MARCH
New Regulation on Patent Agency Come into Effect on Mar 1
The revised Regulation on Patent Agency would enter into force as of Mar 1. The Regulation meet the requirements of streamlining administration and delegating powers, combining decentralization and management, and optimizing services and the needs of optimizing the business environment, stimulating market vitality and social creativity. The Regulation was made according to the actual situation of the patent agency industry, improving the practice access of patent agencies and patent agents, enhancing the practice norms of patent agents, refining the inspection and supervision system, and legal liability, providing institutional support for the healthy development of the patent agency industry. By the end of 2018, China had 18,668 patent agents and 2,195 patent agencies, with more agencies capable of providing foreign-related services, patent early warning, analysis, licensing, pledge financing, litigation, mediation. There were more than 1,000 agencies engaged in PCT application. After the promulgation of the New Regulation, CNIPA had actively carried out promotion and implementation work, and would complete the revision of relative rules as soon as possible. CNIPA would continue to raise the level of supervision of the industry, ensure that the New Regulation is implemented in place, and provide strong support for innovation-driven development.
The Government Work Reports of the Two Sessions Add Content Related to IPR
On Mar 15, the second session of the 13th National People's Congress concluded in Beijing. The meeting heard and examined the government work report delivered by Premier Li Keqiang of the State Council. The report had 83 amendments concentrated in six areas: ensuring and improving people's livelihood, accelerating scientific and technological innovation, deepening reform in key areas, promoting rural revitalization, strengthening pollution prevention and ecological construction, and continuously releasing the potential of domestic demand. The govenment would continue to reduce the time for patent examination and trademark registration. In addition, the government would reform and improve the financial support mechanism, establish a science and technology innovation board that would pilot an IPO registration system, encourage the issuing of special bonds for innovation and entrepreneurship, expand the use of intellectual property pledge financing, and and support the growth of venture capital investment.
First Case Heard in Public at the Intellectual Property Court of SPC
On Mar 27, the Intellectual Property Court of the Supreme People's Court held a public hearing on the dispute over infringement of invention patent rights among the appellant Xiamen Lucas Automotive Parts Co., Ltd. (Lucas) and Xiamen Fuke Automotive Parts Co., Ltd. (Fuke), and the appellee Valeo Systemes D'Essuyage, and Chen Shaoqiang, the defendant in first instance. This was the first case heard in public since the Intellectual Property Court of the SPC was officially established on Jan 1, 2019. Luo Dongchuan, vice president of the SPC, chief judge of the Intellectual Property Court of SPC, personally served as the presiding judge of this case. The case in first instance was the first partial judgment made by Shanghai Intellectual Property Court. It also discussed the relationship between partial judgment and temporary injunction, for the first time, and made clear the applicable conditions and rules when the two systems coexist. After the trial, the Intellectual Property Court of SPC ruled that the appeal request of Lucas and Fuke could not be established and was rejected, and the decision made by Shanghai Intellectual Property Court was upheld. The compensation would be decided by the Shanghai Intellectual Property Court.
Foreign Investment Law
On Mar 15, the second session of the 13th National People's Congress passed the Foreign Investment Law of the People's Republic of China, which is China's first basic law in the field of foreign investment. The Law would come into force on Jan 1, 2020. The Law made clear provisions on issues of common concern to foreign investors, such as intellectual property protection and technology transfer, sending a signal to the world that China continues to promote trade liberalization and investment facilitation. It stipulated that China protects the intellectual property rights of foreign investors and foreign-invested enterprises, protects the legitimate rights and interests of intellectual property right holders and relevant right holders, and shall investigate legal liability for intellectual property infringement in strict accordance with the law.
Copyright Registration
On Mar 1, the website of the National Copyright Administration released the National Copyright Registration Report in 2018. Remarkable achievements had been made in promoting the transformation of copyright achievements throughout China, and the ability of creation and innovation of all kinds of works and software had been greatly improved. According to statistics, the total number of copyright registrations in China reached 3,457,338 in 2018, an increase of 25.83% compared with 2017 (2,747,652). A total of 2,351,952 works were registered nationwide in 2018, an increase of 349,986 over the number of works registered in 2017 (2,001,966), a growth rate of 17.48 percent. A total of 1,104,839 computer software copyright registrations were completed in 2018, an increase of 48.22% over the same period last year.
China Audio-Video Copyright Association
On Mar 21, the monopoly dispute of nine KTV companies in Guangdong v. China Audio-Video Copyright Association (CAVCA) was heard in Beijing Intellectual Property Court. The dispute originated from an announcement issued by CAVCA in November 2018, in which CAVCA informed KTV terminal producers and karaoke operators to delete more than 6,000 unauthorized songs, otherwise they may face the risk of prosecution. During the trial, the two parties argued around whether CAVCA's acts involved in the case violated the provisions of Article 17, paragraph 1, subparagraphs (4) and (5) of the Anti-Monopoly Law, whether CAVCA had a dominant position in the market, whether the act involved in the case was an act of bundled transaction, whether it limited unreasonable transaction conditions, whether the relevant litigation request put forward by the plaintiffs belonged to the circumstances stipulated in Article 34 of the Regulations on Collective Administration of copyright, whether it should be reported to the relevant departments of the State Council, and whether the plaintiffs' prosecution should be rejected.
New Plant Varieties
According to data from the Protection of New Varieties of Plants Office of State Forestry and Grassland Administration, by the end of 2018, China had accepted a total of 3,715 applications for new plant varieties and granted 1,763 new plant variety rights at home and abroad. Among them, 904 applications were accepted and 405 granted in 2018. From 1999 to 2017, domestic applicants obtained 1,170 new plant variety rights, accounting for 86.16% of the authorized total. 10 foreign countries obtained 188 new plant variety rights in China, accounting for 13.84%, of which Germany, the Netherlands and France ranked top three, with 57, 46 and 30 plant variety rights respectively. The new plant varieties authorized by foreign variety owners were mainly in the genus rosa and ornamental plants. The number of applications and grants of new variety rights of forestry plants in China had increased significantly in recent years, indicating that the protection of new varieties of forestry plants in China had entered a period of rapid development.
Parfums Christian Dior
On March 7, Parfums Christian Dior's (Dior) trademark registration rejection case was selected as one of the "Top ten cases promoting the rule of law in 2018". On Apr 26, 2018, the SPC held a public hearing on Dior v. Trademark Review and Adjudication Board of the State Administration for Industry and Commerce on the administrative dispute over trademark registration rejection. The final judgment of the SPC held that the sued decision made by the Trademark Review and Adjudication Board violated the principle of legitimacy of administrative procedures and may harm the reasonable expected interests of the administrative counterparty. The first and second instance courts did not correct this properly, so the court ruled to revoke the judgments of first and second instance, and ordered the Trademark Review and Adjudication Board to make a new review decision on the trademark involved in the case.
Shenzhen Regulation
Since Mar 1, The Regulation of Shenzhen Special Economic Zone on the Protection of Intellectual Property Rights was formally implemented. The Regulation was China's first comprehensive and the strictest regulation on the protection of IPRs. The highlights of the Regulation included: First, the construction of a credit punishment mechanism for violations of IPRs in judicial adjudication, administrative penalties, government investment, procurement and bidding, and support for reward activities. In addition, information that violates IP compliance commitments should be taken into the public credit information system. Second, it stipulates that infringement units will not be allowed to undertake government investment projects within five years; Third, strengthening multiple disputes resolution mechanisms, such as litigation docking and administrative mediation. Fourth, establishing a technical investigator system for administrative law enforcement. Fifth, expanding the scope of application of direct orders to stop infringement. Sixth, clarifying the calculation of illegal business volume of violations of IPRs.
APRIL
First Administrative Case of Patent Right Invalidation
On Apr 23, the Intellectual Property Court of SPC publicly heard the administrative dispute over the invalidation of the invention patent right among the appellants Beijing Baidu Netcom Technology Co., Ltd. and Beijing Sogou Technology Development Co., Ltd. v. the Patent Reexamination Board of CNIPA. The case was the first administrative case of patent right invalidation tried by the Intellectual Property Court of SPC, but the court did not pronounce a verdict in court after the trial. The case stemmed from a patent lawsuit between the two companies involving the deletion function of input method. In November 2015, Sogou sued Baidu to the Beijing Intellectual Property Court on the grounds of infringing its patent rights. The court of first instance ruled that the Baidu input method fell into the scope of protection of the patent involved and should immediately stop the infringement. Baidu appealed, yet the verdict was upheld. While dealing with the patent lawsuit, Baidu launched a patent invalidation procedure. In February 2018, the former Patent Reexamination Board made a decision to maintain the validity of the patent right involved in the case. Baidu filed an administrative lawsuit with the Beijing Intellectual Property Court, requesting to rescind the sued decision. In January 2019, the court revoked the sued decision. Baidu and Sogou both refused to accept the judgment and filed an appeal to the SPC.
Revision of Trademark Law and Anti-Unfair Competition Law
On Apr 23, the 10th meeting of the Standing Committee of the 13th National People's Congress decided to amend eight laws, including the Trademark Law and the Anti-Unfair Competition Law. The revision of the Trademark Law involved six provisions, four of which were regulations of malicious trademark registration, providing a direct, clear and operable basis for cracking down on trademark registration. The revision of the Anti-Unfair Competition Law was another revision after November 2017, involving only four provisions.
2019 High Level Forum on China Intellectual Property Protection
On Apr 24, the 2019 High Level Forum on China Intellectual Property Protection opened with the theme of "strengthening the protection of intellectual property and fostering a harmonious business environment" in Beijing. Shen Changyu, director of CNIPA pointed out that the theme of this year's forum met the actual needs of China's development and was of great practical significance. In 2019, centering on strengthening IPR protection, CNIPA would focus on five major tasks: formulating a strategic outline for a powerful country in IPR, developing and implementing plans for the construction of an IPR protection system, improving laws and regulations on IPRs, strengthening IPR source protection, and innovating IPR protection mechanisms.
Issued by Six Departments
On Apr 19, the General Administration of Market Supervision, together with the Ministry of Public Security, the Ministry of Agriculture and Rural Affairs, the General Administration of Customs, the National Copyright Office, and CNIPA, issued the Measures for Strengthening Intellectual Property Law Enforcement in Online Shopping and Import and Export, to further improve the ability of IP law enforcement and strengthen the investigation and punishment of IP infringement with close cooperation among departments, and earnestly safeguard the legitimate rights and interests of the right holders and the market order of fair competition. In view of the current online and offline integrated operation, cross-region and chain of torts in the field of online shopping and import and export, the Measures put forward six measures: strengthen law enforcement supervision in accordance with the law, broaden the sources of clues, strengthen the coordination and linkage of law enforcement, vigorously promote the convergence of administration and criminal methods, improve the social co-governance mechanism, and establish a job security system.
VCG
On Apr 10, six places around the world released the first photo of a black hole in human history. Later it was discovered on VCG's website that the copyright of the black hole photo was marked as owned by VCG. VCG mentioned in the description of the photo that "this picture was an editorial picture, if it was to be used for commercial purposes, please call or consult the customer representative." Then it was found that the Chinese national flag and national emblem were marked as copyright owned by VCG. The Tianjin Internet Information Office immediately ordered VCG to stop transmitting relevant information and take measures to eliminate the bad influence. On Apr 18, the Tianjin Internet Information Office revealed that it had imposed a heavier fine on VCG for spreading illegal and harmful information, with a fine of 0.3 million Yuan.
Settlement between Qualcomm and Apple
On Apr 16, Qualcomm and Apple announced that they had reached a settlement agreement to remove all lawsuits around the world. Qualcomm and Apple have reached a patent licensing agreement and chip supply agreement for a period of six years with an option to extend for two years, which will take effect on Apr 1, 2019, Qualcomm said in a statement. The settlement included: Apple would pay patent license fees to Qualcomm; Apple would make a one-time payment to Qualcomm; the two sides reached a multi-year chip supply agreement; and the two sides withdrawn all lawsuits around the world, including claims involving Apple's contract manufacturers. Since the start of the "patent war" between Qualcomm and Apple in 2017, Qualcomm and Apple have filed dozens of increasingly fierce patent lawsuits worldwide. In the past few months, Apple has received two bans in China and Germany.
Tmall Copycat
The Intellectual Property Division of the Zhejiang Higher People's Court heard the case of 17 "Tmall copycat companies" registered by Zhou, rejected the appeal of the 17 companies, and upheld the original verdict. It demanded that the 17 companiess involved immediately stop infringement and eliminate impact, and compensate Alibaba Group Holdings Co., Ltd. and Zhejiang Tmall Network Co., Ltd. for economic losses of 1.5 million Yuan. The court held that the trademark of "Tmall" involved has been well known by the relevant public and can be recognized as a well-known trademark. Guangdong Tmall Food and Beverage Management Co., Ltd. highlights the use of the "Tmall" logo at its facade, constituting trademark infringement. Guangdong Tmall Food and Beverage Management Co., Ltd., its sub-companies and Zhou registered and used the word "Tmall" in company management and advertising, constituting an act of unfair competition. Taking into account such factors as the popularity of the trademark involved, the nature and circumstances of the infringement, and the reasonable costs for safeguarding rights paid by Alibaba and Tmall, the court held that the amount of compensation determined by the court of first instance was legal and reasonable, so it ordered that the appeal be rejected and the original verdict upheld.
Sword at the Internet Campaign 2019
At the 2019 China Internet Copyright Protection and Development Conference on Apr 26, the National Copyright Administration, the State Internet Information Office, the Ministry of Industry and Information Technology, and the Ministry of Public Security jointly launched "Sword at the Internet Campaign 2019" to crack down on online copyright infringement and piracy. Special rectification of copyright would be carried out in key areas such as media integration and development, cinema films, streaming media, and picture markets. This was the 15th consecutive "Sword at the Internet Campaign" special action carried out in China. This campaign would carry out the following five key rectification in six months: deepen media integration and develop copyright protection, strictly rectify online copyright of cinema, films, strengthen the key supervision of copyright of streaming media, standardize the operation order of copyright protection in the picture market, and consolidate the achievements of copyright governance in key areas of the network.
Generic Drugs
On Apr 23 and 24, AstraZeneca filed two consecutive drug patent infringement lawsuits in China, targeting generic drug companies. Some analysts believed that before the arrival of the patent cliff in 2019, domestic generic drug companies had been following up. Since China had not yet established an effective drug patent linkage system, it could be foreseen that large-scale drug patent infringement litigation would break out.
