China - Intellectual Property
General Administration of Customs Promulgates New Implementing Rules for Customs Protection of Intellectual Property Rights
Updated Rules for Recognizing Famous Trademarks
New Administrative Measures for Software Products
China - Foreign Investment
Update to Rules on Approval of Foreign Invested Enterprises
Taiwan - IP
Internet Service Provider Liability Limitation Bill to Amend the Copyright Law
Taiwan Intellectual Property Office Announces Directory of Well-Known Trademarks
and Case Studies
State Administration of Industry and Commerce Promulgates Rules for Recognizing Famous Trademarks
On April 21, 2009, the State Administration of Industry and Commerce ("SAIC") promulgated the Rules for Recognizing Famous Trademarks ("Rules"), which came into force that same day.
The Rules require that the Trademark Office ("TMO") and the Trademark Review and Adjudication Board ("TRAB") consider the following factors in order to determine if a mark is famous: 1) reputation of a mark among the relevant public; 2) use of the trademark over a continuous period of time; 3) advertisement of the trademark over a continuous period of time, 4) the degree and geographical area of the advertising; 5) any record of protection of the mark as a famous mark in China or other countries; and 6) any other factors that relate to the reputation of the mark worldwide.
The Rules also require that the Central Disciplinary Committee and the Ministry of Supervision supervise the recognition work of the TMO and TRAB, by attending the meetings at which the recognition of a famous mark is discussed and examined. The supervision is intended to prevent or reduce opportunities for corruption to affect the recognition process.
New Administrative Measures for Software Products
On March 5, 2009, the Ministry of Industry and Information Technology ("MIIT") promulgated the Administrative Measures for Software Products ("Administrative Measures"), which came into force on April 10, 2009. The New Administrative Measures replace the old Administrative Measures promulgated in 2000.
The new Administrative Measures differ from the old Administrative Measures in the following ways:
- Upon receipt of an application to register a software product on any designated media, the MIIT is required to publish a public notification to announce the software application. If the an opposition is not filed within 7 working days from the issuance of the public notification, the local software industry authority will approve the software registration application and issue the software product registration number and registration certificate.
- Local software industry authorities are no longer allowed to cancel software product registrations suspected of violations of law, bad faith registration, or which fail to satisfy national technical requirements. Local software industries must now report these suspected improper software registrations to the MIIT, and the MIIT should provide any necessary warnings, publish public notifications, or impose penalties against improper registrations.
- Various clauses restricting the production and distribution of unregistered software products have been deleted in the new Administrative Measures. This may imply that the MIIT is loosening the supervision of unregistered software products.
Update to Approval of Foreign-Invested Enterprises
In March 2009, the Ministry of Commerce ("MOC") announced a Notice on Further Improving the Examination and Approval of Foreign-Investment Enterprises ("Notice"). Taking effect immediately, the Notice simplifies the MOC's examination and approval procedures for foreign-invested enterprise operations. The Notice will make it easier for foreign investors starting new entities in China, and implements many changes, including the following:
- Establishment of a branch of a foreign-invested enterprise now only requires recording the establishment of their branch with local commercial authorities before beginning operations. Previously, a branch had to undergo examination and approval by the local commercial authority before they could be set up.
- The MOC now delegates examination and approval power for large projects to the provincial commercial authorities and economic and technological development zones, unless the foreign invested enterprises operates projects that require substantial state resources or involve substantial state and economic interests. Previously, foreign-invested enterprises with a total investment amount of over US$100 million were subject to the examination and approval by the MOC for their establishment or modification of their capital, drafting of company charter and rules.
Internet Service Provider Liability Limitation Bill to Amend the Copyright Law
China's safe harbor law for Internet service providers ("ISP"s) has been in draft form for some time. On April 21, 2009, the Legislative Yuan completed the third reading of the draft Internet Service Provider Liability Limitation Bill ("ISP Bill"). The ISP Bill is now awaiting review by the Presidential Office. If promulgated by the President, the ISP Bill will implement the following changes to the existing Copyright Law:
- Upon discovery of online copyright infringement, copyright owners may either file legal proceedings directly, or notify the ISP operating the website with infringing content to remove the infringing content or information.
- ISPs must clearly inform users of the ISP's copyright protection regulations prior to providing service. In addition, ISPs must inform users that partial or complete termination of services will be carried out if the user is accused 3 in separate instances of infringement. ISPs that act according to the ISP bill will be exempt from civil liability for alleged infringement, or contractual liability to the alleged infringer. Internet users found to be infringing on copyrights should find the infringing content removed by the ISP. If the users do not submit a rebuttal to a copyright owner's take down notice, with a request to restore the removed content, the content should remain off the site.
Directory of Well-Known Trademarks
On March 17, 2009, the Taiwan Intellectual Property Office ("TIPO") announced that it had compiled a list of all administrative decisions, and legal judgments rendered by the civil and criminal courts where trademarks had been deemed to be well-known within the last five years. The directory will be available to enforcement agencies, industries, scholastic institutions, and should help improve the protection of well-known marks.
Some examples of well-known trademarks listed in this directory are AEROSMITH & Design, COORS, MIT, QUARK, and QUARKXPRESS.
China Increases the Number of Industries Open to Foreign Investment from 267 to 400+
Four New IP Courts to be Established in Shanghai
Third Amendment to China's Patent Law Approved
Trademark Applications Skyrocket in China
Chinese Luxury Hotel Held Liable for Infringement by Tenant
Energizer Loses in U.S. Court against Chinese Manufacturers
China Food Safely Law in Drafting Stages
China Website Sues the MPAA for Defamation after Settling a Piracy Case
Revisions to Lawyer's Law
Revisions to Civil Procedure Law Announced
New Law on Mediation and Arbitration of Labor Disputes Adopted
State Establishes Regulations on Paid Annual Leave for Employees
Business Income Tax Revisions
Major Revisions to the Catalogue for Foreign Investment
Supreme Court Rules on Foreign-Related Contract Disputes
Law on the Advancement of Science and Technology
Automatic Monitoring of Internet Pirated Content - Until May
New Regulations for Online Content Providers
New Labor Contract Law
New Version Of Anti-Trust Law
Administrative measures to Protect Trademarks
China Adopts 9th Edition of International Goods Classifications
Royalties on Internet Content
New Guidelines on Music Websites
Elimination of De Facto Compulsory License System
Supreme Court Issues Notice on Limited Discovery in Property Cases
China to Impose Stricter Penalties for IPR Violations
More Courts Allowed to Handle Patent Cases
Third Revision Drafted for Patent Law
IPR Development in National Plan
Easier Market Entry for Chain Stores
New IPR Courts
Changes to Patent and Trademark Appeals
Courts' Subordinate Role Confirmed in new People's Congress Supervision Law
Partnership Enterprise Law Revised
New M&A Regulations
Corporate Bankruptcy Law Adopted
First Criminal Copyright Violations of Online Games
LV wins Unfair Competition Claim over Billboard Showing Handbag
Chinese Cybersquatters and Trademark Squatters Continue to Reap Profits on World Famous Trademarks
Regulation of Email and Spam
Constitutional Law Review
Open Court for Death Penalty Appeals
New Rules on Public Security Violations
Domain Name Disputes
Patent Law Reform
Foreign Trade Law Amended to Comply with China's WTO Commitments
New Regulations on Drug Import Took Effect on January 1, 2004
China Further Opens Up to Foreign Investment in Distribution Services
MOFCOM Amended the Regulations on Establishment of Investing Companies by Foreign Investors
Rules Promulgated to Govern Establishment of Foreign Invested Conference Exhibition Companies in China
Foreign Investment in China's Domestic Financial Institutions
Changes Made to Regulate Representative Offices of Foreign Insurance Institutions in China
China's Customs Service Strengthens Intellectual Property Protection
The Supreme Court Revises Its Interpretations on Trial of Internet Copyright Disputes in China
New Implementation Rules for Copyright Administrative Punishment
Certification and Accreditation Act
Administrative Permit Law
China Further Lifted Restrictions on Foreign Trade Authorities
New Financing Channel Available for Securities Companies
More Detailed Rules on Administration of QFII Foreign Exchange Issued
Shanghai Government Issued Detailed Rules for Foreign Investment in State-Owned Enterprises in Shanghai
Multinational Corporations' Regional Headquarters in Shanghai Encouraged
Foreign Invested R&D Centers in Shanghai
Cybersquatting Cases Hinge on Infringed Marks’ Chinese Fame
New Regulations on Famous Mark Verification and Protection
Rules on Registration and Administration of Certification Marks and Collective Marks
Implementation Rules for Madrid International Trademark Registrations
Regulations on Administration of Technology Import and Export
China Gradually Opening its Banking Market
Foreign Insurance Companies Shut Down
New Internet Information Service Regulation
According to the statistics from the Ministry of Foreign Trade and Economic Cooperation (MOFTEC), China had 324,712 companies with foreign investment by the end of last year. Different levels of foreign trade and economic cooperation development zones attract a majority of foreign investment in China. In 1998, thirty-two state-level development zones attracted over US$10 billion of foreign direct investment in China, which is nearly 60% of the total foreign direct investment in 1998. This year, various special zones are being formed. For instance, in Beijing, a special valley for trade and investment in medical and biological areas is being constructed in the Beijing Economic and Technological Development Zone. In Shenzhen, a special software industrial park is under construction. In Guangzhou, the Guangzhou Economic and Technological Development Zone and Guangzhou High-Tech Industry Development Zone merged with each other late last year. The merged zone aims to lure more foreign investment in high- and new-technology industry, especially electronics, information technology, bio-engineering technology, medical science, optical, electrical and mechanical integration technology, and environmental protection technologies and equipment.
Taiwan Intellectual Property Office (TIPO) Approves Amendment to
Standard for Examination of Distinctiveness of Trademarks
Taiwan Removed from US's 301 Watch List
Taiwan and China on USTR’S Watch List
Taiwan Applications Steady
TIPO’s Compulsory License of Patent Technology Rejected by High Court
Internet Service Provider (ISP) Liabilities Bill Under Review by the Taiwan Legislative Yuan
Amendment to Taiwan Customs Procedures Effect on September 1, 2008
Intellectual Property Case Adjudication Act and the Development of Intellectual Property Courts
Copyright Law Amendment
Status of Non-traditional Trademarks
Dissolution of Task Force for Raiding Pirates
Legal Issues about the Appearance Design of the 101 Building
Foreign Investment in Taiwan's Agricultural Technology Industry
Enforcement Rules of the Taiwan Trademark Law Amended
Taiwan Trademark Law Revised
Taiwan Copyright Law Revised
Taiwan Revised “Regulations on Promoting Industry”
Revised “Civil Procedure Code” Announced
Amendment to the Code of Criminal Procedure promulgatedm
Taiwan Finally Enters the WTO
Taiwan Releases Amendments to Copyright Law
Taiwan Patent Law Revised
Taiwan Legislative Yuan Approves Draft Optical Media Management Law
New Company Law to Take Effect in Taiwan
Merger and Acquisition Law
Amendments to the Trademark Law
Taiwan released Draft Amendment of the Trademark Law
Draft Amendment to Taiwan Patent Law
Early Disclosure of Invention Patents Effective October 26, 2002
New Enforcement Rules to the Patent Law
Taiwan released Draft Amendments to the Copyright Law
Domain Names in Taiwan
On March 25, 1999, the Administative Yuan passed the Amendment to the Statute for Upgraded Industry. According to the amendment, foreign investors in Taiwan shall benefit from tax deductions at different rates. For example, if an investor in the new industries (e.g. biotechnology industry, etc.) holds shares of such a company for more than three years, it shall enjoy a tax deduction by 10%.
New Developments in Contract Law
China's National People's Congress passed a new Contract Law on March 15, 1999. It will take effect on October 1, 1999. The Economic Contract Law, Foreign Economic Contract Law and Technology Contract Law will be abolished at that time, and will be replaced by the new Contract Law.
One of the major differences from the current contract law is that the new Contract Law provides protection (particularly protection of know-how) and technology transfer have been added to the new contract law. Contracts related to intellectual property shall also be governed by related specific rules under intellectual property laws and regulations.
New Regulations on Pharmaceuticals
China's State Drug Administration issued five regulations on April 28, 1999 to upgrade pharmaceutical administration in China to international practices. The five regulations include Regulations on the Administration of Imported Pharmaceuticals, Regulations on the Approval of Imitated Pharmaceuticals, Regulations on the Approval of New Pharmaceuticals, Regulations on the Protection of New Pharmaceuticals and Technology Transfer, and Regulations on the Approval of New Bio-Products. Foreign pharmaceutical companies will need to comply with the new regulations in the course of sales, research & development, or investment in pharmaceutical areas.
R.O.C. Amends Its Software Export Monitoring System
September 23, 1996
On August 6, 1996, the Ministry of Economic Affairs announced its new revisions to the Computer Software Export Monitoring System (CSEMS). The Export Monitoring System was first implemented in 1993, as a result of demands made by the United States Trade Representative (USTR) during 301 negotiations with the Republic of China.
The task of implementing the System was delegated to the Institute for Information Industry (Triple I). The purpose of this program is to seize infringing export software before it leaves Taiwan. However, this plan has not been very successful in practice. From July of 1993 to March of 1996, 61,907 computer products were inspected. However, of that number, only 41 cases of suspected infringing products were discovered. None of the suspects were actually charged with a substantive copyright violation.
The ineffectiveness of this program appears to be due to the simplicity of evasion. The export inspection is triggered by registering for a Triple I export license. At least 30% of all licensed goods are inspected by Triple I. If any infringing goods are found, Triple I contacts the copyright owner and temporarily seizes the goods. Infringers bypass the system by simply failing to register. If software is not registered it is not inspected, and given the volume of goods which pass through Taiwan's international airport, unlikely to be noticed.
CSEMS adds a heavy burden to legitimate exporters of computer software. Although it costs nothing for an export permit, each shipment of software needs one. The permit must be applied for in person, and the application takes approximately 2 hours to complete. It then takes another 2 to 3 days to inspect the goods. Each year, when the US and Taiwan enter into a new round of Intellectual Property negotiations, the software industry puts pressure on the Bureau of Foreign Trade (BOFT) to abandon the system.
This year the US agreed to accept a slight revision to the system. Now, only computer, printer, and video game software are required to have permits. This will speed the export process a little bit. However, as long as the program exists, it will continue to be opposed by Taiwan's legitimate exporters and ignored by Taiwan's infringers.
Protection of Well-Known Marks in the PRC
September 18, 1996
As you may be aware, China promised that it would provide broad protection for famous marks in the 1995 Sino-US IP Agreement. The long awaited regulations on well-known mark verification were finally promulgated. The following are the main points of the Regulations on Determination and Administration of Well- Known Marks ("Regulations"):
The Regulations provide a set of criteria that direct the trademark authorities in determining well-known marks. The trademark authorities may verify a well-known mark based on serial factors:
- nationwide sales volume of the trademarked goods;
- the extent of use of the mark on the goods within a three-year period;
- the duration and extent of advertising and publicity for the mark;
- the global extent of registered and protection for the mark; and
- the extent of worldwide use of the mark.
Under the Regulations, The China Trademark Office is designated as the agency to verify famous marks. Once a registered mark is authenticated as well- known, the owner of the mark is entitled to block any applications for registration of other marks or request cancellation of any registered marks which would create confusion with the well-known mark. The prohibition on using famous marks extends broadly even to dissimilar goods. However, the Regulations set forth a statutory limitation, requiring the owner to file a petition for cancellation within two years from the date of constructive knowledge of such registration.
The Regulations still do not satisfy the 1995 Sino-US IP Agreement, which requires China to protect unregistered famous marks, nor have they met the requirements set forth in the Paris Convention with respect to the famous mark protection. Furthermore, the statutory limitation in the Regulations is not in compliance with that in the 1995 Sino-US IP Agreement. In accordance with the Agreement, an internationally recognized owner of a well-known mark enjoys at least five-year's time to act against a similar mark. As a signatory to the Paris Convention and the bilateral agreement, China is obliged to protect famous marks, including unregistered famous marks. Accordingly, the Trademark Law is still subject to revision.
New Domestic Sales Regulations in Guangdong Province
August 15, 1996
The Guangdong Province of the People's Republic of China recently announced new regulations regarding the percentage of domestic sales foreign-owned companies and Sino-foreign joint ventures can make.
Until now, foreign companies have been competing with their PRC based subsidiaries in world markets, as PRC subsidiaries have been prevented from conducting substantial sales in China. Before the implementation of the new regulations, foreign based companies were permitted to sell only 10 percent domestically; joint ventures between foreign companies and China were allowed to sell just 30 percent of their products in Guangdong. The new regulations allow for increases in the domestic sales ratio up to 100 percent, depending on the products involved.
Joint ventures that have invested in excess of US$15 million and that are comprised of at least a 50 percent foreign partnership, may now sell all of their products in the Guangdong market. Investments of US$5 million to US$15 million may sell between 50 and 60 percent of their production in the local market.
US-China Trade War over Chinese Pirating Business
June 21, 1996
The United States and China signed an agreement averting a trade war over Chinese pirating of software, music and movies, and US imports of silk and other Chinese-made luxury products. The US lifted sanctions after finding that China has taken significant concrete steps to enforce its 1995 Action Plan, particularly by closing CD factories and some 5000 mini- theaters, seizures of pirate CDs by Chinese customs, and renewed agreements to allow US music and film makers to enter cooperative projects and distribute in China.
By agreeing to lift sanctions, the US also avoided Chinese retaliation on US agricultural products, such as cotton and vegetable oils, auto and auto parts, telecommunications equipment, and audiovisual products. Although it did not put a dollar value on the list, officials in Beijing predicted that the value of Chinese sanctions would exceed U.S. sanctions. In addition, China threatened that it would halt shipments of U.S. aircraft to China as part of its counter measures.
The new agreement cannot be viewed as resolving the issue of Chinese piracy, but as one more step in a long march.
New MOU Grants Priority to US Trademark and Patent Holders
May 13, 1996
The United States (US) and the Republic of China (Taiwan) signed a new Memorandum of Understanding (MOU) on April 10, 1996 in Washington, D.C. The MOU gives United States trademark and patent holders added protection under Taiwan law.
Taiwan's Trademark and Patent laws grants priority filing rights to nationals of countries which have a reciprocal agreement with Taiwan. Effective from April 10, 1996, if trademark or patent holders apply for patents or trademarks in Taiwan within a certain period of time, their rights will be protected effective from the date of their US registration. The priority right will block others who apply for the same patent or trademark after the US filing date.
Additionally, Taiwan's Patent Law, through the MOU, allows US nationals the opportunity to register patents for new microorganism species, which is prohibited for nationals of jurisdictions without such a bilateral agreement.
The provisions of the MOU offer US nationals a substantial amount of protection previously unavailable. However, to take advantage of this protection US trademark and patent holders must think globally from the time the right is first registered in the US. If the rights holder waits too long, they will loose this opportunity.
If you would like to take advantage of these new rights or have questions regarding any intellectual property matter in the Republic of China, please contact us.
R.O.C. Moves to Enlarge Trademark Protection
April 8, 1996
In an effort to promote Taiwan's effort to join the World Trade Organization (WTO), a group of government bodies led by the Ministry of Economic Affairs (MOEA) took the initiative to ease at least one of the restrictions imposed by the trademark law. In late January 1996 this group agreed to present a joint proposal to the Executive Yuan (EY) to expand the definition of "interested parties" under Taiwan's Trademark Law to include a foreign company's local agents, importers, and affiliates.
Under the current law, the term "interested party" refers to those persons who currently have a legal right which may be harmed by another's trademark registration. This is defined so that only a trademark owner, not its local agents, importers or affiliates, have a "legal right" under the current law. Expanding the definition of interested parties to include these groups will give them a method by which they can protect their contract-based interest in a trademark. This change will not become effective until it is approved by the Executive Yuan.
China Anti-Dumping Law
April 3, 1996
China is taking an aggressive step against developed countries to protect the interests of its own manufacturing industry. China will revise its draft anti-dumping law as early as late March of 1996. China has been targeted in more than 200 anti-dumping cases for its exportation of low- priced products to developed countries. China accuses those nations of implementing trade protectionism in the name of fair competition. A China trade official denounced the use of production figures from third countries to estimate production costs in China. He stated that figures ignore China's low cost labor, and thus inflate the true cost of production, creating the false impression that China is engaged in dumping.
In order to retaliate, the Chinese government recently announced that it would revise its anti-dumping law to protect the interests of Chinese manufacturers. The amended draft is expected to be submitted to the State Council for its review by the end of March, 1996.
China Trademark and Patent Application Statistics - 1995
March 28, 1996
Trademark applications and registrations in China have been escalating in the past few years. According to the Trademark Office, 538,725 trademarks were registered by the end of 1995, ranking China among the top ten countries for volume of trademark registrations. The Trademark Office further disclosed that 86,780 out of the 538,725 trademarks were foreign trademarks. In 1995, the Trademark Office received 166,098 applications for trademark registration, of which the domestic applications numbered 144,558 while foreign applications reached 21,540. Meanwhile, the Trademark Office approved 70,217 registrations in that year, among which 16,564 were foreign trademarks. It appears that the application to registration ratio is 49% for domestic marks, and 77% for foreign marks.
Foreign patent applications in China have significantly increased ever since China became the member of the Patent Cooperation Treaty. The China Patent Office recently reported that 83,045 applications were filed last year, of which 68,880 were home applications and 14,165 were foreign applications. The statistics from the China Patent Office revealed the number of specific applications as follows: (1) New Invention: 21,636, (2) Utility Model: 43,741, and (3) Design Patent: 17,668.
China Intellectual Property Enforcement
March 20, 1996
As you may be aware, the US is evaluating China's performance in enforcing intellectual property rights. As you must have read, this is a delicate time for US-Sino relations. China imposed martial law on March 1, 1996, and is conducting war games in the Taiwan Straits, and has imposed controls on foreign news agencies operating in China. China has responded to US complaints of unfair trade practices with its own report on the successes of its IPR efforts. In addition, the government has released enforcement statistics to demonstrate the scope and breadth of its efforts.
I. Enforcement Statistics
1. Court cases
The Supreme People's Court reported that approximately 1,600 intellectual property cases were handled in 1995, out of a total of 4,500,000 court cases. Over 6,500 cases involved a foreign party. Of the 1,600, 59% involved patent rights, 23% copyright, and 18% trademark rights. The low number of copyright and trademark cases is remarkable given the size of China's court system and total number of cases handled. Foreign companies are still extremely wary of entering a Chinese court.
2. Administrative Cases
The State Council's Working Conference on Intellectual Property Rights recently announced that Chinese administrative authorities seized 20 millions pirated CDS, 800,000 cassettes, 480,000 and 40,000 software programs in 1995. In addition, the administrative authorities handled 9,000 trademark infringement cases in the past year. Most foreign rights holders still prefer to deal with administrative authorities to protect their rights.
II. China's Response to US Complaints: The Report on Protecting Intellectual Property Rights
The Chinese government states in the report that China has kept its promise to authorize the State Council's Working Conference on Intellectual Property Rights ("WCIPR") to ensure fairness and uniformity in the enforcement of intellectual property rights. Since February of 1995, China has taken the following major steps:
- The WCIPR set up coordination offices in the 30 provinces to carry out the action plan;
- Both central and local joint inspection groups were established to undertake nationwide inspections;
- The joint inspection groups conducted investigations and inspections of the thirty-four CD plants by the end of July 1, 1995. As a result, the three CD plants were closed due to their failure to meet the registration requirements and IPR violations. However, the other thirty-one plants, were allowed to renew their licenses. They have been put under "tight supervision," with outside monitors visiting each plant;
- In August and November of 1995, the Press and Publication Administration issued circulars on using unique identifiers (SID Codes) on audio-video and electronic publication products;
- In January of 1996, the Ministry of Culture and the Ministry of Radio, Film and Television promulgated a circular prohibiting national performance of VCDs and Laser discs;
- The State Council promulgated the Regulations on Customs Protection of Intellectual Property Rights that became effective on October 1, 1995. From October 1 to December 31, 1995, Chinese Customs recorded 98 intellectual property works with the Customs database. In addition, Customs handled 1,084 cases nationwide, including infringement of copyright (1028 cases), trademark (46 cases) and patent (10 cases) between September 1994 and December 1995;
- In August, 1995, the Press and Publication Administration required all CD plants to use SID source identification codes on CDS. The requirement for title verification has also been imposed by the State Copyright Administration ("SCA"). All publication contracts with foreign publishers are required to record with the SCA before April 1, 1996; and
- The State Council set up about 80 patent administrative offices in provinces, major cities and special economic zones to mediate patent disputes.
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