According to the General Administration of Customs of P.R. China (GAC), commencing September 1, the Customs nationwide will carry out a special IP protection action named “DRAGON” in favor of export businesses with IP advantages, in order to provide a fair and orderly environment for Chinese businesses to go abroad.

It is reported that during the three-month action, the Customs nationwide will carry out IP enforcement surrounding exports to Africa, Middle East, Latin America and the countries/regions along "one belt one road" routes, with focuses on small appliances, mobile electronic products, engineering machinery, daily necessities, holiday products, specialty products and other products with traditional advantages.

The Customs will designate contact person for the key businesses listed in this action, for assisting the businesses in coordinating with the port customs and the relevant IP enforcement organs. The GAC will make full use of the mutual aid channels with foreign customs, and provide support to the key businesses in terms of intelligence backup, evidence collection and case verification.

According to the preliminary data of 2017 as of June 30, Chinese customs have seized 6,721 batches of infringing goods in imports and exports, involving 24.72 million pieces of goods and 80.98 million yuan’s value. 3,742 IP customs recordal applications were newly approved, involving 1,426 right owners. (Source: China Economic Net)

During the 7th China International Nanoscience and Technology Conference held in Beijing on August 29th, Springer Nature Group, the National Center for Nanoscience of P.R. China, and the Chinese Academy of Sciences Documentary Center jointly released "China Nanoscience and Technology Development Overview" white paper, which pointed out that China has become an important contributor to the world’s nanoscience and technological progress, leading in some foundation researches, and topping the number of nano patent applications.

In the past two decades, the total number of nano patent applications in China has reached 209,344, accounting for 45% of the world's total, more than twice the total amount of US applications for the same period, and its growth rate is much higher than the world average. According to statistics, China has a large number of patent applications in many popular fields of nano-technology application, most of which are polymer synthesis and supramolecular compounds patents, including coatings, printing ink, colourants, adhesives, fiber materials and textile processing technology etc. (Source: Beijing Daily)

Background

As a large security products and service provider, Nuctech Company Limited (hereinafter referred to as Nuctech) provides products and services to more than 150 countries and regions. Since 2003, Nuctech has been cooperating with several companies in Malaysia, among which, Pan Asiatic Technologies Sdn Bhd (hereinafter referred to as PAT) became their exclusive agent in Malaysia.

Starting to work for Nuctech since 1998, Xiaoming Sun was once in the position of General Manager of International Business, responsible for sales in Malaysia and participating in liaison and negotiation with Malaysian Customs. In April 2011, Sun resigned from Nuctech, and established Powerscan Co. Ltd. (hereinafter referred to as Powerscan) in May of the same year as the legal representative. The business scope of Powerscan is manufactory and sales of security products as well.

Back in 2010, 4 sets of Nuctech fast inspection devices recommended through PAT to Malaysian Customs and Ministry of Finance’s CIQ project were approved by the Malaysian government. But in 2011, Nuctech lost the opportunity as a CIQ project supplier, while on September 19, 2011, Powerscan, the new company created by ex-employee Sun, signed a contract with PAT for 2 sets of fast inspection devices to be supplied to Malaysian Customs. In 2013, Powerscan and PAT supplied another 4 sets of fast inspection devices to Malaysian government. Nuctech believed that Powerscan has taken advantage of Nuctech’s marketing information in acquiring the sales contract with PAT, and hence initiated a lawsuit against Powerscan for trade secret infringement and unfair competition.

In 2014, Beijing First Intermediate People’s Court issued first-instance judgement, which ordered Powerscan and Xiaoming Sun to jointly pay 4.4 million RMB Yuan to Nuctech as compensation for economic loss, plus 600,000 Yuan for reasonable litigation costs, with other claims of Nuctech rejected. In disagreement, both parties appealed to Beijing Higher People’s Court. Accepted on May 2, 2017, the case was heard by the collegial panel of Beijing Higher People’s Court in the private session as requested by the parties concerned due to the trade secret involved. Beijing Higher People’s Court of the second instance dismissed the appeal request and sustained the original ruling.

Typical Significance

Factors to be considered in determining whether an agent is a special customer with a long-term stable trade relationship

In this case, PAT involved in the CIQ project was the agent of Nuctech in Malaysia. although Nuctech doesn’t sell fast inspection devices through PAT every year, in view of that the devices are not fast consuming products and the potential demand of Malaysian Customs, combined with Nuctech’s sales performance during 2003 and 2009, it shall be determined that PAT is a customer that has sustained a long-time stable trade relationship with Nuctech. When Sun was with Nuctech, he had not only acquired the knowledge PAT’s trading preference but also the actual sales prices and configuration of the products sold to Malaysian Customs as well as the actual demand of the end user, which can hardly be known to other people in the field. The above-mentioned was determined, by the court of the first instance, as constitution of trade secret that enabled Sun and his Powerscan company to acquire de facto and potential competitive advantages when competing for the Malaysian sales opportunity against Nuctech.

With Sun being the legal representative of Powerscan, the company should have known that Sun’s behavior is of infringement nature while they used the information acquired by Sun. Therefore, Powerscan shall also be held liable for infringing the trade secret of Nuctech.

Shandong New Hope Liuhe Group Co., Ltd (hereinafter referred to as “New Hope”) filed an application for registration of trademark in Class 29 in respect of meat products, etc., which was rejected by Trademark Office in accordance with Article 10 Paragraph 1 (7) of the Trademark Law, on the ground that the characters “优质” (meaning “excellent quality”) therein is apt to mislead consumers with regard to the quality and characteristics of the designated goods.

New Hope, represented by Unitalen, applied for review of the refusal decision. According to Trademark Review and Adjudication Board (TRAB), the trademark, as a whole, is capable of identifying the source of products, is not apt to mislead consumers and is not deceptive, so there is no constitution of any circumstances stipulated in Article 10 Paragraph 1 (7) of the Trademark Law. The trademark is therefore granted with preliminary approval.

Typical Significance

In determining whether a trademark is deceptive, it shall be based on the common knowledge of the relevant public, focusing on the major distinctive part of the trademark, combined with the actual effect presented by the trademark, so as to evaluate whether the trademark as a whole is able to identify the source of products. It shall not fall within the circumstances stipulated in Article 10 Paragraph 1 (7) of the Trademark Law, if it is not sufficient to cause misconception based on the daily life experience or the common knowledge of the relevant public.

In this case, although the trademark contains the wording of “优质”(excellent quality), the trademark is composed the Chinese “优质滋生活”, English “PREMIUM ROSE’S KITCHEN” and design. Among these elements, “滋生活” is a made-up word and is displayed in a prominent manner.“优质” does not describe the quality of the products directly; instead, it is to embellish the word “滋生活”. “优质滋生活” as a whole delivers the message of a positive attitude toward excellent life, which is different from the scenarios such as “优质芝麻” (excellent sesame) and “优质杂粮” (excellent grains) that describe the product quality directly. Therefore, although the trademark comprises the word “优质”, consumers are unlikely to have excessive expectation of the quality of the products based on their daily experience.

The American company, ICON Health & Fitness Company (hereinafter referred to as “ICON”), is owner of China registered trademark No. 3889268 “IFIT” on “fitness equipment” in Class 28. For better user experience, ICON release a fitness application called "IFIT" on App Stores, for use with its branded fitness equipments and/or smart wearables.

Sichuan Micro-DSP Technology Co. Ltd (hereinafter referred to as “Micro-DSP”), based on its No. 4869639 trademark registration for “” in Class 9 in respect of “computer program (downloadable software)”, filed a complaint to Shanghai Pudong New District Intellectual Property Office, seeking affirmation of ICON’s "IFIT" mobile phone app as infringing on Micro-DSP’s exclusive right to use the registered trademark. Under the mediation arranged by Shanghai Pudong New District Copyright Dispute Mediation Committee, ICON and Sichuan Micro-SDP resolved the dispute and signed a memorandum for Micro-SDP to transfer its No. 4869639 “iFit!” trademark to ICON.

Typical Significance

The is a typical case wherein the People's Mediation Committee plays an important role in coordinating the settlement of IP disputes, and is a successful exploration of alternative ways of resolving IP disputes. The People's Mediation system provides an option other than litigation to resolve the conflict between two parties in a more peaceful manner at low cost with high efficiency.

During the occasion Japan-China Mechanical Expert Meeting held by SIPO, participants of Japan Patent Office visited Unitalen headquarters along with officials from the Japanese Embassy in China and the delegates from Japan External Trade Organization.

Knowing that Unitalen has close cooperation with of China Intellectual Property and, as one of the largest IP law firms, Unitalen leads in many areas including patent application volume, quality and patent processing automation, the delegates took the opportunity of the visit to gain a deeper understanding of how Chinese IP law firms operate patent electronic filing related matters, which will provide reference to the future Japan-China cooperation in mechanical industry.

AIPPI China committee hosted 2017 AIPPI China Youth Forum during August 18 and August 19 in Beijing. Unitalen partner, Dr. Wei Pan, was invited to deliver a speech on “the impact of Beijing higher court’s patent infringement determination guides on patent agency”.

Starting from the significance of the interpretation of patent claims, Dr. Pan’s introduced the different attitudes held by SIPO for patent examination and by courts during infringement litigations toward the protection scope of functional characteristics, further extended to the comparative study between US and China patent practices in handling functional characteristics, and concluded with his sharing of adaptive strategy.

Hosted by China Trademark Association and Administration for Industry & Commerce of Guangxi Zhuang Autonomous Region, 2017 China International Trademarks & Brands Festival was held in Guilin early September.

In the highly acclaimed Brands Festival Awards Ceremony, Unitalen was once again recognized as “Distinguished Trademark Agency” and honored with “2017 Trademark Brand Building Excellence Award”. The“奔跑吧兄弟” (“Run bros!”, a well-known TV program in China) trademark opposition case, represented by Unitalen, was selected as one of the “2016-2017 Excellent Trademark Cases”.

This year, Unitalen Salon featured discussions concerning conflict between works name (game name, TV program name) and trademark right. TRAB consultant-director, Current and former IP court judges, and Unitalen attorney led the discussion with over 200 attendants.

At the China-Japan Trademark Exchange Forum, a traditional event at Trademark Festival, Unitalen partner Wei Wei was invited to deliver a speech on the backgrounds of “Provisions of the Supreme People 's Court on Several Issues Concerning Trial of Administrative Litigations Involving the Granting and Affirmation of Trademark Rights”, the major clauses in the Provisions, and the issues that should be paid attention to in practice.

On September 5, 2017, the 8th China Patent Annual Conference was held at the Beijing National Convention Center, attracting more than 8,000 delegates from around the world. Judges from Beijing IP Court, IP officials from General Administration of Customs, and IP counsels of some Fortune 500 businesses led the discussions on “Overview of Major IP Cases accepted by Local IP Courts”, “How to Improve Efficiency in IP enforcement”, “Effective Utilization of Preliminary Injunction” and “Progress in IP Portfolio Management Reform”.

Unitalen Partner Baojun Wang, was invited to give a speech on “Study of Patent Infringement Based on the Tort Law”, introducing foreign practice and theoretical disputes, sharing thoughts about the possibility of tackling indirect patent infringement issue based on joint infringement, and analyzing elements of tort liability based on recent influential patent infringement cases.

On September 18, Unitalen US liaison office held a roundtable event surrounding the topic of “Updates on China Patent Judicial Protection” at our San Francisco office building. Representatives from local law firms and businesses have attended the meeting.

At the roundtable, Unitalen partner Mr. Yongbo Li gave an introduction on the development in China patent judicial protection by distilling and summarizing the IP Work Report recently issued by the Supreme People’s Court at the 29th Meeting of the Standing Committee of the 12th National People's Congress of the People's Republic of China, as well as the patent litigation big data issued by Beijing IP Court.