Conference on Intellectual Property in the Global Marketplace Protecting and Enforcing Your Intellectual Property in China Susan Anthony Attorney-Advisor.

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Conference on Intellectual Property in the Global Marketplace Protecting and Enforcing Your Intellectual Property in China Susan Anthony Attorney-Advisor Office of International Relations U.S. Patent and Trademark Office

Why Care? This is not only a problem for U.S. companies doing business in China. –Chinese counterfeiters and pirates export to U.S. market. –Counterfeiters and pirates market at trade shows. –Counterfeiters and pirates may sell to your customers and suppliers.

Scope of the Problem Chinese counterfeiting and piracy affect you: –In the United States. China is the largest single source of seizures of infringing products by U.S. Customs. –In Third Countries. China is a leading source of seizures in the European Union, Japan and in many developing country markets, such as in South America, Southeast Asia, Africa and the Middle East.

Scope of the Problem Problem is Widespread. Counterfeiting (20% or more revenue lost of some products). Piracy (90% + of movies, motion pictures, software).

Catalyst for Change: WTO China joined the WTO on December 11, China agreed to implement the Agreement on the Trade Related Aspects of Intellectual Property (TRIPs) Agreement. Does China provide “adequate and effective” intellectual property protection?

Good news –China has amended its IP laws substantially. –The TRIPs Agreement keeps China accountable. –Other WTO Members can use TRIPs as leverage with China. Bad news –Cutting edge legal issues require further legislation. –Enforcement of IP laws is weak. Catalyst for Change: WTO

Do you plan to market in China? Do you plan to serve other foreign markets? Do you plan to manufacture in China? Do you plan to purchase supplies in China? Do you attend large international trade shows? Business Considerations

How important is intellectual property to your business model? Can your goods or services be copied or imitated? Business Considerations

REMEMBER: –IP rights are usually territorial. –Use the 3 R’s: Registration Recordation Remedies Protecting Your IP in China

Register Record Remedies Protecting Your IP in China

Patents –Must file patent applications with State IP Office (SIPO). –Rights are territorial. –China is “first to file” country. –Must use registered patent agent. Protecting Your IP: Registration

Trademarks –Must file trademark applications with the Chinese Trademark Office (CTO), which is part of the State Administration for Industry and Commerce (SAIC). –CTO provides administrative enforcement of trademarks throughout China. Tips for protecting your trademark –Do a trademark search. –Have the trademark registered in Chinese and English. –Secure other rights such as domain names, if necessary. Protecting Your IP: Registration

Copyright protection is available for all works at the point that the work is in any tangible form. There may still be reasons to register. –As a U.S. copyright owner, you must register in order to be able to bring suit in federal court for infringement. –Registration puts others on notice. –A U.S. registration may help to provide evidence in Chinese court. Protecting Your IP: Registration

Protecting Your IP: Recordation You can record your registered trademarks and copyrights with the U.S. Customs and Border Protection (CBP). Note: This procedure is not available for patents. This information is recorded (for a fee) and entered into an electronic database accessible by CBP officers across the country. CBP uses the information to actively monitor shipments and prevent the importation or exportation of infringing goods. A similar process exists for Chinese Customs.

Do you need assistance contacting any U.S. Embassies who may be able to help you find experienced intellectual property attorneys in your country of interest? Embassies maintain lawyer lists – as do some trade associations. Protecting Your IP: Remedies

Embassy and Consulate Activities Ambassador’s IPR Roundtable Consulate IPR events –Guangdong IPR Roundtable Commercial complaint assistance China IPR toolkit Embassy IPR action plan IPR, Customs and Legal Attaches –Container Security Initiative

Embassy and Consulate Activities

Handling Commercial Complaints Complaints to Commerce, State, U.S. Export Assistance Council and Embassy Collect information Assemble a team Consult technical experts Determine possible actions

Foreign Commercial Service

Trade Compliance Center

What We Can Do –Help companies navigate through China’s legal system. –Provide list of attorneys and/or consulting firms. –Monitor and inquire about case status. What We Can’t Do –Provide legal advice. –Advocate on behalf of a company where the company has not pursued legal action. –Try to influence the result of a case under adjudication. USG Help for IPR Rights Holders

USG IPR Contacts U.S. Department of State –Beijing: Mark Cohen (seconded from USPTO) and Adam Ross U.S. Department of Commerce –Beijing: Foreign Commercial Service – Cameron Werker –Beijing: Market Access and Compliance –Beijing: Trade Facilitation Office –Washington: Office of China Economic Area – Joshua Wu, Ellen Szymanski and Janene Marasciullo. –Washington: Sector-Specific Offices

USG IPR Contacts U.S. Patent and Trademark Office – Trademark – Copyright – Patent – Biotech – Enforcement

Section 337 Remedy If infringing products are being imported into the United States, and the company holds a registered patent, trademark or copyright for the product, you should consider filing a Section 337 complaint with the U.S. International Trade Commission to bar infringing products from entering the United States.

“Three Track” Chinese enforcement system –Administrative enforcement (by far the majority of all cases) Patent, TM, copyright, trade secret, plant varieties, etc. Customs –Civil enforcement –Criminal (least common) Using Remedies in China

Advantages –Inexpensive –Fast –Local –Expert agency –Nearly every IP right has an administrative agency –Don’t need a lawyer –May be able to obtain an injunction –Administrative agency may have other enforcement capabilities Administrative Enforcement

Disadvantages –“Local Protectionism” –Penalties usually non-deterrent –Non-transparent –Difficult to transfer to criminal prosecution –Limited geographic jurisdiction –Can’t reach international criminal activity –Damages for injured party not likely available Administrative Enforcement

Advantages –Specialized judiciary that may be trained in IPR –Availability of damages and injunctive remedies –Rights of appeal –Nationwide jurisdiction Civil Enforcement

Disadvantages –High cost –Low damage awards –Lack of independence of judiciary in many jurisdictions –Great difficulty in collecting damages, if awarded A Chinese judge’s Web site Civil Enforcement

Advantages –Can be brought by police/prosecutors or injured party –Deterrent damages possible (fine and imprisonment) –Possibility of civil damages in addition to criminal punishment –Potentially lower cost than civil litigation –Criminal measures for willful trademark counterfeiting and copyright piracy on a commercial scale are WTO obligations Criminal Enforcement

Disadvantages –Evidentiary standards have been lowered with the new judicial interpretation, but resource issues may still make these cases difficult to pursue –Not all IPR infringements are criminalized –Difficulties may exist in having administrative cases referred to criminal prosecution Criminal Enforcement

Advantages –Available for import and export –Stops goods in transit –Inexpensive –Stops the harm caused by export of counterfeit goods Customs Enforcement

Disadvantages –Most useful when you know the port the goods are being exported from –Storage charges and other expenses can be high –Customs can only inspect a limited percentage of goods exported Customs Enforcement

Ongoing WTO monitoring Multilateral work at WIPO Regional work in bodies such as ASEAN, APEC Bilateral work –JCCT –Continuation of USTR bilateral meetings –Extensive IP training Domestic efforts U.S. Government Efforts

USTR’s Special 301 Report –China’s status: Section 306 monitoring/OCR U.S. Embassy-Beijing –National trade estimate –China Mission IPR Action Plan –Ambassador’s IPR Roundtable USTR Annual Report on China’s WTO Compliance –September hearings Questions posed at TRIPS Council/other fora (see WTO Web site) USG Reports on IGR in China

China Mission IPR Focus in 2005 Improved IPR enforcement –Criminal enforcement: JI implementation –Administrative enforcement: Case transfer –Export controls (general bonding) Improved market access for IPR products

China Mission IPR Focus in 2005 Macro strategies: Action/Strategic plans –Patents (design patents; biotechnology) –Trademarks (TM Examination Manual) –Copyrights (WIPO Internet Treaties; NCAC Administrative Regulations on ISP Liability) Working with industry Special 301, benchmarking, WTO

APEC ASEAN The Trilateral Offices World Customs Organization Other Multilateral Bodies

USPTO has a strong relationship with: –The State Intellectual Property Office (SIPO) of China on Patent issues –The State Administration for Industry and Commerce (SAIC) and the China Trademark Office (CTO) on issues relating to trademarks, domain names, and geographical indications. –The National Copyright Administration (NCA) on copyright and related rights, including Internet issues Office-to-Office Activities

Long bilateral relationship between U.S. and China Several bilateral agreements including IP issues dating back to the early 1990s Regular bilateral consultations since WTO accession between U.S. and China U.S.-China Joint Commission on Commerce and Trade IPR Working Group U.S.-China Bilateral Work

USPTO has conducted many training programs for Chinese officials. –In China –In the U.S. –In the region –By videoconference –On both substantive issues and enforcement Training

USPTO has a comprehensive and experienced China IPR team, including: –TM expert –Copyright expert –Patent expert –Enforcement expert USPTO recently appointed an IP attaché to the U.S. Embassy in Beijing. USPTO China IP Expertise

Mark Cohen will work with government officials to improve Chinese intellectual property laws, regulations and enforcement procedures. USPTO China IP Expertise

Established in 1999 USPTO Director co-chairs May develop a new role in combating piracy and counterfeiting in China NIPLECC

Rightsholders can call 1 (866) 999-HALT Multi-agency effort involving: –Department of Commerce –Department of Justice –Department of Homeland Security Multifaceted effort using each agency’s resources to best tackle the problem STOP Initiative

Would you like to speak to U.S. Government experts that can help you devise a strategy to fight back? The company may be directed to the Commerce IPR hotline where Commerce experts can suggest strategies to evaluate IPR problems encountered abroad. Companies can contact the Commerce Department at: HALT (4258). STOP Hotline

Conference on Intellectual Property in the Global Marketplace THANK YOU Protecting and Enforcing Your Intellectual Property in China