Battles for intellectual property are turning fierce in China and rights owners must know the tactics of both defence and attack, write Richard Li and Joy Jiao

The Chinese market presents tremendous opportunities, but also fierce competition. As the level of development of the Chinese economy increases, brand effect and the fruits of technical innovation play an ever larger role in market competition. If these intangible assets are not protected, they could fall onto the plates of hungry competitors.

Liu Minxuan, a senior partner at AllBright Law Offices in Shanghai, recounts that a new venture became a leader in its industry after several years of hard work. However, when it tried to register on the Tmall platform, it discovered that the trademark in Class 35 required for identification by Tmall had long ago been preemptively registered by a direct competitor.

Although that company was eventually able to preliminarily recover its trademark, “It frustratingly discovered that pirates had preceded it in pirating its trademark in nearly all of the other classes, greatly hampering the development of its business and exposing it to risks everywhere,” says Liu Minxuan.

“If that company had placed greater weight on intellectual property [IP] protection from the outset, registering its trademark in a greater number of classes, it likely would not have needed to desperately wage an all out war on each trademark [class], as now.”

Enterprises must learn how to use the law, as a shield to protect their IP rights, and as a sword to attack infringers. Fortunately, as China has placed increasingly greater importance on the protection of enterprises’ innovations and brand building, the legal weapons available to enterprises have become more potent.

程芳 HELEN CHENG 中伦律师事务所 合伙人,上海 Partner Zhong Lun Law Firm Shanghai

Helen Cheng, an equity partner at Zhong Lun Law Firm in Shanghai, says that the Opinions of the Central Committee of the Communist Party of China and the State Council on Improving the Property Rights Protection System and Lawfully Protecting Property Rights, and the Opinions of the Supreme People’s Court on Fully Leveraging the Adjudication Function to Duly Enhance Judicial Protection of Property Rights, issued in November 2016, and the Outline for the Judicial Protection of Intellectual Property in China (2016-2020) issued by the Supreme People’s Court (SPC) in April 2017, all contain important provisions that will drive and assist in the establishment of an IP punitive damages system.

“It can be seen that China has in recent years consistently been endeavouring to intensify IP protection, intensify the punishment of bad faith infringement and force up the costs of infringement,” she says. “This trend will be of great assistance when enterprises claim damages against infringers through judicial means, and will also increase the deterrent effect on infringers to a certain extent.”

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