Chinese IP system 2020: a quick guide to solve problems

Too many times already we wake up and come across with news and headlines highlighting the implementation of new regulations in China that will tackle, once and for all, intellectual property rights infringement activities.

And even though the efforts of Chinese authorities those IP right’s owners taking legal actions against counterfeiters find themselves many times in a never-ending story were detecting and stopping them is complex and costly.  

China is a vast and complex country. And as in other complex and large administrative structures the implementation and effectiveness of new regulations requires time, and so does the expectation of consistency in the application of new rules by the competent authorities.

As in many other fields in China, this one is no different and patience is the key for success.

Notwithstanding, we must point out that legal certainty in the Chinese IP system and the efficiency of the actions taken against infringers have significantly improved in the last years. 

And current practice and new regulations certainly indicate this is the trend we may expect for the future, where we will see a more solid and efficient IP system.

The intentions to improve the Chinese IP system were set a long time ago by the Chinese government. And new measures to turn those intentions into reality are continually being developed and implemented.

This time, we would like to highlight a new series of policies and legal steps taken by the Chinese Government in 2020 intended to tackle trademark infringements and improve the efficiency of enforcement actions.

These new policies are mostly compiled in two main documents:

1. ‘Criteria for Determining Trademark Infringement’ (Criteria) was introduced to provide detailed guidelines on the enforcement of trademarks.

2. A 35-point plan entitled ‘Key Points of the Nationwide Crackdown on Intellectual Property Infringement and the Production and Sale of Counterfeit and Inferior Goods in 2020’(Key Points).

What is outlined in the Criteria for Determining ‘Trademark Infringement’?

The Criteria is basically a clarification of the Trademark Law, providing practical guidelines (specifically intended for local authorities and administrative personnel) applicable to conclude whether trademark rights have been infringed.

For instance: 

• a specific definition of trademark use, with examples included in areas such as advertising and online;

• a principle for determining identical and similar goods and services;

• guidance on determining when and how trademarks are identical and similar;

• clarification on the circumstances for exempting a seller’s liability, which does not include repeated violations.

What can be the impact of these guidelines fortrademark owners?

• Brand owners can expect better, quicker results through administrative actions.

• It also offers solutions to problems specifically caused by internet-related businesses.

Trademark protection efforts in China should become more effective. 

For a long time, companies struggling with counterfeiters complained of a variety of localities not accepting their requests for administrative actions against infringers or applying different standards and/or thresholds to accept the cases.

In many cases, law enforcement authorities were interpreting and applying relevant laws mechanically or not interpreting them at all and being too rigid when applying the regulations. 

Now, with these detailed and comprehensive set of criteria, both trademark owners and AMR officials can use the same standards to determine if there is trademark infringement.

What can we expect from the implementation of the Key Points?

The introduction of the Key Points is a signal that the government will support the protection of foreign trademarks and prosecute bad-faith filers, thus enhancing the business operating environment to make it more welcoming.

Summarizing, the Key Points set out provisions that tackle the following main issues:

• tackle online infringement and counterfeiting more seriously. This includes increasing the supervision of consumer goods and a crackdown on counterfeit and infringing goods in online markets;

• increase protection for wholly foreign-owned enterprises and foreign and well-known trademarks;

• further promote judicial protection and improve the convergence of the ‘dual track’ mechanism of civil and administrative enforcement. This will involve crackdowns on repeated and malicious infringement, the application of punitive compensation for IP infringement disputes and a deepening of cooperation between administrative law enforcement and judicial agencies.

This is just one of the latest examples of new policies and regulations introduced by the Chinese Government to develop and improve the consistency and effectiveness of the IP system in China.

Now, time will tell us whether the implementation of these new rules in practice is also successful and if this so-long-expected impact in the Chinese IP environment becomes real.