Highlights of the 2022 IP Key China closing ceremony

Last week Reinout van Malenstein, partner at HFG, took part as speaker to the 2022 IP Key China closing ceremony. Here all the details.

IP Key China is an EU Project designed to enhance EU-China cooperation on selected emerging challenges in the area of intellectual property (IP). It is led and funded by the European Commission who have entrusted its implementation to the European Union Intellectual Property Office (EUIPO). During the 19th EU - China Summit held in Brussels at the beginning of June 2017, EU Trade Commissioner, Ms Cecilia Malmström, and the Chinese Minister of Commerce, Mr Zhong Shan, signed the arrangement for the IP Cooperation Project – IP Key China.

Speakers at the closing ceremony included Ignacio de Medrano,  Head of International Cooperation Service of EUIPO, Li Ming Deputy Director General at the Ministry of Commerce of the People’s Republic of China, Agata Gerba Deputy Head of Unit, Investment and Intellectual Property, DG TRADE, European Commission, Daniela Di Virgilio, IP Key China project management team, Benoit Misonne IP Attaché to the EU Delegation to China, He Zhao, Secretary General, Beijing Anti-Infringement and Anti-Counterfeiting Alliance CAASA and Helene Juramy, Trade Officer at the EU Delegation to China.

Reinout van Malenstein was on a panel moderated by Benoit Misonne, IP attaché of the EU Delegation to China. Reinout addressed current issues in Chinese IP law and ways to address these issues by changing the law, regulations, trademark examination or case law.

The four topics Reinout brought forward were on e-commerce, bad faith trademark registration, letters of consent and COVID formalities.  Below a short overview of these four points will be addressed.

E-commerce: liability for e-commerce platforms and telecommunication service providers

More and more infringement through ecommerce is found at EU borders. For this reason enforcement on e-commerce platforms in China is very important. In accordance with the Chinese law the rightholder only has a short time that he or she can  take action with the courts if the e-commerce platform receives no infringement statement from the infringer. This time should be longer, or there should be more rules to what qualifies as evidence from the alleged infringer.

A further problem with e-commerce is that more and more infringement is found on platforms that call themselves telecommunication platforms and services. As such they would not fall within liability of the e-commerce law, and thus are not required to provide information on the infringers or actively help to take down these infringements.

Telecommunication services providers have been used in the past as evidence for court cases, and the hope would be that these telecommunication platforms would be willing to give info of infringers to courts, and ideally will also be seen as e-commerce platforms. Such a new situation will help and will make it lots easier to curb e-commerce IP infringement

Bad faith trademark registration, unfair competition and punitive damages

There need to be a deterrent for trademark bad faith applicants to stop applying for these trademarks. China has been more and more successful against trademark applications in bad faith. China’s laws and regulations should provide further tools against bad faith trademark registration and punitive damages.

Recently there have been two interesting court cases regarding bad faith. The Fujian High Court made a judgement, determining that bad faith registration is unfair-competition. Furthermore, in Shenzhen Intermediate Court on March 11, 2022 a company also successfully claimed damage against the squatters in a case based on unfair competition. The damage is sufficient to cover the company’s expenses for filing opposition, invalidation and the lawsuit. It is encouraged that bad faith trademark infringers will be punished and have to pay punitive damages to the real company.

Letter of consents for trademark registration

Until recently if there was a letter of consent between trademark holders, trademarks would generally be registered by CNIPA. Lately this has changed to a stricter approach.

When letter of consents are not accepted by CNIPA, companies are forced to challenge the CNIPA decision at the courts. What we would like to share is the thinking that if companies are ok with co-existence, and they are not in each other’s waters, the registration should be allowed by CNIPA.

In case a letter of consent is not enough, companies should put forward co-existence agreements for China in order to show CNIPA that here will be no problem in the future.

Covid and Formalities

Many lawsuits, AIC actions, IPO actions could not be started due to formalities not being able to match due to COVID and closure of embassies. Legalization was not possible for a long time, whilst it is not possible to start many actions without legalization of documents. There needs to be a mechanism that would allow companies to still put forward cases without significant delay in case of emergency or pandemic.

New IP Key project

Good news is that the project will be funded again by the European Union and the Chinese government. The new IP key project starts in September 2022. HFG congratulations the European Union and the Chinese government on this remarkable project.