Third Amendment to China's Patent Law Approved

Four New IP Courts to be Established in Shanghai

China - Foreign Investment

China Increases the Number of Industries Open to Foreign Investment

Taiwan - IP

Taiwan Removed from US's 301 Watch List

Taiwan Intellectual Property Office (TIPO) Approves Amendment to Standard for

Examination of Distinctiveness of Trademarks

TAIWAN

Taiwan Removed from US's 301 Watch List

On January 16, 2009, the United States Trade Representative announced that it was removing Taiwan from its list of nations which present barriers to trade for US companies due to significant counterfeiting. Taiwan's Intellectual Property Office credited Taiwan's recent efforts to establish special Intellectual Property Courts as a major development that helped it attain recognition for significant achievement in IP protection.

Taiwan Intellectual Property Office (TIPO) Approves Amendment to

Standard for Examination of Distinctiveness of Trademarks

On January 1, 2009, the Taiwan Intellectual Property Office (TIPO) announced that they had approved an amendment to the Standard for Examination of Trademark Distinctiveness. Important revisions include:

1. Clarifying the potential distinctiveness of fictional characters, names of historic

people, and domain names as trademarks:

a. Fictional Characters: A fictional character is distinctive if the author 1) commercializes it, and the name of the character 2) has originality, 3) creates an impression on the consumer, and 4) is capable of indicating the source of the character. Thus characters like Harry Potter and Snoopy, although also components of copyrighted works, should not be rejected on that ground.

b. Names of Historic People: The names of renowned historical figures will not be allowed to be registered as trademarks, as they do not have distinctiveness and should be kept in the public for public use. However, some deceased celebrities, like Elvis and Marilyn Monroe, have already been registered and used as trademarks in Taiwan.

c. Domain Names: A domain name alone, absent a design, cannot be registered as a trademark. It is deemed non-distinctive, regardless of its capability to designate a source of origin. However, a domain name containing a design may be registered as a trademark if the applicant intends to use it as a trademark and if the average consumer could understand that the domain name is used as a source of origin, and not just as a domain name. However, the applicant must disclaim the non-distinctive parts of the domain name before obtaining registration for a domain name containing a design.

2. Stating that a trademark can be distinctive in one of two ways:

a. Inherent Distinctiveness: A trademark is distinctive at creation and does not

require use in the course of trade to obtain distinctiveness.

b. Acquired Distinctiveness: A non-distinctive trademark could be deemed to

obtain trademark distinctiveness if it is widely used by the applicant and the

trademark is capable of identifying the applicant's good or services offered in

the course of trade.

CHINA

Third Amendment to China's Patent Law Approved

China's Patent Law, revised two times since first promulgated in 1984, has been revised again. The revisions are intended to address a range of foreign criticism, and to further promote innovation. The revised Patent law will take effect on October 1, 2009. Important technical revisions include:

1. Patent applications will face an Absolute Novelty disclosure requirement. In the old Patent law, either publication worldwide, or public use or disclosure inside China would defeat a claim of novelty. Under the new law, novelty will be more strictly defined, as technology not known to the public in China or abroad prior to the filing date.

2. Establishing statutory damages for patent infringement. The range is from RMB10,000 (approximately US$1,500) to RMB1,000,000 (approximately US$150,000). Statutory damages were not provided for in the previous Patent Law. However, most foreign companies will feel that statutory damage awards are too low, in relation to the average infringer's profits. In cases of pharmaceutical counterfeiting, US$150,000 can be so lowcompared to potential profits that it is unlikely to serve a deterrent function.

3. Allowing import of medical apparatus or pharmaceuticals prior to expiration of a pharmaceutical patent, if necessary to obtain regulatory approval in preparation for marketing soon-to-be generic drugs or devices.

4. Increasing the circumstances under which compulsory licenses will be granted;

5. Increasing standards for novelty of design patents.

6. Prohibiting use of design patents to protect two-dimensional patterns essentially used for identification, such as labels, packaging or product design.

7. Chinese patent applicants will no longer lose rights if they apply for patents in other countries prior to applying in China, as long as the technology or invention is first granted security clearance by the Patent Administration Department of the State Council. Uponobtaining approval, the inventor may submit the invention to a foreign patent office prior to filing in China.

8. Granting more power to patent authorities to inquire after parties, check or replicate contracts, invoices, records, conduct-on-the spot investigations, and seize counterfeit products when handling patent issues.

9. Limiting a court to 48, and potentially 96 hours, to issue a preliminary injunction or preliminary seizure for evidence preservation. Under the new Patent Law, when a patentee or an interested party requests such actions before litigation, the court should make a decision within 48 hours. Under special circumstance, it may be extended to another 48 hours.

10. Specifying that the prohibition on patenting life forms, other than micro-organisms,

applies to genetic resources within the ban.

Four New IP Courts to be Established in Shanghai

Shanghai's High People's Court announced in late February that the Shanghai court system is working to establish a multi-district trial system for IP courts. The Supreme People's Court authorized four district people's courts to establish IP trial divisions. The four districts are the Pudong District, the Huangpu District, the Yangpu District, and the Luwan District.

China Increases the Number of Industries Open to Foreign Investment from 267 to

400+

On December 25, 2008, Chinese government officials issued a list of industries located in 21 provinces in west and northeast China where foreign investment would be encouraged. The list expands the number of "encouraged" industries from 267 in 2004 to more than 400 as of January 1, 2009.

Foreign investors who operate projects within the specified "encouraged" industries in west and northwest China will be granted preferential treatment over foreign-invested projects in other regions, including import and export tax exemptions, lower company income taxes, and eligibility for larger bank loans.

The new list of industries encourages foreign investment in mining, seedling development, agricultural production, and the cultivation of oil plants, vegetables and fruits. The Chinese government hopes that the encouragement will help foster investment in these regions of China.

China Increases the Number of Industries Open to Foreign Investment from 267 to 400+

On December 25, 2008, Chinese government officials issued a list of industries located in 21 provinces in west and northeast China where foreign investment would be encouraged. The list expands the number of "encouraged" industries from 267 in 2004 to more than 400 as of January 1, 2009.

Foreign investors who operate projects within the specified "encouraged" industries in west and northwest China will be granted preferential treatment over foreign-invested projects in other regions, including import and export tax exemptions, lower company income taxes, and eligibility for larger bank loans.

The new list of industries encourages foreign investment in mining, seedling development, agricultural production, and the cultivation of oil plants, vegetables and fruits. The Chinese government hopes that the encouragement will help foster investment in these regions of China.

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