IPRProtectionforWineProducers&DistributorsinChina

Dr PaoloBeconcini9th December2015

Welcometothewebinar

29th December2015

Alex Bayntun-LeesProject Executive

China IPR SME Helpdesk

Webinarinteractiontools

39th December2015

Snapshot:HelpdeskServices

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Today’sSpeaker

Name:Dr.PaoloBeconciniFirm: Carroll,Burdick&McDonoughLLPLocation:Beijing,ChinaEmail: pbeconcini@cbmlaw.com

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Dr. Beconcini, Esq. consults to companies seeking legal action against infringers—advising on issues of law and enforcement, conducting evidence gathering, and piloting their cases through the Chinese legal system.

A sought-after authority on IP litigation in China, Dr. Beconcini regularly appears in Chinese courts and attends IPR raids on local counterfeiters. His record of success in patent infringement lawsuits includes a landmark case once designated "case of the year" by several IP journals.

He is frequently invited to speak at conferences devoted to the growing field of Chinese IP, and is regularly interviewed on China IP matters by media around the world such as the Wall Street Journal, CNN, Bloomberg, La Tribune and Il Sole24 Ore to name a few.

Agenda

• InthiswebinarwewillintroducethemajorIPchallengeswinemakersanddistributorsfaceinChina;

• WewilltalkabouttrademarktheftandwhyitissoimportantforyoutoregisteryourbrandsandnamesastrademarksinChina.

• Wewillshowhowtopreventtrademarktheftandhowtofixitwhenitalreadyhappened.

• WewilltalkthenaboutsupplychainandhowyouneedtobecarefulwithyourpartnersinChinawhenitcomestobuildupbusinessrelations;

• Wewilleventuallyshowpossibleremediesagainstcounterfeiters;• WewillclosewithTakeAway.

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China’sOpportunitiesandRisks

Opportunities

• EmergingWineMarket• Growingmarketforsmallervineyardsasconsumers’tastegrows• Establisheddistributionnetworks

IPBottlenecks

• TrademarkTheft• Counterfeiting

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SUPPLY CHAIN!

PollQuestion1

• DoyouknowthebrandofthemostexpensivewineinChina?Anditsvalue?(Pleaseanswerusingthechatfunction)

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$5MillionUSD!

ProtectyourTrademarksagainstThieves

TRADEMARKSQUATTING:

• PeopleregisteryourtrademarkinChinabeforeyoudoandblackmailyoutobuyitbackathighprice

• Squatters– Theyknowyouexist– TheyknowtheChineselaw– ThemaydecidetostopyourproductfrombeingsoldinChinabyfilingtrademark

infringementlawsuitsagainstyou(Trolls);

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ProtectyourTrademarksagainstYourChinesePartnersTRADEMARKTHEFT:

• YourpartnersregisteryourbrandsastrademarksinChinawithouttellingyou:

– Itisagoodthingforthemtokeepyouransomifyouwanttofindanewimporteroneday!

– Theydeterminethebrandimage(willalsofindyouaChinesenamewithoutyouevenknowing);

– TheywillmisleadthebuyersinChinatobelievethemisYOU!– Withthetimetheymaysellyourwineusingyourtrademark:

RESULT:• Youloseprofit• Itdilutesyourbrandname• Youmaybeheldliableforinjuriestoconsumersforthewinetheymakeunder

yourname

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PollQuestion2

• HaveeitheryouoryourcompetitorsdiscoveredthattheirnamehasbeenregisteredinChinabyothers?

A. YesB. NoC. Don’tknow

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HowToPreventTheRisk:Law

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§ Manyformsoftrademarkareregistrable:Signs,logos,words,images,slogansandnowincludingsounds.

§ Jointownershipispossible:NeverRecommendable!

§ Theregistrantofatrademarkenjoystheexclusiverighttousethetrademark,whichshallbeprotectedbylawforaperiodof10yearsrenewableeverytenyearswithouttimelimit.

§ "Collectivemark“:markregisteredinthenameofagroup,association,oranyotherorganizationandusedinbusinessactivitiesbyitsmemberstoindicatetheirmembership.

§ BottlelabelscanbeprotectedalsounderAnti-unfairCompetitionlaw:butmustbewell-knownanddistinctive.

HowToPreventTheRisk:Law

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§ First-To-File.

§ PriorUsewithoutregistration:Onlylimitedlegaleffect.

§ Internationalvs.Nationaltrademarks:

– Nationaltrademarkapplicationsenjoypossibilityofdivision– Claimofpriorityofforeigntrademarkispossible– GoodsareselecteddirectlybytheapplicantandnotrandomlyassignedbyTMO– Noriskofnullificationofmultiplefilingasininternationaltrademarks

HowtoPreventThisRisk:Solutions• FileYourEnglishTrademarksinChina

– FavornationaltrademarksoverInternationalones– Selecttherightclassestodetermineeffectivescopeofprotection

• Goods• Services• Merchandise

– Trademarkyourcompanynameifthat isnotthenameofyourproduct– Trademarkthenameofyourvineyardsifdifferentfromthewine’sname– TrademarktheChinesetranslation/transliterationofalltheabove

• Monitor theChinesemarket– Checkroutinelythetrademarksofyourimporteranddistributors– ChecktheChinatrademarkdatabase

• SetupproperTMlicensing relationswithimporteranddistributors

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PollQuestion3

• Haveyoueverundertakenoneoftheactivitiesindicatedabove?Ifyeswhichone?

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HowtoReacttoSquattingandTheft

• Investigatefactstocollectintelligenceandevidencethatwillsupportstrategicdecisions

• Selectmostsuitableaffirmativeaction– Opposition– Invalidation– Non-useCancellation

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HowtoReacttoSquattingandTheft

• Opposition– Grounds:Article10(SignsofState),article11(Lackofdistinctiveness

article12(3Dmarks),articles13(Wellknown),15(Badfaithagent),16(fraudulentgeographicalsigns),30(identical/similartopriortrademark),31(trademarkregisteredonthesamedatewhichoneusedfirst),32(otherpriorrightsandreputedunregisteredbrands):Onlypriorrightholderorhisexclusivelicensee;

– NoGenericBadFaithGround

• Timing:Threemonthsfrompreliminaryexamination

• Notrecommendableincaseofsquatters

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HowtoReacttoSquattingandTheft• Invalidation

– FraudulentMeans(Notfraudulentintention)

– Grounds:Article10(SignsofState),article11(Lackofdistinctivenessarticle12(3Dmarks),articles13(Wellknown),15(Badfaithagent),16(fraudulentgeographicalsigns),30(identical/similartopriortrademark),31(trademarkregisteredonthesamedatewhichoneusedfirst),32(otherpriorrightsandreputedunregisteredbrands):Onlypriorrightholderorhisexclusivelicensee;

– NoGenericBadFaithGround

• Timing:fiveyearsfromdateofregistration.Nolimitsifpriorrightiswellknown

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HowtoReacttoSquattingandTheft

• Non-UseCancellation– Non-UseforThreeconsecutiveyears– BurdenofProofonRightHolder

• Butrequirementofprimafacieevidence– “ProperReasons”fornon-use:forcemajeure,policylimitation,bankruptcyandliquidationandotherobjectivereasons…..

FastandinexpensivebuthighrateofrejectionbeforeTMO,highestrateofsuccesswhencaselandsinCourt

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TrademarkCounterfeiting• Largescalecounterfeitingaffectingfamouswines(mostlyFrench)• Formofcounterfeiting:

– Rebottling– Fakebottles

• Counterfeitingorganizationswillfocusonhighmarginofprofit,thereforeonwinethatareveryexpensiveorsellmanybottles.

DoesThatMeanitdoesnotaffectyou?

• Inyourcasethecounterfeitersmaybe:– Yourimporters/distributors– Individualstore-sellviainternet

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TrademarkCounterfeiting:HowtoProtectYourself

• Facetoimporters/distributors– Registeryourtrademarkrights– Recordthematcustoms– Secureyourrightsthrougheffectivelicensingcontracts:

• Havethemdiscloseasmuchaspossible• Havethemagreeyouretainsomecontrolonbranding

– Monitortheiractivitiesgoingundercover(discoverover-production);– Implementsomewaste-managementmeasurestoavoidyourbottlestoremaininto

circulation(criticalwhenyoursalesincreases);

• Facetothirdparties– Monitortheinternet(We-chat,Weibo,Taobaoetc.):take–downs.– Knowsomegeography(RumorsareinGuangdongtherearelotsoffakewines, lessso inthe

East!);– Adoptpreventivemeasurestofacilitaterecognitionofgenuineproductsfromfakes;– Takeactionagainstcounterfeiterstoprotectyourbrandandyourclients.

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TrademarkCounterfeiting:Remedies

• AICEnforcement- Cheaperbutwithnodeterringpower- Repetitionofinfringementlikely- AICdoes nothaveeffectiveinvestigative

powers- AICiseasily“corruptible” anduses discretion• CustomEnforcement- Itisveryefficientonpaper- Inpracticenosufficientmanpowertocover

thewholecountry• PoliceEnforcement- Requiresgoodrelationswithlocalpolice- MonetaryThresholds- Veryexpensive andtimeintensive- Useless ifnofollow-up incivillitigation

AdministrativeEnforcement

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TrademarkCounterfeiting:RemediesJUDICIALENFORCEMENT• JudicialenforcementofIPrightsismorereliable thananyadministrative tools• Hasstrongdeterringeffect• Canrecoverpartofthecostsofabrandprotectionprogram• Courtsaregenerallymoreimpartial thanadministrativebodies

OLD TRADEMARKLAW NEWTRADEMARKLAW REMARKS

▶ MaxStatutoryDamages:1,000,000RMB

▶ Nopunitivedamages

▶ MaxStatutoryDamages:3,000,000RMB

▶ Punitive damagesuptothreetimestheawardedcompensatory damages

▶ Destructionofmanufacturingtools!

▶ Civil litigationcanbealsoveryswiftandisnot muchmoreexpensive thanaPoliceenforcement.

▶ Damagecompensation andestructionofinfringing toolsareaneffectivedeterrent.

▶ Inmanycasestheyareabetterdeterrentthanapolicearrest,especiallywhenthearrestedarejustthelowlifeemployees ofthecriminalmastermind!

CASEEXAMPLEComprehensiveStrategy

EXECUTIVESUMMARY PSBACTION

Targetscurrentlyraided 3

Productsseized 10,661

Estimatedvalue SeveralMioEuro/Pending

Individualsdetained 19

Natureoftargets 2factories,1tradingcompany,alllegallyregistered

Numberofbrandsinvolved 1

AdditionalIntelligenceListofotherfactories,warehousesandhundredsofclients

ActionsCriminalcase+threecivilclaims fordamagecompensation

Take-awayMessages

• Register your trademarks in Chinaas soon as possible;

• Register your Chinese nameas well• Take action to recover your

trademarks before it’s too late;• Bind importers and distributor by

written licenses and contracts;• Implement some form of

preventive measures to reduce riskof counterfeiting;

• Monitor the activities of yourpartners;

• Take action against counterfeiting!

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Q&A

Name:Dr PaoloBeconciniFirm: Carroll,Burdick&McDonoughLLPLocation:Beijing,ChinaEmail: pbeconcini@cbmlaw.com

269th December2015

Keepyourquestionscoming!

Snapshot:HelpdeskServices

279th December2015

PLAYtheSeriousGame

• Interactivetrainingandlearningtool• Commonbusinessscenariosto

experiencedoingbusiness,protectingandenforcingIPinChina

289th December2015

Availableonline at:http://www.chinaiprhelpdesk.eu/en/serious-game/

Thankyou

299th December2015