Rules of Engagement: Trademark Strategies, Protection and Enforcement in China

by Paolo Beconcini

Overview

Rules of Engagement: A Practical Business Approach to Trademark Challenges in China

Paolo Beconcini

China now leads the world in number of registered trademarks. In recent years, however, higher volumes of enforcement have not brought about the end of trademark theft and counterfeiting. Consequently, most Westerners doing business in China (or preparing to do so) have negative views of the country’s system of intellectual property rights. This powerful book, by the world’s most experienced authority on how law and business interact in China’s trademark context, provides deeply informed and positive guidance for foreign brand owners seeking strategies that realistically engage with the Chinese legal and business landscape, thus showing how to reduce risk and benefit from the actually existing system.

The author sets forth “rules of engagement” – strategic rules of conduct that provide guidance as to how to learn, understand, and approach trademark challenges in China in an objective manner. Issues and topics covered include the following:

• acquisition of trademark rights in China;
• infringement of trademark rights and claim basis;
• preparatory investigation and case build-up;
• available enforcement tools and procedures;
• remedial strategies responding to trademark theft;
• evidentiary burdens in proving infringement;
• geographic location and specific characteristics of counterfeiting hubs;
• privileged relations between investigative companies and enforcing authorities; and
• increasing presence of online professional trademark thieves.

Detailed discussion of a number of cases (in fields including automotive, clothing, wine, pharmaceuticals, electronic devices, and sports apparel) isolate certain common patterns and prove that, aside from certain malfunctions of the trademark system, a substantial amount of responsibility for failure can be laid with the brands and not with China’s enforcement authorities.

With its comprehensive strategic approaches to dealing with trademark protection and enforcement in China, and its challenges to common legal thinking in the field, this book proposes and delivers new creative strategic solutions to unresolved problems related to trademarks in China. Interested lawyers and business persons can use the revelations about how anti-counterfeiting really works in China to help China bring about a change in the way state bodies enforce trademark rights. With the use of this book, lawyers counseling and advising clients on their China trademark portfolios and trademark protection strategies will bring great advantage to the brands they serve.

Product Details

ISBN-13:	9789041182548
Publisher:	Wolters Kluwer
Publication date:	10/26/2016
Pages:	256
Product dimensions:	6.30(w) x 9.70(h) x 1.50(d)

Table of Contents

About the Author vii

Perface xiii

List of Abbreviations xv

Chapter 1 An Introduction to Trademark Protection and Enforcement in China 1

§1.01 A Brief History of IPR Infringement in China 3

[A] On the Origins of Trademark Theft 6

[B] The 1990s 8

[C] Trademark Theft Evolves 13

[D] Trademark Theft and Nonfamous Brands: The Internet Revolution 23

§1.02 A Short Introduction to Trademark Counterfeiting 24

Chapter 2 Know the Rules and Play the Game 29

§2.01 Rules of Engagement: Concepts and Conditions for Successful Trademark Protection and Enforcement in China 29

[A] General Principles of Conducts when Enforcing IP Rights in China 30

[B] First Rule of Engagement: Strategic and Tactical Goal Setting 35

[C] Second Rule of Engagement: Know Your Enemy (Who Are Your Trademarks' Infringers?) 42

[1] Trademark Thieves (aka Trademark Squatters, Hijackers, and Grabbers) 44

[2] Infringers and Counterfeiters 48

[3] The Role of Preparatory Investigations and Case Build-Up in Trademark Litigation 52

[i] Desk Investigations and the Challenges of China's Internet 56

[ii] Field Investigations and Evidence Acquisition 65

[D] Third Rules of Engagement: Know the Battlefield - An Introduction 10 the Trademark Protection and Enforcement System in China 70

[1] Acquisition of Trademark Rights in China 72

[2] Available Rights and the Principle of Exclusivity 73

[3] Affirmative Actions 79

[i] Trademark Opposition 80

[ii] Trademaik Invalidations 81

[4] Infringement of Trademark Rights and Cause of Actions 86

[i] Similarity of Trademarks and Trademark Goods and Services 88

[ii] Likelihood of Confusion 89

[iii] Infringing Conducts 91

[5] Trademark Enforcement: Administrative Enforcement 91

[6] Trademark Enforcement: Judicial Enforcement 95

[i] Degrees of Civil Recourses 95

[ii] Courts and Jurisdiction 96

[iii] Claims and Remedies 99

[iv] Evidence: Burden of Proof 103

[v] Evidence: Formalities 105

|vi] Court Hearing and Evidence Cross-Examination and Evaluation 108

[vii] Prelawsuit Remedies and Measures 109

Chapter 3 Trademark Protection: Hostile Trademarks and Trademark Theft 113

§3.01 Lessons from a Typical Case of Trademark Hijacking 115

§3.02 Trademark Theft and Trademark Trolls: Challenges to the Build-Up of Brands in China 121

§3.03 Trademark Theft and Trademark Trolls: Challenges to the Build-Up of Brands in China 126

§3.04 The Free Ride of Trademarks and Procedural Strategies for the Recovery of Stolen Brands 137

§3.05 Invalidation of a Trademark Lacking Registration Requirements (Article 44 Trademark Law) 138

§3.06 Trademark Invalidation on Grounds of Existing Prior Rights (Article 45 Trademark Law) 139

§3.07 Cancellation for Nonuse 144

§3.08 Trademark Opposition 147

[A] Limiting Access to die Opposition Process 149

[B] Simplification of the Procedure for Trademark Opposition 150

[C] Grounds for Opposition: A Further Restriction 151

[D] Critical Review of the Use of Opposition Normally Made by Foreign Companies against Trademark Thieves and Free Riders 151

§3.09 Trademark Theft: A Bad Case but a Good Example: How Trademark Theft Affects Other IP Rights 154

§3.10 Conclusions to Chapter 3 160

Chapter 4 Against All Odds: Brand Protection in China 163

§4.01 Introduction to Trademark Counterfeiting in China 165

§4.02 The Role of Brands in Anti-counterfeiting 171

§4.03 Common Traits to Counterfeiting Organizations in China 178

§4.04 Online Counterfeiting: A New Face for an Old Problem 180

[A] The Dangers and Risks Posed by Online Counterfeiting 181

[B] Evolution of a Bad Relation: Alibaba versus The Brands 183

[1] Confrontational Approach and Its Legal Basis 183

[2] Cooperation and Self-Regulation: The Take-Down System 186

[C] Finding Enforcement Strategies That Work 188

§4.05 Anti-counterfeiting Enforcement in a Complex Environment 191

§4.06 A Brief Introduction to the Chinese Enforcement Apparatus and Other Relevant Players 193

[A] The Horizontal Structure of the Trademark Enforcement System in China 193

[B] The Vertical Structure of the Enforcement Agencies and Their Exposure to Local Factors 195

[C] The Important Role of Investigators and Informants 197

§4.07 The Legislative Frame: Available Enforcement Tools and Procedures 202

[A] Administrative Enforcement 203

[B] Criminal Enforcement 205

[C] Custom Protection 209

§4.08 Strategic Adjustments 211

[A] Seized Quantities versus Deterrence 212

[B] Degree of Deterrence of AIC Raids 214

[C] Conclusions 215

Chapter 5 Learned Lessons and Take-Aways 219

§5.01 Chop Chop Move Quick before Any Sign of Problems 219

§5.02 Knowledge Is the Key: Strategic Thinking and Fact Finding 220

§5.03 Few Secrets to Winning in Chinese Courts 221

§5.04 Fighting Counterfeiting and Breaking with the System 225

Bibliography and Periodicals 227

Index 231