office Stopfakes.govChina IPR Toolkit 2021 5

The fne is calculated on the basis of the amount ofillegal profts earned by the infringer. In cases whereprofts exceed RMB 50,000 (approximately US 7,680 in2021), the fne may be as high as fve times the amountof the illegal profts. In cases where illegal profts areless than RMB 50,000, or in cases where no illegal proftsare earned, the fne may not exceed RMB 250,000(approximately US 38,400 in 2021).Civil enforcement Under the AUCL, businesses harmed by infringementof their product shape, product packaging, retail storedesign, and so on may seek redress in China’s courtsystem. If a court determines that infringement has occurred,it may award compensation equal to the amount ofharm sufered. If such harm is difcult to calculate, thecourt may award compensation equivalent to the illegalgains made by the infringing party. This compensationmay include reasonable costs expended to stop theinfringement (for example, legal fees). If the foregoing methods of calculating compensationare inefective or inapplicable, the court may awardstatutory damages of up to RMB 5 million (US 768,000in 2021).Tips for protecting your trademarks in ChinaThe following tips may be useful in seeking to protectyour trademarks in China: Trademarks are territorial, meaning that rights to atrademark in one country do not necessarily conferrights in other countries. Because a U.S. registrationdoes not provide protection in China, you should applyto secure the rights to your brand in China as early aspossible.China’s strict adherence to a frst-to-fle system hasresulted in third parties fling frst in bad faith toprevent legitimate brand owners from registeringtheir marks. Because it can be difcult to cancel theseregistrations, you should monitor your marks in Chinaand address any bad-faith fling early. Monitoringcan be accomplished by periodically conductingsearches of China’s public searchable trademarkdatabase or by hiring companies that specialize inmonitoring trademark flings. Those companies mayhave enhanced, software-based methods of spottingtrademarks that might be missed during ordinarydatabase searches.You should fle your trademarks early to avoid bad-faithflers and to arm yourself with rights to pursue infringersand counterfeiters. File defensive applications covering all classes of goodsand services that you may sell in the future or that maycause consumer confusion.Consider fling a Chinese-language version of the mark.Consider fling in Hong Kong, Macao, and Taiwan, aswell as in Singapore and other neighboring countries orregions.Record your Chinese trademark registrations andauthorized distributors with the General Administrationof Customs of the People’s Republic of China (ChinaCustoms) through its free online IPR protectionplatform (at e 04.htm). After you are registered, ChinaCustoms can proactively monitor your brand and seizecounterfeits that are imported into or exported fromChina (see “IP Enforcement” section on pages 14–17). Conclude and register trademark licensing contracts. Monitor the market for infringing products. Other preventive measures include the following: or business partner arrange for registration andmaintenance of your trademark. Ensure that a trademark agent or law frm monitors theTrademark Gazette for applications for similar marks sothat you can oppose an application or seek to cancel aregistration.Consider fling even if you are only manufacturing inChina but do not have present plans to sell in the Chinamarket.There may be avenues other than the trademark lawsfor protecting your trademark rights. For example, acompany logo can be protected by both trademarkand copyright. A copyright in the company logo can beused as a “prior right” under China’s Trademark Law tooppose or cancel bad-faith trademark registrations.China provides enhanced protection for marks that aredeemed to be “well-known.” For example, such marksmay be given priority over similar marks that werepreviously registered in bad faith. However, note thatit is generally difcult for foreign rights holders to havetheir marks designated as well-known.Maintain ownership of your registrations withinyour company rather than having a local distributorU.S. Patent and Trademark Office Stopfakes.govChina IPR Toolkit 2021 6

PATENTSWhat is a patent?A patent for an invention is the grant of a property rightfrom the government to the inventor to prevent others,for a limited duration of time, from using, making, ofering for sale, selling, or importing the invention withoutthe patent owner’s consent. China’s National IntellectualProperty Administration (CNIPA) is the governmentauthority that receives and examines patent applications.CNIPA grants three types of patents—invention patents,utility model patents, and design patents: An invention patent is similar to a utility patent in theUnited States. It protects technical solutions, chemicalcompounds, and processes that are new, useful, andnonobvious. The term of protection is 20 years from thefling date (or the priority date, if priority is claimed). A utility model patent protects products with newshapes, structural physical features, or a combinationthereof. Methods of production or chemical compoundsare not protected by a utility model patent. The term ofprotection is 10 years from the fling date. A design patent protects t

Under China’s Trademark Law, foreigners or foreign enterprises must work with a China trademark agent or an organization that is qualifed to practice before the Trademark Ofce. However, if a foreign enterprise has a presence in Ch

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