CHINA INTELLECTUAL PROPERTY LAW NEWSLETTER
Vol. 3 , No. 7 - June 10, 2002
TOPICS THIS ISSUE:
- Harry Potter Trademark Registered By East Hope Group
- Disney Files Suit Against China-made Stuffed Bears
- Powerful Producer With Little IP Rights
- Jesse Ventura Appearing In Beijing And Shanghai
- Despite No Manufacturing Site, TSMC Already Registering Patents
- Royalty Fee Set At US$ 4 In DVD Player Patent Controversy
- China Allows Research Bodies To Own State-Funded Patents
- PricewaterhouseCoopers Fails To Win Domain Name Pwc.Com
- Necessary To Reform WTO In Favor Of Developing Countries
Harry Potter Trademark Registered By East Hope Group
At the end of last year, the East Hope Group (a member of the Hope Group conglomerate) successfully registered Harry Potter as a trademark. The Shanghai-based East Hope Group has not yet sold any products using the "Harry Potter" trademark and is still uncertain how it will develop or market the trademark.
Hope Group spokeswoman, Ms. Zhang Lunda, said that since 1995, East Hope has been registering many famous trademarks and now has the right to many including "Hope," "East Hope," "Qiangda" (powerful), "Jindou" (gold bean) and "Shouhuo" (harvest).
East Hope is in the animal-feed business and sees its diverse trademark holding as a way of keep its future business options open, Ms. Zhang said.
(Source: ChinaOnline)
Disney Files Suit Against China-made Stuffed Bears
Disney has filed suit against a Swedish company for importing Winnie the Pooh look-alikes manufactured in China.
Disney claims that the red shirt, ears, eyes, nose and tongue of the stuffed bears which "have the same attitude and facial expression as Winnie the Pooh infringe on the copyright held by Disney.
Although Disney has not taken action against the Chinese manufacturer, it is asking for the destruction of 25 000 of the bears.
(Source: The Independent)
Powerful Producer With Little IP Rights
Although one of the world's largest drug producers, the China pharmaceutical industry still lacks independent IP rights.
In the year 2000, the country's output of chemical crude drugs totaled 240,000 tons, with a production capacity ranked second in the world only after the United States. However, so far China only holds the patents to two innovative drugs, arteannuin and sodium dimercaptosuccinate that are approved internationally. 97% of the chemical drugs produced are imitations.
(Source: Xinhua)
Jesse Ventura Appearing In Beijing And Shanghai
Jesse Ventura is leading a trade delegation to China. The former-wrestler and governor of Minnesota, a leading state in the establishing of educational and cultural ties with China, is following the process begun by the former Minnesota governor, Arne Carlson, who went to China in 1998.
It is hoped that Ventura's visit will help spur the legal and economic reform that China is presently undergoing. Although China expert Nicholas Lardy says the country's legal system has maybe improved to a 4 or a 5 on a 1-10 scale, this is a substantial improvement considering the post-Mao state of the country, which lacked any effective judiciary system or system of property rights. Now, commercial and contract law both are regarded as substantially developed, or higher than a 5.
Ventura will be leading more than 100 business people, state officials and journalists to Shanghai and Beijing. It is to present, one of the largest trade missions ever sent by a US state.
(Source: Saint Paul Pioneer Press)
Despite No Manufacturing Site, TSMC Already Registering Patents
Although Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) has not yet found a prospective building site, it has already begun the process of filing patent applications.
Although TSMC now holds some 3 000 patents worldwide, none of them are registered on the mainland. Deputy CEO FC Tseng said, "prevention of copying by others is more important than when to start building a water fab on the mainland."
TSMG has yet to open its first plant in China. They are is hoping to take full advantage of the $12 billion world's third-largest chip market, which currently restricts chip imports.
In response to a question asking if they are registering the patents to stop mainland rivals Semiconductor Manufacturing International Corp. and Grace Semiconductor Manufacturing Corp. from manufacturing similar chips, TSMC spokesman J.H. Tzeng simply said "we're registering the patents because we are going to do business there."
(Source: AFX European, Bloomberg News)
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Royalty Fee Set At US$ 4 In DVD Player Patent Controversy
Negotiations between China Acoustic Equipment Association (CAEA) and DVD 6C Licensing Agency (6C) on the issue of patent royalties was recently concluded with CAEA, which represents more than 50 Chinese DVD player manufacturers, agreeing to pay 6C for using patented DVD technology in their DVD players. The patent royalty fee for each China-made DVD player was fixed at a US$ 4 maximum, which is much lower than the US$ 20 previously demanded by 6C.
6C, comprised of Hitachi, Matsushita, Mitsubishi, Toshiba, JVC and AOL Time, Warner alleged that they were suffering damages due to intellectual property rights violations occurring in China. Under the agreement, DVD players sold in China before the end of this year will not be liable to the royalty payments, while the US$ 4 fee will be charged on each exported DVD player. Chinese DVD player manufacturers will need to sign respective patent royalty contracts with the 6 companies individually.
Mr. Tang Yuanxiang, director of the CAEA, believes the actual DVD patent royalty will be below US$ 4 maximum, and went on to say, "The agreement is favorable to domestic DVD player makers."
As 6C only represents a section of DVD core patent technology owners, CAEA is now preparing to negotiate with other DVD patent technology owners. Mr. Tang disclosed that Philips, Sony and Pioneer have demand a patent royalty of US$ 5 for each China-made DVD player, while Tomson and MPEG-LA are demanding US$ 2 and US$ 4 respectively.
With China producing approximately 30% of the world's supply of DVD players, some industry analysts predict introducing the patent royalty will force DVD player manufacturers to increase prices next year to cover the royalty. A person related to a Chinese DVD manufacturer revealed that China made DVD players sold for export only generate a profit of approximately US$ 5 per unit, which already factors in the newly introduced royalty costs.
(Source: China IT & Telecom Report)
China Allows Research Bodies To Own State-Funded Patents
China's Ministry of Science and Technology recently reported that it in an attempt to improve the country's patent management system, research bodies responsible for key state research programs could own the patents derived from those programs.
The State Council General Office recently approved a regulation on patent management of state scientific and technological research programs and ordered China's ministries and localities to comply with the regulation in order to help produce more patents through state-funded research work.
The ministry's spokesman, Mr. Shi Dinghuan said that the state would grant research bodies the ownership of any patent resulting from state-sponsored projects with the exception of those vital to the state, national security and public interests. The research bodies could also decide the future development and use of the patented technology and researchers could have priority in gaining patents transferred by research bodies, Mr. Shi added.
Nevertheless, the state has not relinquished all of its rights in relation to patents developed under the new system and has preserved its ability to freely use and develop any such patents.
Statistics indicate that since the 1990s, Chinese researchers in the course of their employment are responsible for filing approximately 30,000 patent applications annually. In 1998, the five core national research programs received 1,369 patents, including 462 inventions.
(Source: Asia Pulse)
PricewaterhouseCoopers Fails To Win Domain Name Pwc.Com
In a ruling issued last week by the World Intellectual Property Organization (WIPO), PricewaterhouseCoopers, a leading global management-consulting firm, failed to prove that the Hong Kong-based company Ultimate Search should be required to relinquish the domain name pwc.com.
PricewaterhouseCoopers alleged that Ultimate Search was acting in bad faith by using the pwc.com domain name, as it "is directly identical and confusingly similar to the PWC mark." PricewaterhouseCoopers said it has registered "PWC" as a trademark in a number of countries including Hong Kong, China and the countries of the European Union and that a trademark application was pending in the United States.
In response, Ultimate Search noted that other companies also used the letters "PWC" in U.S. trademark registrations and insisted it has a legitimate right to use pwc.com. PricewaterhouseCoopers (the "complainant") initiated the proceeding under the Uniform Dispute Resolution Policy (UDRP) of the WIPO. The UDRP permits complainants to file a case with a resolution service provider, specifying, mainly, the domain name in question, the respondent or holder of the domain name, the registrar with whom the domain name was registered and the grounds for the complaint. The panel then decides the case on the base of the criteria, which are cumulative, contained in the UDRP Policy, which also contains practical examples of how a party may prove its compliance with these criteria:
i) whether the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights;
ii) whether the respondent has any rights or legitimate interests in the domain name (for example, the legitimate offering of goods and services under the same name);
iii) whether the domain name was registered and is being used in bad faith. In order to be successful, the Complainant has the burden of proving, on the balance of probabilities, that all three elements are present.
The three-person WIPO panel ruled that PricewaterhouseCoopers had proved pwc.com was identical to its trademark, however, the WIPO panel said that PricewaterhouseCoopers did not prove that Ultimate Search had registered and used pwc.com in bad faith. The panel found that "¡the letters PWC, as the evidence shows clearly, could be attributable to the Public Work Center, Personal Water Craft, Pratt & Whitney Canada, and no doubt to many other identifiable people or matters. This inherent lack of distinctiveness is what undermines the Complainant's attempts to have the Panel regard the mere registration of PWC.com by the Respondent as self evident bad faith"
(Source: ZDNet )
Necessary To Reform WTO In Favor Of Developing Countries
Mr. Long Yongtu, vice minister of China's Ministry of Foreign Trade and Economic Cooperation and China's chief trade negotiator, urged the World Trade Organization (WTO) to increase its efficiency and to be fairer to developing countries in comments made in Beijing on May 23, 2002. The comments were made during a Forum on the WTO and China's Economy in the 21st Century, while in the presence of WTO deputy director-general, Mr. Miguel Rodriguez Mendoza.
Mr. Long said that many WTO rules are more favorable to developed countries because developed countries actually formulate the governing rules and that the new rules to be established in the WTO's next round of negotiations must also benefit developing countries to present a more balanced approach. As developing countries are unaware how WTO rules are made, they cannot possibly be on an equal footing with developed countries, Mr. Long noted.
While China has pledged to respect intellectual property rights, very little, if any, preferential treatment is granted to developing countries regarding protecting intellectual property rights, Mr. Long observed. This comes in light of the WTO conference held in Qatar last November that formally approved China's WTO accession, and where it was agreed that if there were a conflict between the public interest and the protection of intellectual property rights, public interest would prevail.
Mr. Long suggested that the WTO should enhance the negotiating ability of developing countries to allow them to become active participants in WTO rule formation and that the WTO should increase the effectiveness of its dispute-settlement mechanism so that it can truly be an organization serving not only developed countries but also developing countries.
Furthermore, with respect to dispute settlement, Mr. Long said that the WTO's anti-subsidy and anti-dumping rules should not become the weapons of trade protectionists as it already takes at least one year to settle a case after it is submitted to the WTO, by which time damage has already been done.
(Source: ChinaOnline)
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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.
