Maria Smith and Andrew Sim | 23 April 2020

COVID-19 and Intellectual Property: Navigating the evolving brand issues

Speakers

Maria SmithHead of Trademarks

Practice

+852 2846 2151

maria.smith

@bakermckenzie.com

Andrew SimPartner

+86 10 65353916

andrew.sim

@bakermckenzie.com

Agenda1 Trends already becoming entrenched

2 Considerations for brand protection and maintenance under COVID-19

3 Advertising / Marketing Issues

4 Advertising / Marketing Examples

5 Q&A

As always, strong correlation between crises and innovation

Social distancing and isolation have led us to completely reinvent our

daily lives and routines-aided by technology

After this is over, a new consumer will emerge

This new consumer will be looking to brands to help define the new

world

4

Trends Emerging From the COVID-19 Pandemic

1

Trends already becoming entrenched

Hyper-connectivity and a virtual experience economy

Technology-enhanced experiences

Virtual shopping a reality

Growth in e-commerce and digital marketing

Delivery and pick up options

6

Convenience

Self-checkout solutions

Food and food safety

Sustainability

Wellness and Health

Hyperconnectivity and the rise of ecommerce necessitate a robust digital brand

protection strategy

New threats to cybersecurity, new listings of counterfeit goods

Rise of online scams

Protect digital content

Protection of new IP

Protection for online retailing

Redesign of logos

7

What do these trends mean for brands and marketing strategies

Marketing Opportunities

Building brand reputation by doing the right thing

Consumer expectations

To do everything possible to protect the well-being and financial security of their

employees and suppliers.

They want brands to shift to producing products that help consumers meet the

challenges of today.

They want brands to offer free or lower-priced products to help people at high risk and

those whose jobs have been affected

Spreading the message – through branding

Promoting social distances

Showing care and empathy

Incentives for brands to show what they are doing 8

2

Considerations for brand protection & maintenance under COVID-19

1. Repurposing Production / New Products

What to consider:

Is the business looking to monetize the opportunity?

Is this a temporary switch of activities or is it something the business sees as being a

more permanent addition to its business?

Will the business look to protect the trademarks, and would they take enforcement

action to prevent others using conflicting trade marks?

Can existing trade marks for the Brands core goods/services protect use on face masks

and sanitizers?

Are you are going to licence use of your trade mark?

10

2. Thorough review of IP portfolios

3. Failure to use a trade mark

temporarily

non-use cancellation vulnerably

5 year use for incontestability

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Trade marks incorporating the terms

12

Coronavirus / COVID Applications

COVID-19

CORONAVIRUS and

Quarantine

Terms to be used in connection with goods or services that relate

to or are inspired by pandemic

Terms that are opportunistic or misguided attempts to reserve

rights in a term

The owner of the well-known Corona Beer trade mark owns

numerous trademark applications and registrations for CORONA

marks

Make sure that your trade mark serves an identifying, not a

descriptive, function

13

If you wish to obtain protection for any Covid/ Coronavirus trade

marks it is important to bear in mind the following guidelines:

Do

Do

n't

14

Registrable

COVID-VENTURES for venture capital fund

management services, filed by a digital health and

telemedicine company

COVID CARE for Software as a Service (SaaS) for

supporting individuals, teams, and organizations

responding to crisis and emergency events

CORONAVIRUS TAX AMNESTY PROGRAM for tax

planning advice and consulting services.

The Quarantine Concierge for grocery deliveries and

the delivery of meals, flowers, magazines and parcels

CORONA COUTURE, for various protective gear and

apparel

Do

Do

n't

15

Unregistrable

COVID-19 VAX for vaccines generic

FXCK COVID-19 and FXCK CORONAVIRUS for

clothing descriptive

I SURVIVED THE CORONAVIRUS, I SURVIVED

COVID-19, I BEAT THE CORONAVIRUS covering

apparel, bumper stickers, buttons, etc. are all likely to

be refused for failure to function as trademarks.

Terms that convey a sentiment, or general

information, about COVID-19 usually on the front of

a t-shirt as opposed to identifying and

distinguishing the applicant’s goods from those of

others, can’t be registered

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Unregistrable (cont.):

conveying a message, but no

trade mark function

for clothing - Offensive / against

public morality / in bad taste, etc.

CORONAVIRUS: MADE IN CHINA

for clothing a good example of

how a proposed trademark can

simultaneously be descriptive,

probably racist, and fail to

function as a source identifier

China is being proactive about pandemic related applications. The

CNIPA recently released examination guidelines to address malicious

filings of:

marks containing the names of people involved in the epidemic

marks related to the epidemic virus and disease

marks related to epidemic-related drugs

marks for protective and preventive products

other marks related to the epidemic.

17

火神山 = 雷神山 =

“Green Channel” for Trademark Registrations Related to Epidemic Prevention and Treatment

Some IP offices may have fast track procedures for applications for

goods and services related to Coronavirus (Covid-19) epidemic

prevention and treatment

Again China is one of them, since 18 February 2020, applicants have

been able to request fast-tracked examination. One application covering

hand sanitizer, disinfectants and fungicides was examined just three

weeks from its application date

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Suspension of Operations at IP Offices and Deadlines

Keep track of the operations of IP Offices

Deadlines relating to pending applications (e.g. responses to Office

Actions)

Registrations (e.g. maintenance or renewal)

Administrative or legal proceedings

have been extended or postponed in some jurisdictions

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Do’s

Continue to instruct according to the original deadlines so that responses can be filed when it becomes possible

Consider all options and take the most effective one to maintain a pending trademark application or a registration

Determine the possibility of requesting an extension or to benefit from a statutory grace period

Respond partially, or file stop gap submissions, to any notice in order to maintain the application or registration

Check which trademark proceedings can be suspended and what needs to be done to apply for a suspension

Check whether trademark renewals be delayed due to the coronavirus outbreak

Don'ts

Ignore a deadline or rely on extended deadlines unless absolutely necessary

20

3

Advertising and MarketingIssues

Key issues

False/misleading advertising

False/misleading/unsubstantiated medical/health claims

Distribution of medical-related supplies as gifts

Product labelling and export/import regulations (these will not be

discussed at this webinar)

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No false or misleading description - information provided should be consistent with the actual effects, function, purpose, quality, ingredients, etc. of the product

Scientific results, statistics, research findings, etc., used should be accurate, verifiable and referenced

In some jurisdictions, no superior or absolute descriptors, e.g., “the best”, “the highest grade”

In some jurisdictions, no direct comparative advertising

23

General Rules – True and Non-misleading

Potential Risks

Administrative penalties (in some jurisdictions)

Civil liabilities (in most jurisdictions)

Criminal liabilities (in most jurisdictions)

Negative publicity and reputational damage

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4

Advertising / MarketingExamples

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Masks and PPE – Marketing example in China

Medical or

surgical masks

PPE

(e.g. gowns)

Non-medical

masks

“Medical Devices”

• Prior vetting is required for their

advertisements

• Celebrity endorsement is not allowed

• Note: registration or record-filing with

local Medical Products Administration

(MPA) required for manufacturing or

selling medical devices

No prior vetting of advertisements required

However, must not:

• Claim disease treatment functions (not

advisable to mention disease names, e.g.

“COVID-19” or “SARS”)

• Use medical wordings or wordings that

are likely to cause confusion with medical

or surgical masks (e.g. “blocks bacteria

and viruses”)

NOT “Medical Devices”

Goods:

Regular disposable masks

Advertising Claims:

• “Fully enclosed fit protection;

pollen, droplets, bacteria,

viruses”

• “Effectively blocks bacteria

and droplets”

• “Effective barrier ≥95%”

Problem:

Use of wordings that are likely

to cause confusion with

medical devices

Outcome

Local AMR at Shantou has

opened a case for investigation

Case #4 in Guangzhou AMR’s “Cases of Illegal Advertisements During COVID-19” 27

Avoid medical terminology such as “bacteria” or “virus” on non-medical masks

Goods:

Medical isolation masks

Advertising Claims on

TMALL:

• “Hai Shi Hai Nuo-brand

surgical mask for medical use”

• “Bacteria-free disposable

non-woven mask”

Problem:

Description inconsistent with

the actual product sold

Outcome:

Due to the large amount of money

involved (200,000 masks were sold via

TMALL), the case has been

transferred to the public security

organs for handling

Case #5 in the SAMR’s “First Batch of Typical Cases of False and Illegal Advertisements in 2020” 28

Ensure description is accurate

Provide details of study / experiment

Goods:

Hand sanitizers

Advertising Claims on

WeChat:

“Contains 50% alcohol;

effective disinfection rate

reaches 99.999%”

Problem:

Did not specify the product’s action

time, conditions of the experiment, and

types of bacteria and viruses studied

Outcome:

Local AMR at Guangzhou has opened

a case for investigation

Case #5 in Guangzhou AMR’s “Cases of Illegal Advertisements During COVID-19” 29

Avoid unsupported and unproven claims

Goods:

Food, healthcare food, oral sprays

Advertising Claims:

• “Activate own immune cells”

• “New discovery against novel

coronavirus”

• “Can prevent coronavirus

from attacking respiratory

epithelial cells”

Problem:

• Advertiser unable to provide

evidence that the products can

prevent coronavirus infection

• The advertisement contains false

and misleading information

Outcome:

Local AMR in Tianjin imposed

administrative penalty of

RMB 200,000

Case #1 in the SAMR’s “First Batch of Typical Cases of False and Illegal Advertisements in 2020” 30

On February 13, 2020, the Customs

arrested two men on suspicion of

contravention of the TDO

Normal saline labelled as “0.9% sodium

chloride" and "solution for irrigation”

The pharmacy added a sign to the carton,

claiming that the normal saline could be

used for hand washing and floor cleaning

Such description is not in line with the

product description on the bottle

Customs Enforcement in HK: False or Unsupported Claims

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False composition description and containing toxic methanol

Case 1:

“75% ethanol” sold in plastic bottles labelled as 1 L

Lab results: <0.1% ethanol; 52% methanol; actual vol. 737 mL

Case 2:

“75% ethanol” sold in plastic bottles labelled as 500 mL

Label stated “complying with the relevant national standard”

Lab results: 69% ethanol; 8.2% methanol (not compliant with

national standards); actual vol. 478 mL

Case 3:

“75% ethanol” sold in plastic bottles labelled as 5 L

Label stated “complying with the relevant national standard”

Lab results: 73% ethanol; 1.6% methanol; actual vol. 4.482 L

Customs Enforcement in HK:False Composition Description on Unsafe Disinfectants

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Distribution of masks as gifts

For disposable masks, conspicuous and bilingual “Not Reusable” warnings

in bold are advisable

Some businesses have been giving out masks as gifts or promotional items.

These masks may be sourced from elsewhere, but not manufactured by the

businesses themselves. Some points to note:

Advisable to clearly state the actual manufacturer and the word “GIFT”

Any trade description should still be true and non-misleading

Advisable to obtain from the manufacturer:

Certificate confirming the advertising claims

Certificate issued by an approved laboratory showing that samples of the

product conform to the advertising claims and relevant safety standards

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5

Q&A

Many expect the trend of globalization might

end after the winding up of the COVID-19

pandemic. What would be the IP strategies to

deal with the situation should this unfortunate

scenario come true?

What is your view on how to best manage the

brand in the event that the brand is associated

with the negative effect of this pandemic i.e.

source of pandemic spread, country reputation?

What’s the best strategy for a

confectionery business to adopt post

COVID-19?

Further

Questions?

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