Category: News

China Food and Drug Administration requires that all applicants for imported medical equipment must use Chinese names

According to a circular published by China Food and Drug Administration (CFDA) on November 2, 2017, from the publication date of this circular, all applicants for imported medical equipment must use Chinese names.

This change will mainly affect the foreign pharmaceutical companies which used to only register their English names with CFDA when selling their medical equipment to China. Since most big pharmaceutical companies have established their subsidiaries in China and have used their Chinese names for a long time, it is expected that this new rule won’t have much impact on them.

Having said that, for newcomers to the China market, it is time to think of a good Chinese name because you will need it soon. More importantly, don’t forget to register the new Chinese name as a trademark in China before you file it to CFDA. If a Chinese name is not registrable in China, don’t use it. Otherwise, you will be building your business on a name that you don’t own.

Counter-strike! China initiated an interim review on Dispersion Unshifted Single-Mode Optical Fiber originated from the U.S.

According to an announcement published by the Ministry of Commerce of China (“MOFCOM“) today, the MOFCOM has decided to initiate the interim review on Dispersion Unshifted Single-Mode Optical Fiber (“DUSMOF“) originated from the U.S. with respect to its applied anti-dumping measures.

Development

On April 21, 2011, the MOFCOM decided to apply the anti-dumping tax on the DUSMOF originated from the U.S. and the EU since April 22, 2011, for a period of 5 years.

On April 21, 2017, after the final review, the MOFCOM decided to continue to apply the anti-dumping tax on the DUSMOF originated from the U.S. and the EU since April 22, 2017, for a period of 5 years.

On May 11, 2017, 7 Chinese companies applied to the MOFCOM to conduct an interim review on the DUSMOF originated from the U.S. with respect to its applied anti-dumping measures due to the reason that during the implementation of the aforesaid anti-dumping measures, the DUSMOF originated from the U.S. are still dumping in China, and its scale of dumping has been increased exceeding the currently applied anti-dumping tax rate.

On August 1, 2017, the MOFCOM notified the U.S. Embassy of this anti-dumping interim review application and forwarded the relevant materials to it.

Scope of interim review

The scope of interim review is limited to the DUSMOF originated from the U.S.

Period to investigate

This interim review will investigate the period between January 1, 2016 and December 31, 2016.

Procedures of the interim review

  • Comments from stakeholders

Any stakeholder may submit opinions and evidence to the MOFCOM within 20 days of this announcement.

  • Registration for participating the investigation

Any stakeholder may register at the MOFCOM to participate in the investigation within 20 days of this announcement.

  • Questionnaire

The MOFCOM will send the questionnaire to stakeholders for information required for the investigation.

  • Oral hearing

The stakeholders may apply to the MOFCOM to hold an oral hearing. The MOFCOM may also decide to hold an oral hearing ex officio if it deems necessary.

  • Field investigation

If necessary, the MOFCOM may send its staff to do a field investigation on the relevant companies with prior notice to them.

Is this the beginning of a trade war?

The U.S. government initiated the Section 301 investigation against China on August 18. Only 4 days later, China fought back with the anti-dumping interim review. Although the anti-dumping measures on the DUSMOF originated from the U.S. and the EU started since 2011, this interim review clearly sends a message to the U.S. government because the EU is not subject to the investigation this time.

Administration Regulatioins on Patent Priority Review published by SIPO

On June 28, 2017, the State Intellectual Property Office of China (“SIPO“) published the Administration Regulations on Patent Priority Review, which shall be implemented on August 1, 2017.

According to the Regulations, if the applicants meet the conditions and the SIPO agrees to give priority to review their patent applications:

  • For the invention patent applications, the first Notification on Patent Review Opinioins will be issued in 45 days and the application case will be closed in 1 year;
  • For the utility model and design patent applications, the application case will be closed in 2 months;
  • For the patent re-examination cases, they will be closed in 7 months;
  • For the invalidation of invention and utility model patent cases, they will be closed in 5 months;
  • For the invalidation of design patent cases, they will be closed in 4 months.

China ranks the second largest capital exporting country in 2015

According to the press conference jointly held by China Ministry of Commerce (“MOFCOM“), China National Bureau of Statistics (“NBS“), and China State Administration for Foreign Exchange (“SAFE“) on September 22, 2016, China’s outbound investment in 2015 hits record high at USD 145.67 billion, which makes China the second largest capital export country in the world. As the inbound investment to China is USD 135.6 billion in 2015, this means China has become a net capital exporting country.

During the press conference, the *Statistics Bulletin for the Direct Outbound Investment of China in 2015* (“2015 Statistics Bulletin“) was also publicized.

The main features of China’s outbound investment in 2015 are as follows according to the Statistics Bulletin:

  • China’s outbound investment in 2015 hits record high at USD 145.67 billion, which accounts 9.9% of the world’s investment. This makes China the second largest capital exporting country with US raking the first (USD 299.96 billion) and Japan raking the third (USD 128.65 billion). China has become a net capital exporting country in 2015 when the inbound investment to China was USD 135.6 billion.
  • The value of Chinese companies’ offshore assets has exceeded USD 4,000 billion, raking 8th in the world. As of the end of 2015, 20,200 Chinese investors established 30,800 greenfield companies outside China in 188 countries (regions) around the world, which own the toal assets of USD 4,370 billion outside China.
  • In 2015, Chinese companies implemented 579 outbound investment and/or M&A transactions in 62 countries (regions) with the actual transaction amount of USD 54.44 billion, among which, the direct investment amounts USD 37.28 billion accounting 68.5% and the offshore financing amounts USD 17.16 billion accounting 31.5%. The fields of M&A cover 18 major industries including manufacturing, IT/software and IT service, mining, culture/sports and entertainment.
  • Pirelli-ChemChina merger was the largest M&A deal implemented by Chinese companies in 2015, which involves ChemChina acquiring 60% shares of Pirelli with USD 5.29 billion.
  • More than 80% of China’s FDI went to developing countries, 14% went to developed countries and 2.1% went to economies in transition.
  • USD 10.05 billion was invested in equipment manufacturing industry, which indicated 158.4% year-on-year growth and accounted 50.3% of the investment in the manufacturing industry. These investments facilitated the China equipment, technologies, standards and services to “go abroad”.
  • In 2015, foreign companies invested by Chinese had paid various taxes of USD 31.19 billion to their hosting countries, which increased by 62.9% comparing to the previous year. They also hired 1.225 million labors in their hosting countries, which increased by 392 thousand labors comparing to the previous year.
  • 79.7% of the outbound investment in 2015 totaling USD 116.44 billion went to Hong Kong, Holland, Cayman Islands, BVI, and Bermuda. Apparently these places were used as investing vehicles by Chinese companies.
  • More than 80% of the non-financial outbound investment came from local companies (as comparing to companies owned by central government, i.e. large SOEs). The top 3 areas which made most outbound investment are Shanghai, Beijing and Guangdong, each of which had made over USD 10 billion outbound investment in 2015.
  • The new equity investment in 2015 amounts USD 96.71 billion accounting 66.4%. The investment made by earnings amounts USD 37.91 billion accounting 26%. The investment made by debts vehicles amounts USD 11.05 billion accounting 7.6%.

As of now, the full text of the 2015 Statistics Bulletin is not available for download yet but it is expected to be available soon.

Michael Jordan case re-heard by China Supreme Court today

April 26, 2016 the World IP day. Nobody would believe that China Supreme Court did not have any special intention to choose this day to re-hear Michael Jordan’s case on the ownership of the Chinese name for Jordan in China (“Chinese Jordan“).


History

Jordan Company, a local Chinese company engaging in sports appliances, registered the Chinese Jordan as a trademark in several Classes in China (“Disputed Trademarks“). In 2012, Michael Jordan, the famous NBA player, applied to cancel the Disputed Trademarks to China Trademark Review and Adjudication Board (“TRAB“) based on the ground that the Disputed Trademarks infringed his right towards his name.

TRAB rejected the application of Michael Jordan and sustained the Disputed Trademarks. Then Michael Jordan appealed the TRAB decision to Beijing No.1 Intermediate Court. After being rejected by Beijing No.1 Intermediate Court, Michael Jordan decided to appeal to Beijing Higher Court. Unfortunately, Beijing Higher Court still did not support his appeal. As the final remedy, Michael Jordan applied to the China Supreme Court to re-hear this case.

In December 2015, the China Supreme Court decided to re-hear 10 cases filed by Michael Jordan with respect to the ownership of the Chinese Jordan in China. As they are highly similar cases, the China Supreme Court decided to re-hear them together.


Oral hearing

The oral hearing was presided by the vice-president of the China Supreme Court, Tao Kaiyuan, and was heard by 5 judges at the China Supreme Court. At 9am April 26, 2016, Tao Kaiyuan declared the commencement of the oral hearing.

Major issues of this case

The chief judge, Tao Kaiyuan, summarised the major issues of this case as follows:

  1. the specific scope of protection of Michael Jordan’s name right in China;
  2. the popularity of the name of Michael Jordan in China;
  3. has Michael Jordan or Nike Company actively used the Chinese Jordan in China and whether this will affect the protection of Michael Jordan’s name right in this case;
  4. what is the legal ground for the protection of Michael Jordan’s name right;
  5. whether the Disputed Trademarks could mislead the Chinese consumers that they are related to Michael Jordan;
  6. whether the business operation of Jordan Company and the promotion, use and protection of the Disputed Trademarks by Jordan Company will affect this case;
  7. whether Jordan Company has obvious bad faith in registering the Disputed Trademarks;
  8. whether Michael Jordan was tardy in protecting his name right as claimed by him and how this will affect this case.

Arguments

The basic arguments of Michael Jordan and Jordan Company made during the oral hearing are as follows:

Michael Jordan

  1. Michael Jordan enjoys high popularity in China. Chinese public will think of Michael Jordan when they see the Chinese Jordan. The evidences submitted by Michael Jordan are sufficient to prove that the Chinese Jordan is well-known in China as the Chinese name of Michael Jordan and Michael Jordan confirms that others can use the Chinese Jordan to refer to him. The Chinese Jordan is the name of Michael Jordan and should be protected by the law.
  2. Jordan Company has the bad faith to hitchhike the great fame of Michael Jordan by building its entire business around Michael Jordan. They first registered the Chinese Jordan as trademarks in China, then they registered basketball images as trademarks in China, then they registered the jersey number of Michael Jordan as trademarks in China, and combine the Chinese Jordan and basketball image and use it on basketball shoes and other sports products. Jordan Company even registered the name of Michael Jordan’s family members as trademarks in China. Jordan Company also committed that they knew Michael Jordan before their trademark registration. Its bad faith is very obvious.
  3. The Disputed Trademarks can easily mislead the Chinese public that they are related to Michael Jordan and therefore has damaged the right of Michael Jordan. Investigation shows that 70% of the people being investigated believed that Jordan Company had special relationship with Michael Jordan.

Jordan Company

  1. The Chinese Jordan is not the name of Michael Jordan. He does not own any name right towards them.
  2. Michael Jordan never used the Chinese Jordan as his name before. There is no connection between them.
  3. Even if Michael Jordan and the Chinese Jordan has certain connection, there is no legal ground for Michael Jordan to claim the name right in this case.
  4. Michael Jordan licensed the relevant rights to Nike Company exclusively in 1990s. He has no right to claim damages.
  5. In the US and EU, a lot of trademarks containing “Jordan” have been successfully registered.
  6. Jordan Company invested great fortune in the Disputed Trademarks and the goodwill of Jordan Company built on them shall not be deprived of. Jordan Company started its business since 1992 and has been using the Disputed Trademarks for 24 years. Great money was spent on advertisement and numerous honors were awarded to Jordan Company. The trademark right enjoyed by Jordan Company is more stable, specific and real and deserves more protection and respect.

The oral hearing was finished at 13:12 today. The court did not make any judgement today and requested the parties to submit any supplementary opinions, if any, to the court within 7 working days.

Remember what the spokesman of China Trademark Office promised earlier this month? Well, there is a new way to get your Trademark Registration Certificate faster.

As we mentioned in our earlier post “Spokesman of China Trademark Office: all delayed Trademark Registration Certificates will be delivered by the end of May“, “it is expected that all delayed Trademark Registration Certificates will be delivered to the trademark owners by the end of May.”

Now it is close to the end of May but it is still unknown to us whether all delayed Trademark Registration Certificates have been delivered to the trademark owners, or what the progress is.

On April 21, 2016, China Trademark Office published a new announcement on its website declaring that it will adopt a new method of certifying the registration of a China registered trademark, which is, it will print out the Trademark Filing Documents of the concerned trademark and affix a special seal on them to certify the registration of such trademark. It has the same effect as the traditional Trademark Registration Certificate and can be obtained on-site at China Trademark Office.

So if you have not received your delayed Trademark Registration Certificate and you need it urgently, you can contact your China trademark agent to get the certified trademark filing documents which have the same effect as the Trademark Registration Certificate. China Trademark Office will not charge any fee for this service.

Victoria’s Secret wins back its domain names in China

Facts

Victoria’s Secret (hererinafter referred to as “VS“) starts to sell its products in China since 1997. It has registered or purchased the “VICTORIA’S SECRET” trademark in Class 39, 42, 3 and 25 in China in 1995, 1997 and 2011 respectively. VS registered the domain name “victoriassecret.com” and has been using such domain name for its official website.

In 1999 and 2003, a Chinese woman Madam Wang registered the domain names “victoriassecret.com.cn” and “victoriassecret.cn” in her own name and used such domain names to set up websites to publish commercial advertisement, promotion and social information.

VS found out that Madam Wang had squatted many famous brands including Nike, Converse, Dupont, P&G, L’OREAL etc., which had been judged as infringing by several Chinese courts.

VS claimed that Madam Wang’s registration of the disputed domain names could mislead the consumers in China that her websites were owned by VS and therefore has infringed its trademark right towards “VICTORIA’S SECRET” and has constituted unfair competition against VS.

VS asked the court to order Madam Wang to stop the infringement activities, transfer the disputed domain names to VS, and the pay the compensation of RMB 200,000 to VS.


Defense

Madam Wang defended that:

  1. she registered the disputed domain names in 1999 and 2003, at that time, VS did not even enter into the China market and therefore was not known to the Chinese people. She did not have any bad faith to register such domain names;
  2. the “VICTORIA’S SECRET” trademarks are not well-known trademarks in China and therefore her domain names cannot infringe the trademark right of VS;
  3. the company name of VS cannot be an obstacle for her to register the disputed domain names because they are irrelevant under Chinese laws;
  4. she is not obliged to pay any compensation to VS because she did not infringe the trademark right of VS.

Decision of the court

After hearing, the Chaoyang court in Beijing decides that:

  • the earliest registration date of the “VICTORIA’S SECRET” trademark owned by VS is earlier than the registration date of the disputed domain names owned by Madam Wang and the “VICTORIA’S SECRET” brand has enjoyed high popularity in China after long term marketing and promotion in China. As the result, VS’ trademark right towards the “VICTORIA’S SECRET” trademark should be regarded as prior legal rights which should be protected by the Chinese laws.
  • Madam Wang used the prior registered “VICTORIA’S SECRET” trademark with high popularity in China as the main part of her domain names. Such action could be misleading to the Chinese consumers and has taken advantage of the goodwill of VS. Further, such action has prevented VS from registering its trademark as .cn domain names in the most neat and complete form, which caused the failure of VS to use such domain names for commercial activities in China.
  • Madam Wang failed to prove that she enjoyed any legal rights towards the disputed domain names and did not reasonably use such domain names. Her action cannot be justified.
  • Madam Wang had several domain name disputes with internationally well-known companies before and she was determined as having bad faith by several Chinese courts. As such, it can be inferred that she had bad faith in registering the disputed domain names in this case.
  • Madam Wang’s action should be determined as an unfair competition against VS but did not infringe the trademark right of VS.

Finally, the Chaoyang court determines that Madam Wang should stop using the disputed domain names and compensate RMB 100,000 to VS for its economic loss and expenses. The disputed domain names should be owned by VS.

After the judgement, VS did not appeal and Madam Wang is still considering whether to appeal.

New Balance lost another trademark lawsuit in China, again

New Balance v.s. Niu Ba Lun, history

Just to give you some background on this case, the famous shoe maker whom you probably are familiar with is NEW BALANCE ATHLETIC SHOE, INC., a US company (hereinafter referred to as “New Balance“). New Balance entered into the China market in 1990s working with a local Chinese company called Niu Ba Lun (China) Co., Ltd. (hereinafter referred to as “NBL“).

At that time, New Balance used the Chinese characters which sound like “Niu Ba Lun” as the Chinese name for New Balance. Guess what? It is exactly the same as the Chinese trade name of NBL. The cooperation between New Balance and NBL did not work well and New Balance had to exit the China market in the end. As the result, the Chinese name for New Balance “Niu Ba Lun” was owned by NBL.

In 2003, New Balance re-entered into the China market with a new Chinese name for New Balance – “Xin Bai Lun”. Unfortunately, such Chinese trademark is owned by another Chinese company and New Balance was claimed for RMB 98 million for trademark infringement in 2013. You probably have heard of it in 2015 but it is not the story we are talking about here. Just to let you know that this is the first trademark lawsuit that New Balance had lost in China.


Opposition against the “N” mark

On March 12, 2004, a Chinese company in Fujian province applied to register the following mark on shoes:

the “Disputed Mark” China Registration No.3954764

The Disputed Mark was preliminarily approved on May 7, 2007 and was later assigned (as a pending trademark application) to NBL on December 1, 2009.

Right after the preliminary approval of the Disputed Mark, New Balance opposed against it at China Trademark Office claiming that it was similar to the prior “N” mark registered by New Balance in China in 1983.

Prior “N” mark owned by New Balance China Registration No.175151

As you can see, the above “N” marks are not that similar and therefore China Trademark Office rejected New Balance’s opposition on October 20, 2010.

Then New Balance appealed this case to Trademark Review and Adjudication Board of China (“TRAB“). On December 12, 2011, the TRAB rejected New Balance’s opposition again based on basically the same reason. New Balance did not appeal the TRAB decision to the court, and this, as we will comment later, caused New Balance to lose the second trademark lawsuit in China.


Invalidation against the Disputed Mark

As said above, New Balance did not appeal the TRAB decision in 2011. According to Chinese laws, such decision has become final. As such, when it comes to 2014, New Balance had no choice but to file an invalidation application against the Disputed Mark in order to continue the action against the Disputed Mark.

During the invalidation proceeding, New Balance cited a new trademark owned by it and claimed that the Disputed Mark should be cancelled because it was similar to such mark.

New “N” mark cited by New Balance China Registration No. 3933149

TRAB did not support New Balance’s invalidation application and rejected it on December 15, 2014.

New Balance then appealed such rejection to Beijing IP Court on May 19, 2015.

After hearing, Beijing IP Court held that this case was substantially the same as the opposition case filed by New Balance and rejected by the TRAB in 2011. Since New Balance did not appeal such opposition case, it should take the corresponding legal consequences. According to the law, if the TRAB has made a final decision on an opposition case and the opposing party does not appeal, the opposing party shall not apply to review the same case with the same ground and facts. The court further commented that both New Balance and NBL have been using their respective trademarks in the market for years and such trademarks have been co-existing in the market for years as a matter of fact.

Based on the above, Beijing IP Court decided that the TRAB shall not accept the invalidation case filed by New Balance in 2014 and therefore revoked the TRAB decision on the invalidation case. Beijing IP Court further decided that it was not necessary for the TRAB to make any decision on the invalidation case filed by New Balance.


Comments from China Filing

Theoretically, New Balance still has the chance to appeal the decision made by Beijing IP Court. However, the chance for New  Balance to overturn this case does not seem to be very high.

This means that New Balance may have to swallow the bitter pill that both “N” marks owned by NBL and New Balance will continue to co-exist in the China market. As the result, it seems that New Balance still has a lot to do with its trademark strategy in China.

Spokesman of China Trademark Office: all delayed Trademark Registration Certificates will be delivered by the end of May

Previous story: Delayed Trademark Registration Certificates

Since August 27, 2015, none of the trademark attorneys in China had received any Trademark Registration Certificates from China Trademark Office. Why? The reason given by China Trademark Office sounds unreal: they are running out of paper.

It is not any ordinary printing paper that you can purchase from Staples. It is a special anti-fake paper which is used to print the money. According to the law, China Trademark Office has to go through the public tendering process to purchase such paper from qualified suppliers.

The public record shows that China Trademark Office invited tenders for the supply of 3 million pieces of special anti-fake paper on January 14, 2016 and the deal was made on January 26, 2016.

But why did they only start to purchase the paper in January 2016 but did not do that in August 2015 when the paper ran out? No one can answer this question.


Solution

According to the spokesman of China Trademark Office on April 7, 2016, after the above story was published by the media, the leaders of China Trademark Office paid high attention to this matter and initiated an internal investigation.

The spokesman said that this incident was caused by complicated public tendering procedures and miscommunication among the relevant departments. China Trademark Office sincerely apologize for delaying the issuance of Trademark Registration Certificates and for the inconvenience brought to the trademark owners.

Now the paper is in place and China Trademark Office has commenced to print and issue the Trademark Registration Certificates since March 28, 2016. It is expected that all delayed Trademark Registration Certificates will be delivered to the trademark owners by the end of May.

The spokesman also said that China Trademark Office will learn the lesson from this incident, optimize the process, and improve efficiency in order to prevent such incident from happening again.

ABInBev being sued for infringing the Chinese trademark “Mojito”

Summary of the case

Recently, Dao Ge Ka Te (Beijing) Media & Culture Development Co., Ltd. (“DGKT“) sued ABInBev (China) Sales Co., Ltd. (“ABInBev“) claiming that ABInBev’s newly launched cocktail products with the brand name “MIXXTAIL” have infringed its trademark rights towards “Mojito” which was registered by DGKT as a trademark in China.

DGKT asked ABInBev to stop using the word “Mojito” on its cocktail products and pay RMB 1.32 million to DGKT as a compensation of its economic loss. The court in Haidian District, Beijing has accepted this case.

DGKT claimed that it was the owner of the Chinese registered trademark “Mojito” in Class 33 (registration No. 12467908) and had been using such registered trademark on cocktail products since its registration.

DGKT also claimed that since April 2015, ABInBev had been selling its “MIXXTAIL” branded cocktail products bearing the word “Mojito” in China knowing that DGKT owned the trademark rights towards “Mojito”. In order to prove this, DGKT had purchased a sample of the alleged infringing products in a supermarket in Beijing and had notarised the purchase.

DGKT believed that ABInBev had infringed its trademark right towards “Mojito” by selling cocktail products with its registered trademark “Mojito”. Such action was for profit and had caused economic loss to DGKT.

Accordingly, DGKT sued ABInBev for trademark infringement and requested the court to order ABInBev to stop selling products which infringe DGKT’s trademark rights towards “Mojito” and stop using “Mojito” on all promotion materials. DGKT also claimed for RMB 1,320,750 as a compensation of its economic loss.

This case is now in the process of court trial.


Comments from China Filing

ABInBev just launched its “MIXXTAIL” branded cocktail products in November 2015. Now it being sued for trademark infringement will undoubtedly affect its sale of the cocktail products in China.

However, it seems that ABInBev may have a good chance to win this case because “Mojito” should have become a generic name for a certain kind of cocktail after long term use, which disqualifies it to be trademarked according to Chinese laws. As such, ABInBev should have good chance to invalidate such trademark, which will render the trademark infringement case filed by DGKT groundless.

That said, if DGKT applies for an injunction and is able to provide sufficient guarantee in support of the injunction, it is still able to stop ABInBev from selling the products in dispute in China. This surely will have great impact to ABInBev’s business in China.


Take-away

Big companies should actively monitor the registered trademarks in China and if any generic name is gazetted or registered as a trademark in China, the concerned companies should work together to oppose or invalidate such trademark before it causes them any substantial trouble.