CHINA INTELLECTUAL PROPERTY LAW NEWSLETTER
Vol. 3 , No. 6 - April 26, 2002
VISIT LLX AT INTA INTA 124th Annual Meeting 2002
May 18-22 - Washington, D.C. Lehman, Lee & Xu welcomes you to participate in the following: 2nd ANNUAL CHINA BRAND OWNERS BRUNCH - May 19, 11:00am at the Hyatt Regency Capitol Hill, Columbia Ballroom. Start the 124th Annual Meeting by experiencing Chinese hospitality at its finest. Hosted by Lehman, Lee & Xu and Tsingtao Beer, we hope that this year's brunch will once again provide for a relaxing forum to learn more about China brand owners and discuss changes in China's IP sector, including China's new Trademark Law. If you would like to attend, please send email to inta@chinalaw.cc or faxes to +8610 8532-1999. LEHMAN, LEE & XU/TSINGTAO BEER BOOTH - Exhibit Area, Booths 414 & 416. Visit with representatives of Lehman, Lee & Xu, Tsingtao Beer and other Chinese brand owners. On display will be general literature on China trademark law, Q&As on China trademark registration, IP enforcement strategies and more. Sorry, there will be no alcoholic beverages served at the booth. Hyatt Regency Washington on Capitol Hill 400 New Jersey Avenue, NW
Washington, DC 20001 USA To see a Map of Capitol Hill and the Hyatt Regency Washington, Please click here. | |
TOPICS THIS ISSUE:
- DVD Patent Royalty Controversy To Be Settled Out Of Court
- Outdated Laws In A New China
- China Government Considering Appropriating AIDS Drug Patents
- US Commerce Secretary Calls For Tougher IP Protection
- China's Economy And IP Situation Puzzling Industry Analysts
DVD Patent Royalty Controversy To Be Settled Out Of Court
The US and Japanese companies which own the patents that Chinese DVD manufacturing firms are using without paying royalty fees have decided to seek out-of-court settlements.
Industry sources reported that the six companies believe that avoiding a court battle with the 100 Chinese firms is preferable due to the huge potential for business that China holds for the future.
The six firms, including AOL Time-Warner Inc., Victor Company of Japan Ltd., Matsushita Electric Industrial Co., Hitachi Ltd., Toshiba Corp., and the Mitsubishi Electric Corp., are next planning to hold talks with China's electronic audiovisual industry association.
It is believed that the decision to settle out of court was influenced by Sony Corp.'s decision to drop a lawsuit against the US-based Apex Digital Inc, which sells China-manufactured DVD players. Two weeks after Sony filed a lawsuit in New York claiming that Apex violated Sony's DVD patents, Apex agreed to pay royalties.
At the outset, the six firms announced they would take legal action, such as filing a lawsuit and placing import curbs on the Chinese manufacturers' products if they did not agree to pay patent royalty fees by March 31.
(Source: Japan Economic Newswire)
Outdated Laws In A New China
Businessmen in Shanghai, often touted as China's most modern city, are feeling the effects of out-of-date laws.
The almost obsolete anti-competition laws, small in scope, allow imitators in some sectors to copy every characteristic of a successful business with no fear or reprisal.
Bifengtang, a Hong Kong based restaurant that began its Shanghai operations four years ago, quickly became popular with its dim sum food and rapidly expanded to open six restaurants.
However, it is not only Bifengtang's business that is prospering due to their culinary expertise. Ye Ximing, the chain's manager, speaking of two other imitation restaurants, said, "we want them to stop their illegal operations right now and make a public apology."
Ye said the chain is ready to file a lawsuit against the two imitators in order to force them to change their name, pay RMB 500,000 in compensation and make a public apology.
However, even though it is clear that the two restaurants are copying Bifengtang's name, style of dress and even menu, the case may not be successful. The reason is due to the lack of a reference to the service industry in China's Anti-unfair Competition Law promulgated in 1993.
In China, where cases are not based on a precedent-based system, it is difficult to take legal action against any undefined suspicious activity without changing the law.
Although new problems rise constantly, says Lu Guoqiang, vice president of the Shanghai No. 2 Intermediate Peoples Court, the Anti-unfair Competition Law has never been amended. According to local experts, the unchanging competition laws are "incomplete, too general and vague" compared to the all recently-amended intellectual property laws.
(Source: Chinabiz.org)
China Government Considering Appropriating AIDS Drug Patents
Shen Jie, director of the National Center for AIDS Prevention and Control, said the China government is holding discussions with Merck Sharp and Dohme, the China unit of Merck & Co Inc, Bristol-Myers Squibb Co and GlaxoSmithKline on whether China should have the patent for the AIDS drugs which would enable it to save costs by making the drugs in the country.
Currently, the cost of treatment for an AIDS patient in China for one year is RMB 20,000 - 30,000, far beyond the means of the majority of Chinese people.
Commenting on a recent statement by the United Nations, which believes as many as 1.5 million people in China could be infected, Shen said, "If we don't step up controls, by the year 2010, the AIDS patients very possibly can exceed 10 million people."
(Source: AFX European Focus)
Need to File a Patent or Trademark in China? Contact LLX at mail@chinalaw.cc and click below to download a Power of Attorney: | | |
US Commerce Secretary Calls For Tougher IP Protection
US Commerce Secretary Don Evans, in a recent meeting with Wu Yi, former China Minister of Trade, called for China to take tougher action concerning trademark, copyright and patent protection.
"They're concerned about it and we're concerned about it. They have the laws on the books to deal with it. We're encouraging stronger enforcement. We're encouraging tougher penalties," Evans said at a news conference.
Although he realizes that China recognizes that combating piracy is a fundamental part of membership in the World Trade Organization, he added, "it's obviously still a problem, a big problem. We know that and they know it and we'll stay focused on it."
Industry estimates place the annual losses of Western businesses as high as US$ 16 billion due to counterfeiting in China.
Evans, besides promising to offer technical help to ensure China abides by its reform commitments, said that he would dispatch a senior official once a month to China to monitor progress.
Evans and 15 US business executives are looking for new opportunities in China after the country's entry into the WTO. They met Tuesday with Chinese President Jiang Zemin and Trade Minister Shi Guangsheng.
(Source: AP Worldstream)
China's Economy And IP Situation Puzzling Industry Analysts
Some economic analysts believe that China could be producing an economic model never seen before in history.
Even though traditional economic models require that intellectual property be protected in order for a high level of development, China's economy is continuing to develop at an outstanding rate despite a low level of IP protection.
Daniel C.K. Chow, an Ohio State University law professor and former secretary of the China Anti-Counterfeiting Coalition, said, "It's possible that we're seeing the emergence of a new type of economy. There's always been this axiom that you can't reach high levels of development without strong protections for intellectual property. China may defy history. We've never seen anything like this - an economy this size with this level of counterfeiting that's growing like it's growing."
It could be because it was only until recently that Chinese citizens were able to deviate from wearing the drab state-made clothing, and instead choose from an assortment of famous fashion brands. Fighting the fakery spawned by this thirst for brand names is tough. "It's more intense in China because of the absence for so long of competitive brand names," he added.
"The obsession is really with the brand name and the prestige more than it is with the product," Chow says. "And with counterfeits, you get the same brand name."
However, some of the "brand names" are not exactly the same as the internationally renowned manufacturers. It is not uncommon for clothing to proudly sport the incorrectly spelled name of the brand names people all over the world have come to recognize as a sign of quality and excellence. A stroll through a market, whether it be behind Tiananmen square in Beijing or in a small town in a less affluent province, will provide the opportunity to peruse through "Nikey" bags and shoes placed beneath racks of "EcDlncnd" shirts with the face of Ronald McDonald.
Movies could be the worst victims of the rampant infringement. With hawkers at strategic points within cities, and the low price of US$ 1 for a DVD, the opportunities for making a quick sale and grammatical mistakes are countless. For only a few dollars, anybody can take home "Siderman," "Jay and Silwnt Bob Strik Back, " and "Lord Fort he Ring."
The government constantly announces it is taking action and the struggle is ongoing. High profile events are planned where compact discs and DVDs are crushed beneath heavy machinery or shattered by woodchippers.
Nevertheless, as U.S. Assistant Trade Representative Joseph Papovich, where the problem almost resulted in trade sanctions against China in the 1990s, says, "it's not getting much better."
Penalties are insufficient to discourage repeat offenders and local protectionism may deter enforcement of the laws. Where entire towns and hundreds of families survive on one manufacturing plant, local police and officials are not eager to help anyone close that plant.
However, the government still contends that fakery needs to be fought. Long Yongtu, China's vice minister of foreign trade and chief WTO negotiator, says stamping out counterfeit goods is critical to China's economy. "We need to establish an orderly market environment, so we must adopt international practices," he says. "But that's not enough. We need the surveillance of the general public. We need people watching."
For the Chinese government, it is a typical no-win situation, or mao-duan (spear-shield), as people say in China. At least we can feel for Premier Zhu Rongji, when speaking of the intellectual property dilemma, he says, "Every time such instances come to my attention, I am filled with a strong sense of indignation and I cannot sleep well."
(Source: The Associated Press, AP Worldstream)
Lehman Lee & Xu
China Lawyers, Notaries, Patent, Copyright and Trademark Agents
http://www.chinalaw.cc/
Beijing Office | 6th floor, Dongwai Diplomatic Office Building
23 Dongzhimenwai Dajie
Beijing 100600 China
Tel.: (86)(10) 8532-1919
Fax: (86)(10) 8532-1999
Email: mail@chinalaw.cc | | Shanghai Office | Suite 5107, Plaza 66
No. 1266, West Nanjing Road
Shanghai 200040 China
Tel: (86)(21) 6375-8240
Fax: (86)(21) 6375-8705
Email: shanghai@chinalaw.cc | |
To unsubscribe from this newsletter send an email to
unsub-ip@lehmanlaw.com Please include the email address to which the newsletter is being sent (not a forwarded address) in the body of the email.
The China Intellectual Property Law Newsletter is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu will not be held responsible for any such reliance on its contents.
