CHINA INTELLECTUAL PROPERTY LAW NEWSLETTER
Vol. 4 , No.11 - August 19, 2003
TOPICS THIS ISSUE:
- Soaring Patent Applications In China
- Gm Investigates Violation Of Intellectual Property Rights In China
- China Faces Uphill Battle Against Counterfeits
- Time Warner Claims Little Restaurant Over Infringement
- Gsk Confident That China Will Boost Ip Protection
- Matsushita Decided Panasonic As Its Unified Brand At Overseas Market
Soaring Patent Applications In China
The latest statistics from the State Intellectual Property Office (SIPO) suggest that from January to June, three types of patent applications (utility model patent, exterior design patent and invention patent) increased by 24.9% to 141,523. Patent authorities accepted 49,994 utility model patent applications and 42,860 exterior design patent applications of ten-year-validity. Statistics show that among the applications filed in the first half of 2003, 80.6% were domestic ones and 19.4% were foreign ones. Among invention patent applications, domestic applications accounted for 31.5% and foreign applications accounted for 68.5%, up by 47% and 24% respectively.
Foreign-funded companies keep sizing up China's patent market via invention patents. Although domestic companies saw increase in both volume and proportion of invention patent applications, it will be a hard wrestle for them to compete with foreign rivals.
(Source: SinoCast China Business Daily)
Gm Investigates Violation Of Intellectual Property Rights In China
US automaker General Motors (GM) has launched an official investigation into an alleged violation of its intellectual property rights (IPR) by rival Chinese carmaker Shanghai Automotive Industry Corp. (SAIC) Chery, according to the China Daily newspaper. SAIC Chery's newly released QQ model has allegedly violated the IPR of GM's Chevrolet Spark, manufactured by the US automaker's local joint venture (JV) SAIC GM Wuling Automotive. SAIC has pledged to divest its 20% stake in Chery following the allegations over its QQ model. Chery was forced to compensate German carmaker Volkswagen (VW) last year following the revelation that it had been using its components on its vehicles. VW also operates in a JV with SAIC in China.
Foreign carmakers have begun to crack down on violations of their IPR in an attempt to secure their leadership in the local market as Chinese carmakers have sprung up to challenge them. Chery's disputes with GM and VW highlight the dangers for foreign automakers in operating with Chinese partners that have other JVs with local rivals.
(Source: World Markets Analysis)
China Faces Uphill Battle Against Counterfeits
China is still faced with an uphill battle against counterfeiting although the government had gained initial success in curbing the widespread infringement on intellectual property rights, according to results of a survey by China's top policy consultation agent.
The Development Research Center (DRC) under China's State Council recently released a report on the damage that counterfeiting has on the economy in China.
The release of the report coincided with a symposium sponsored by the Quality Brands Protection Committee, an intellectual property watchdog under the China Association of Enterprises with Foreign Investment (CAEFI).
According to the said DRC report, the market value of counterfeited goods in China was estimated at RMB160 billion to RMB200 billion (US$19 billion to US$24 billion) in the year of 2001.
The report said though the total value of counterfeiting grew at an annual rate of 7% during 1999-2001, counterfeiters were losing ground in terms of market share.
China's retail sales market was expanding at an annual rate of 11% in the period, far exceeding the growth rate of counterfeiting.
A survey on the local enterprises found that they would have led a much harder life if the Chinese government left counterfeiting unchecked.
More than half of the 213 enterprises surveyed said the severity of counterfeiting was alleviated in China after the Chinese government launched a nationwide market disorder rectification campaign in 2001.
This reflected a change of attitude as compared with several years ago, when a similar survey conducted by the DRC in 1999 found nearly three quarters of the enterprises saying things were going from bad to worse.
In a survey concluded in May 2002, the DRC sent out 2,000 pieces of questionnaires to enterprises in various industries around China.
Among the 213 valid responses, 16.4% were foreign-funded companies, 33.8% were share-holding companies and 37.2% state-owned enterprises. All these enterprises were producers of well-known brands in China and the world.
According to official figures, the Chinese government squashed more than 500,000 underground factories of counterfeited goods and dealt with over 1.2 million cases of counterfeiting in year 2001.
Zhang Xiaoji from the DRC said the Chinese government has achieved initial result in curbing the rampant spread of counterfeiting. However, he said the country still faced an uphill battle against counterfeiting.
The DRC survey found that the greatest economic damage caused by counterfeits was in the loss of tax revenue, which reached an estimated RMB27.5 billion to RMB34.5 billion in year 2001.
(Source: Asia Pulse)
Time Warner Claims Little Restaurant Over Infringement
Time Warner had instructed its legal advisors to send a letter to Chongqing Bugs Bunny Restaurant (CBBR) alleging that the said restaurant infringed the intellectual right of Bugs Bunny, by using without authority the name and the image of Bugs Bunny.
Time Warner stated that CBBR used without authority the name and image of Bugs Bunny in its marketing. The behavior violated the Trade Mark Law of the People's Republic of China (PRC), Law of Intellectual Property Rights of the PRC, Anti-unfair Competition Law of the PRC and the Paris Convention for the Protection of Industrial Property.
Time Warner asked the restaurant to dismantle all the billboards and advertise materials infringing Bugs Bunny's intellectual right. The restaurant was also asked to change its name.
Time Warner will adopt legal measure if the restaurant is found to infringe on Time Warner's patents.
(Source: SinoCast)
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Gsk Confident That China Will Boost Ip Protection
UK-based pharmaceutical company GlaxoSmithKline (GSK) is confident that China will do more to improve the protection that it provides to intellectual property (IP). In an interview with the Reuters newswire service, Russell Greig, the President, Pharmaceuticals International of GSK, who was part of a group of business leaders accompanying British Prime Minister Tony Blair on his trip to China, said that meetings with local officials had left him confident that progress could be made on the issue. Greig also said that if the Chinese authorities improved their regulatory systems and boosted the protection of IP, GSK would consider increasing their investment in the country. GSK already sells goods worth around US$350 million in China every year, and has invested over US$400 million in the country. In particular, GSK would like to see China make improvements to its legal system, without which GSK would have no protection against counterfeit goods or generic copies. Greig also said that GSK would consider establishing a research and development (R&D) centre in the country, if the government was capable of putting the correct regulatory regime in place.
China's pharmaceutical market holds great promise. However, the lack of protection afforded to IP has so far discouraged pharmaceutical companies from investing heavily or releasing their latest brand products in the country. Although the introduction of better regulatory systems has accelerated since the country's entry into the World Trade Organization (WTO), the process remains slow, and pharmaceutical companies will need to remain patient.
(Source: World Markets Analysis)
Matsushita Decided Panasonic As Its Unified Brand At Overseas Market
Matsushita Electric Industrial announced last week in Shanghai that it would make Panasonic its global brand and retreat its white home appliances brand National from all markets excluding those in Japan.
Matsushita hopes to hasten its global development by this move. It further made the target of realizing RMB70 billion sales in China in 2005.
Matsushita will finish the replacement of brands within this year. From the second half of this year, all new products debuted will have a Panasonic trademark.
Overseas expansion fuels the growth of Matsushita. Its sales at overseas markets surpassed those in Japan with a proportion of 53%. China made up 11% of Matsushita's overseas markets.
BCD-220U freon free refrigerator, Matsushita's latest product in China, with a trademark of Panasonic, started Matsushita's Panasonic campaign in China.
Matsushita entered China in 1978. Now, it has 53 branches in China, and two R&D centers in Beijing and Suzhou respectively. In 2002, its sales in China reached RMB28.5 billion.
Matsushita expressed that its 2005 sales target in China was RMB70 billion.
Matsushita will also strengthen its R&D power in China. It will invite local talents to develop products suitable for Chinese consumers. Its digital and mobile phone products all enjoy a high market share, but its refrigerator sales are poor. In 2002, it only sold 30,000 refrigerators in China. Matsushita hopes to hit the target of realizing one million refrigerator sales in 2005, with the help of the brand power of Panasonic.
(Source: SinoCast)
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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.
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