The Impact of the Hague Agreement on the Layout of Chinese Enterprise Design Patents

(By Ye Sushuo) On February 5, 2022, World Intellectual Property Organization announced that China has joined the Hague System for the International Registration of Industrial Designs. China became the 68th contracting party to the Geneva Act of the Hague Agreement (1999) and the 77th member of the Hague Union. The number of design applications in China has ranked first in the world in recent years. In 2017, the number of design patent applications accepted in China was 629,000, in 2018 it was 709,000, in 2019 it was 712,000, and in 2020 it was 771,000, showing an upward trend year by year. The new “Patent Law” that has come into effect has also pushed China’s design protection to a higher level. Under the Hague Agreement, enterprises should also pay more attention to the layout of design patents.

 1. The extension of the design protection period under the new patent law is linked to the Hague Agreement

On June 1, 2021, China’s newly amended Patent Law officially came into force, which extended the term of protection for design patents to fifteen years. On the one hand, it reflects the strengthening of China’s protection of design patents. On the other hand, it is helps China to join the Hague Agreement on the International Registration of Industrial Designs (hereinafter referred to as the Hague Agreement), as the Hague Agreement (Geneva Act) requires that the term of protection in the designated Contracting Party be not less than fifteen years from the date of the international registration. The Hague System, or the International Design Registration System, based on the Hague Agreement, is an international system in the field of intellectual property that keeps pace with the Patent Cooperation Treaty (PCT) and the Madrid System for the International Registration of Trademarks (Madrid System) under the World Intellectual Property Organization (WIPO). Under the Hague System, applicants can register up to 100 designs in 75 Contracting Parties (covering 93 countries) by filing only one international application. Therefore, the Hague System provides a practical and convenient solution for foreign or multi-national filings of industrial designs, the above is also the introduction to the Hague System on WIPO’s official website.

 2. Current Situation and Analysis of International Design Patent Applications under the Hague System

According to the “Hague Yearly Review 2021 – Executive Summary: International Registration of Industrial Designs” (hereinafter referred to as “The Hague Yearly 2021“), the number of international design applications filed through the Hague System in 2020 was 5,792, a decrease of 1.7% from the previous year. In addition, the number of designs included in international applications in 2020 was 18,580, down 15% from the previous year–the first decline since 2006. The main reason is that in 2020, the number of designs in Germany, Italy and South Korea dropped significantly.

(1) The top ten countries of origin with the number of design items included in the Hague System applications in 2020 (see Figure 1)

Compared with 2019, although the number of applications in Germany in 2020 dropped by 18.7%, it did not prevent Germany from continuing to top the list with 3,666 designs. Among the top ten, the United States jumped to the second place with the largest increase of 62.7% (the sixth in 2019), and the number of design items included in the application was 2,211. This was followed by Switzerland with 1,944, South Korea with 1,669, Italy with 1,231 and the Netherlands with 999. Japan, which joined the Hague system at the same time as the United States, has gradually improved its ranking and is the seventh largest user of the Hague system. China, which is not a member of the Hague System, ranks ninth. Among the top 10 countries of origin, the United States (+62.7%), Turkey (+34.7%) and China (+22.7%) are the only 3 to experience growth in 2020. The ranking here is the top ten countries of origin with the number of design items in the application, and does not include regional organizations or intergovernmental organizations, such as the European Union Intellectual Property Organization (EUIPO for short, EUIPO is responsible for the registration and management of community designs).

It should be noted that the Hague System allows the filing of an international application by a subject with a real industrial or commercial place of business in a Contracting Party. Therefore, although China was not a member of the Hague System before, if a Chinese company has a branch in a country and the country is a signatory to the Hague Agreement, the Chinese company can submit an international application under the Hague System. The following Beijing Xiaomi This is the case with Mobile Software Ltd.

(2) The number of international applications for industrial designs at home and abroad (see Table 1)

For many years, South Korea’s two electronics giants, Samsung and LG, have been in the top 10 in international filings, and Samsung has been No. 1 for four consecutive years since 2017 [Same footnote 8, 2021 executive summary body, p. ], 859 designs have been announced and registered in 2020. Although LG has declined, it has not fallen out of the top ten, ranking sixth with 478. Procter & Gamble of the United States, Fonkel Meubelmarketing of the Netherlands, and Volkswagen of Germany ranked second, third and fourth respectively. The number of applications of Beijing Xiaomi Mobile Software Co., Ltd. quadrupled compared to the previous year, making it into the top five for the first time with 516 applications, and it is also the first time for a Chinese company to enter the top five. Among the top ten applicants, 3 companies are from Germany, 2 companies each from the Netherlands, South Korea and the United States, and 1 company is from China. Lampenwelt of Germany, a new user of the Hague System, ranked tenth with 276 designs. Among the top ten applicants, Germany’s Wenko-Wenselaar (352 new designs in 2020) and China’s Beijing Xiaomi Mobile Software (344 new designs) registered between 2019 and 2020. Published designs grew the fastest.

Top Hague applicants, 2018–2020
Ranking Applicant’s name Origin 2018 2019 2020
1 Samsung Electronics Co., Ltd Korea 863 929 859
2 Procter & Gamble Co. U.S. 561 405 623
3 Fonkel Meubelmarketing Netherlands 408 859 569
4 Volkswagen Ag Germany 268 536 524
5 Beijing Xiaomi Mobile Software Co., Ltd. China 14 172 516
6 LG Electronics Inc. Korea 715 598 478
7 Koninklijke Philips Electronics N.V. Netherlands 164 371 463
8 Wenko-Wenselaar Gmbh & Co. Kg Germany 262 10 362
9 Magic Leap, Inc. U.S. 5 63 320
10 Lampenwelt Gmbh Germany 0 0 276
Table1(Source: WIPO Statistics Database, March 2021.)

 

(3) The most designated categories in international applications (see Table 2)

The Locarno Classification (LOC), the full name of the Locarno Agreement for the Establishment of an International Classification of Industrial Designs, is a classification of goods for the registration of industrial designs, which has been updated to the 13th edition in 2020. In 2020, the top ten most designated categories together accounted for 65.6% of the total number of designs. Among the top ten categories, pharmaceuticals and cosmetics (+42.8%) grew significantly in 2020. In addition to this, designs related to the prevention of accidents (Class 29) had the largest increase of 262%, and designs related to medical and laboratory equipment (Class 24), which increased by 45%, these are very large. To a certain extent, it is reflected in the innovation generated in the process of responding to the 2019 new crown epidemic.

Designs contained in international applications by class, 2018–2020
Class 2018 2019 2020 Growth rate(%)2019-2020
Class12 Means of transport 1662 2075 1879 -9.4
Class14 Recording and communication equipment 2031 2971 1653 -44.4
Class9 Recording and communication equipment 1220 1441 1568 8.8
Class6 Furnishing 2352 2187 1379 -36.9
Class26 Lighting apparatus 1196 1357 1278 -5.8
Class11 Articles of adornment 866 960 1033 7.6
Class23 Heating and cooling equipment 1064 1173 998 -14.9
Class7 Household goods 709 773 836 8.2
Class25 Building units and construction elements 505 812 793 -2.3
Class28 Pharmaceutical and cosmetic products 785 542 774 42.8
Table2(Source: WIPO Statistics Database, March 2021.)

 

3. Analysis on the Status Quo of Chinese Enterprises’ International Design Applications

(1) Application status of Xiaomi Mobile, a pioneer in international applications

Taking Beijing Xiaomi Mobile Software Co., Ltd. as an example (hereinafter referred to as “Xiaomi Mobile”), through the Global Design Database on the WIPO official website to search, Xiaomi Mobile started to apply for international design through the Hague system as early as the end of 2017. As mentioned above, the Hague system allows entities with a real place of business in a contracting party to submit an international application to the World Intellectual Property Organization, while Xiaomi Mobile has multiple distributors in Singapore with real and effective places of business, and Singapore is the Therefore, even though my country has not yet become a party to the Hague Agreement, Xiaomi Mobile has already taken the lead among many Chinese companies to submit applications for international design registration through the Hague system, truly achieving trade and investment abroad, intellectual property first, and some other domestic companies. Enterprises are also active in the Hague system like Xiaomi Mobile, such as Lenovo, Gree Electric, and Midea Group.

The Hague System simplifies the process of multi-national registration and establishes a single international procedure for the protection of designs in multiple jurisdictions. The applicant can list the members of The Hague (called “designated members”) whose designs are to be protected. The designated members of Xiaomi Mobile include the European Union, Russia, the United Kingdom, the United States, Switzerland, Germany, South Korea, Singapore, Japan, Turkey, Norway, Canada, etc. The designated classes are mainly concentrated in: household goods (Class 7), clocks and other measuring, checking and signaling instruments (Class 10), electrical production, distribution or conversion equipment (Class 13), recording, telecommunications or data processing Equipment (Class 14), Machines (Class 15), Games, toys, tents and sporting goods (Class 21), (Class 23), of which Class 14 recording, telecommunications or data processing equipment has the largest number of applications , which is also in line with the public’s expectation that Xiaomi Mobile will focus on digital digital products. It can be seen that when an enterprise deploys overseas applications, it should apply for the design of different products in different categories in combination with its own development goals and business characteristics.

(2) Analysis of the international application status of industrial designs in Zhejiang

Taking the area where the author practices as an example, the same as the development trend of domestic applications in recent years, since 2015, the number of design applications in Wenzhou has been on the rise. 16,270 cases in 2020, but there is still a huge gap in international applications.

Since the Global Design Database does not support the search by the applicant’s address, the author uses a domestic patent database to search for the number of overseas applications in Wenzhou, by limiting the applicant’s address to “Wenzhou, Zhejiang, China”, the total number of international applications retrieved over the years was 276, of which 261 were submitted to the EU, 6 from Japan, 5 from the UK, 2 from Vietnam, and 1 from Hong Kong, China. Hague system submission. Although the amount is not large, the number of international applications of Wenzhou enterprises is increasing year by year. While Wenzhou has a total of more than 114,000 domestic applications over the years, the top ten companies in Wenzhou’s domestic applications are not among the top five in Wenzhou’s international applications. It can be seen that Wenzhou enterprises are not prominent in international applications, and overseas applications still need to be deployed. The geographical scope is expanded to Zhejiang Province (the applicant’s address is limited to “Zhejiang, China”), and the total number of international applications is 6,699, of which 5,846 are submitted through the European Union, accounting for 87.3%, far exceeding the number of overseas applications in other regions number of applications. However, through the above search, it is also found that there is no company in Zhejiang that has already applied for a free ride under the Hague system in advance like Xiaomi Mobile. This is the application path that Zhejiang enterprises should consider, and should be put on the agenda as soon as possible. By learning the relevant knowledge of the Hague system, they can understand the registration rules in a timely and effective manner, and prepare for better overseas layout in the future.

4. New ideas for the layout of corporate design patents under the Hague Agreement

Whether the design application is filed through the national (regional) offices or the Hague system, it has been demonstrated that the globalization and facilitation of design applications are in progress. In the process of global economic development, China’s dominant position is becoming more and more obvious, which is also motivating enterprises to go abroad and open the trade market. Enterprises must also continuously improve their comprehensive strength and make layouts in terms of innovation, and design patents are essential. The Hague Agreement (1999 text) will enter into force in my country on May 5, 2022. Some domestic enterprises have already taken advantage of the system to take advantage of the layout of international design applications. It is conceivable that in the future, the demand for filing international design applications in the Hague system will increase significantly, which is an opportunity for domestic manufacturing and related service industries. Therefore, domestic enterprises should be prepared, and the relevant product managers or designers should be sensitive to the new regulations of the law, so as to deploy overseas markets in advance. Some typical enterprises in China have realized the importance of overseas layout of design applications and have successfully occupied the high ground. We should absorb the advantages of such enterprises, integrate innovation into enterprise development, and take design patents as an important dimension of enterprise innovation evaluation, so that “Created in China”, “Designed in China” and “Made in China” can better go abroad and go global.

 

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