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Trade mark protection in China–how and why
The legislation and procedures for protection of trade marks in China are undergoing evolution and enhancement, especially since the establishment of the Intellectual Property Courts in Shanghai, Beijing and Guangzhou in late 2014. Australian traders manufacturing or selling products in China, need secure and enforceable trade mark rights, even more so after the signing of the ChAFTA agreement in June 2015, with the aim of encouraging Australian businesses to look to China for market opportunities.
For those companies already conducting business or investigating opportunities in China, some lessons have been learnt. For example, China is a first to file country for trade mark registration, so it is necessary to file early. Culturally, piracy of marks may be seen more as business opportunity than an unethical business practice, hence the common practice by Chinese nationals. Finally, the evidentiary burden, in opposition or court proceedings in China if opposing or suing when piracy of a mark has occurred, is extremely difficult to meet.
What is becoming abundantly clear is that the best outcome for protection of trade mark rights, is to obtain a ‘bundle of rights’: trade mark registration for word marks, in English and Mandarin, trade mark registration for logos and devices, recordal of trade mark rights at China Customs, and copyright registration for logos and devices.
Copyright registration is increasingly recognized as a valuable tool in the ‘bundle of rights’ obtainable in China, especially as copyright rights are not limited to any particular list of goods and services, as is the case with trade mark protection. The process is relatively straightforward as discussed below.
Ownership of copyright in China
There is no requirement for copyright to be recorded in China. If an Australian company is able to prove copyright ownership copyright rights will automatically exist in China. Such rights can then be relied on in trade mark opposition proceedings or in court proceedings when challenging use and registration of the copyright work by another trader.
When relying on copyright ownership in trade mark proceedings, the copyright must in a work of fine art such as a stylized trade mark, logo, label or device. The copyright owner must also establish that the mark sought to be registered or being used by the other trader is identical or substantially similar to the copyright work. Finally it is necessary to establish that the copyright work was accessible in China, that is, it was published in China, and therefore deemed accessible to traders in the marketplace.
Given the significant burden which Australian companies face to meet evidence requirements before the Trade Marks Office (TRAB) or the courts, recordal of copyright with the Copyright Protection Center of China (CPCC) can assist. A Certificate of Recordal of Copyright is not automatic proof of rights as there will also be an assessment of similarity and accessibility by the TRAB or the courts, however the documents filed in support of an application for recordal of copyright and the grant of the Certificate of Recordal provide powerful proof of existence of copyright, the date of copyright creation and the identity of the owner of the copyright.
Documents needed to obtain a Certificate of Recordal of Copyright
1. An application
This must include samples of the copyright work. Under Chinese copyright law, a work of fine art is protectable by copyright. The courts have held that the work should have originality, that is, express the creator’s creative choice, arrangement and selection. Stylized word marks with a reasonable level of stylization, and logos, labels and devices have been held to be works of fine art.
2. Proof of ownership of the copyright
This may be documentary proof of creation of the work by a third party together with assignment of the copyright. Where a copyright work is commissioned from an author external to the company evidence of the instruction, examples of the work created, and proof of assignment of copyright by Deed of Assignment are the relevant proofs. Where the copyright work is created by an employee, a declaration setting out the employment details, the instruction to the employee, details of the work created, demonstrates ownership of the copyright by the employer.
3. Description of the work
This type declaration is typically needed where a trade mark has been in long term use, and the documents in (2) above are not available. In this case the business seeking to prove copyright ownership should provide, in declaration form, the purpose of the creation of the work, likely date of creation, proof of publication, historical information about use of the copyright work, being claims and documents in support of an inference of copyright ownership.
4. Proof of identity of the copyright owner
This is a certified copy of the certificate of incorporation of the company claiming copyright ownership, or in the case of an individual, a copy of passport details.
5. Power of Attorney
This is to enable to Chinese attorney to represent the copyright owner in the filing of the application for recordal of copyright and supporting documents before the CPCC.
As is clear from the above list, a company may not, for historical reasons, be able to provide documents which are conclusive proof of copyright ownership - employees may have moved on, records lost, no deed of assignment obtained for the author commissioned to create the work. In such cases the best case is put to the CPCC and any resulting Certificate of Recordal of Copyright used in opposition or enforcement proceedings will be assessed for weight of proof.
It is important to ensure that creation of any significant artwork by employees or external designers/artists is documented. For work created outside the organization, an assignment of the copyright must be obtained in order for ownership of the copyright to transfer from the author (creator) to the business. If not, the ownership remains with the author/creator. The Deed of Assignment is a very straightforward document, obtainable from your IP advisor.
In many circumstances registration of IP is unlikely to provide definitive enforceable rights fit for every scenario. The ‘bundle of rights’ approach provides more comprehensive and flexible protection.
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