(By You Yunting) This March, at the invitation of the U.S. government, Mr. You Yunting, the founder of Bridge IP Commentary began his journey to the United States. The main purpose of this visit was to better understand the system of intellectual property rights in the United States. Mr. You would like to share with our readers his experiences there in several posts here on our website. Of course, the content of the posts may not be truly comprehensive or strictly accurate; that being said, if you find any mistakes or comments that can be corrected or improved upon, please let us know. We encourage more dialogue with the IPR community and welcome all constructive commentary. The following is the first post in a series of Mr. You’s visit to the United States:
On the second day of the visit, my associates and I held a meeting with officials from the US Department of Commerce in charge of IPR issues in East Asia. Their main responsibilities are to aid US companies in protecting their intellectual property rights in China. All of the officials impressed me with their professional competence; indeed, some of them originally worked in law offices handling IPR issues related to China, thus giving them have a comprehensive understanding of IPR issues in the country. The US authorities showed us its focus on the most practical issues, and all the information they shared with us concentrated on company business. The main topic of the discussion was centered on how US companies register and protect their IPR in China. The following roughly outline the minutes of the meeting:
In terms of patents, there is no corresponding regulation in US Patent Law like utility model patents as stipulated in China’s Patent Law. If US companies would like to gain the legal protection over their IPR, one option available to them is to apply for a patent as an invention and as a utility model. The officials also stressed that the official fees collected for the utility application are much lower than that of an invention. For this reason, it would not cost a company too much to ensure some form of IPR protection in China with these options available.
With respect to trademarks, despite both China and the US adopting the Nice Classification to sort its products or services, sub-classes under class 45 main classes exist in China, whereas in the United States this classification does not exist. For this reason, when US companies apply for trademark protection in China, they should be certain their application for trademark registration also covers these aforementioned sub-classes. In addition, US companies should not only file an application in the classes specifically related to their products or services, but also in related classes, since China’s Trademark Law provides that only a well-known trademark can be protected across multiple classes, and the requirements one must meet to be considered a well-known trademark in China are exceedingly high.
As for copyright, as stipulated in both the laws of the United States and China, copyright protection is granted automatically once a creative work comes into existence. Therefore, if a US company has registered its copyright in the US, but had not yet applied for copyright registration in China, the US application could be adopted in China as proof of whom owns the rights in the copyrighted work.
Finally, if a company is involved in the manufacturing industry, it should move to make a record with Customs following its IPR registration.
After the US officials’ introduction, my associates and I raised some questions for discussion.
I. Notorious Markets. It seems most big companies in China, like Baidu and Alibaba’s Taobao, have at one point or another been listed as being “notorious” markets by the US government. My first question regarded how the US government decides who shall be added to such a list, and once placed on that list, what changes or improvements must be made in order to be removed from it. The US government officials explained that the US Department of Commerce works with other US government authorities to decide who shall be added to the notorious market list, taking into consideration complaints made by US companies and the results of an investigation carried out by the authorities themselves. On the same note, if companies on the notorious market list have made proper efforts to improve their reputation, the US government will consider removing them from the list, with a combination of a report of the listed company itself. The officials mentioned Taobao as a great example of this process.
II. OEM. OEMs are typically concerned with trademark law, and the main problem is this: if a manufacturing company’s product has infringed the trademark right of an entity in China, but the product covered by that trademark is not actually sold in China, and is manufactured for export only, then will the sole manufacture of it be deemed to be infringement? The US officials had a deep understanding of Chinese laws, and they knew that the courts in Shanghai and Guangdong have arrived at different conclusions and handed down different judgments over the same type of dispute. Furthermore, they confessed that they had also been confused by this issue, since US companies also have two kinds of benefits concerning that. The first kind of companies are those transnational companies with noted brands, who will apply their trademarks globally. For this reason, even knockoffs manufactured by Chinese companies are not to be sold in China, because the trademark right of the US holders would also be damaged. On that note, some US company’s trademarks would also be squatted in China, even if they are only assembled or manufactured in China and subsequently exported to other countries. At that time, if trademark infringement is determined, surely it would also damage such companies’ benefits and profits.