More Favorable IPR Rulings from China's Provinces

China Daily ran an article today called "IPR Special" chronicling news stories related to intellectual property protection in China.  Not sure if this is going to become a regular feature, but I hope so.  The article talks about a number of pending and recently resolved lawsuits involving foreign companies.  It discusses the following:

1.  A Disney lawsuit currently pending in a Shenzhen Court.  The Walt Disney Company filed the lawsuit alleging Mickeyle, a Shenzhen-based children's clothing manufacturer, illegally uses Disney's registered trademark "MICKEY & CO" and "MICKEY UNLIMITED" without permission on its products.  Disney is seeking around $75,000 in damages and appears also to be seeking injunctive relief requiring Mickeyle stop using Disney trademarks.   

2.  A Chengdu, Sichuan Province, court just awarded 300,00 yuan (~$37,000) to Adobe Systems Incorporated in a software piracy case against a local information technology (IT) company that had installed 55 "pirated" copies of Adobe software in 22 computers for commercial purposes.  Adobe immediately filed a lawsuit against the company, but it took two years for the court to rule in its favor. This is the fourth intellectual property rights (IPR) lawsuit Adobe has won in China.  It is also the first such victory for an international software company in western China.  In a previous post, I blogged about how impressed I am with Adobe's handling of its Chinese business. This case increases my admiration.  I will note that for a layman two years seems like a long time to verdict in this sort of suit, but civil suits in the United States generally take about that long. 

3.  A Ouhai Wenzhou, Zhejiang Province, court recently sentenced a counterfeiter of ZIPPO lighters to prison for one and a half years and fined him 100,000 yuan (US$12,400). The counterfeiter possessed 32,980 counterfeit ZIPPO lighters and 6,000 fake lighter shells labeled "ZIPPO" and "MADE IN USA" worth an estimated $770,000.  The Ouhai Wenzhou administration uncovered the counterfeits and immediately informed US authorities of the situation and "quickly" arrested the counterfeiter. 

The article also discusses how a Shenzhen-based company has applied to register 128 "famous mainland trademarks" in Hong Kong.  According to the article, if the companies that own these trademarks do not oppose their registration in Hong Kong by this Shenzhen company, they "will have to pay astronomical ransoms for their trademarks, or be forever banned from the Hong Kong market." 

The trademarks cover more than 20 industries including pharmaceuticals, IT, clothing, food and chemicals. More than 30 of them are well-known Chinese trademarks.  The 128 trademarks will be granted legal protection within three months if no opposition is raised.  Experts called on the mainland companies involved to legally protect their rights as quickly as possible.

In the United States and most other British law systems, trademark rights arise out of use. However, in most countries, including China (and Hong Kong) trademark rights typically go to the first to file for the trademark. The well known trademark is an exception to the first to file rule. The Paris Convention for the Protection of Industrial Property, to which China and 168 other parties are signatories, calls for protection of well known trademarks even in countries where they are not registered.  Disputes often arise as to what is meant by well known and to what population well known is referring.  Is a trademark well known only in the United States to be considered well known in China as well? 

Unless a company is absolutely certain its trademark is so universally recognized that Chinese courts will invariably consider it a well known trademark, the wise course is to register your trademark in China before anyone else can register them first. Indeed, the high cost of litigation makes this the wise course for even those companies confident of their "well known" name.