SlideShare a Scribd company logo
1 of 40
Anti-Counterfeiting and Brand Protection
Strategies for China
September 27, 2018
Lori Meddings
Li Zhu
Introduction
1. Issues: Counterfeiting and trademark squatting;
2. Suggestions:
a) Strategize brand protection on a global level; and
b) Utilize enforcement actions in China;
3. Format: Real case studies; and
4. Goal: Food for thought.
2
Definitions (1/6)
• Intellectual Property Rights: trademarks, copyrights, patents, product designs, trade
secrets, know-hows, etc.
• Trademarks: words, names, symbols, tag lines, smells, sounds or colors used as a
source identifier in connection with goods or advertising and rendering services.
3
ALL FOR FREEDOM.
FREEDOM FOR ALL..
Definitions (2/6)
• Counterfeiting: manufacturing, distributing and selling products/providing services
using a trademark which is "identical with, or substantially indistinguishable from"
(15 U.S.C. § 1127) a mark belonging to another, and usually counterfeiters
misrepresent themselves as rightful trademark owners.
4
Definitions (3/6)
• Trademark Infringement: "any reproduction, counterfeit, copy, or colorable imitation"
of a registered trademark in connection with the sale, offering for sale, distribution, or
advertising of any goods or services on or in connection with which such use is likely to
cause confusion, or to cause mistake, or to deceive." 15 U.S.C. § 1114(1)(a)
[ NOT Applicable in China: "uses in commerce any word, term, name, symbol, or device, or any
combination thereof, or any false designation of origin, false or misleading description of fact, or false
or misleading representation of fact, which (A) is likely to cause confusion, or to cause mistake, or to
deceive... ...; (B) misrepresents...... 15 U.S.C. § 1125(a)(1) (SECTION 43 OF THE LANHAM ACT)
(protection of unregistered trademark) ]
5
Definitions (4/6)
6
Definitions (5/6)
• Trademark Squatting: intentionally applying for a mark belonging to another in a
country where the second party does not currently hold a trademark registration. It
takes advantage ("disadvantage") of the "first-to-file" trademark system in that country.
7
Definitions (6/6)
Types of Trademark Squatters and Patterns of Behavior:
1) Counterfeiters: profit through producing and selling products/rendering services
using famous brand names belonging to another.
2) Extortionists: motivated to make money – get in and get out, by:
selling back to brand owners or their competitors at an astronomical price; or
collecting license fees.
3) Business partners: often suppliers, distributors, and joint ventures, which profit
through "kidnapping" brand owners for leveraging rights to strong-arm brand owners
into business partnership or to continue business partnership.
8
Counterfeiting - Overview
• Counterfeiting and the Role of China;
• Strategies for Planning Anti-counterfeiting Actions; and
• Enforcement Actions Available in China.
9
Accident of Partnair Flight 394
10
Major Recall of Heparin in 2008
11
2008 Milk Scandal in China
12
Why Take Anti-Counterfeiting Actions?
• Counterfeits impact the bottom line:
Reduced sales;
Increase in product liability disputes and commercial litigation; and
Negative impact on company and global brand reputation.
• Provide support to business teams and business partners;
• Build up confidence of consumers/customers and business partners;
• Reduce the risks and costs of product liability disputes and commercial litigation;
• Offset some costs associated with brand protection actions; and
• Corporate Social Responsibility (CSR).
EUIPO's Webinar on Corporate Social Responsibility in The Fight against Counterfeiting and Piracy
(https://euipo.europa.eu/knowledge/mod/scorm/player.php?a=1977&currentorg=&scoid=6017&sesskey=CrAozfiECv&display=popup&mode=normal ) 13
The Role of China in Global Counterfeiting
"Overall in 2015, China and Hong Kong together were the provenance of
86 % of global counterfeiting and USD 396.5 billion worth of counterfeit
goods and in combination, they form the largest ongoing threat to global IPR
integrity. "
According to "2017 Situation Report on Counterfeiting and Piracy in the European Union" issued by Europol and the European Union Intellectual
Property Office, full report available here: https://www.europol.europa.eu/publications-documents/2017-situation-report-counterfeiting-and-piracy-in-
european-union
14
15
Trademark Enforcement by China Customs in 2017
According to China Customs' annual report in 2017, the percentage of seized goods by category [by
quantity]:
 Machine/equipment/automation/tools and parts: 25.56%;
 Tobacco: 25.25%;
 Cosmetics and Personal Care: 10.12%;
 Other Industrial Goods:3.09%;
 Shoes:4.91%.
• All Others: 23.79%
NOTE:
1. China Customs only has the ability to inspect
around 15% of all exported goods;
2. Seizure actions increased by 12.8% in 2017, which
was 22,000 cases in total;
3. Total value of seized goods: RMB 141.9 million
(around $ 20.65million);
4. Channels of Seized Goods: Cargo: 94.92% by sea
(quantity of goods);
5. Counterfeit machine/equipment/automation/tools
and parts have increased by 348% in 2017.
16
Trademark Enforcement by U.S. Customs in 2017
According to the annual report from the U.S. Customs and Border Protection in 2017, the percentage of
seized goods by category [by quantity]:
• Cosmetics and Personal Care: 34%;
• Sunglasses: 31%;
• Consumer Electronics: 6%;
• Critical Components: 6%;
• Pharmaceuticals: 4%;
• Sporting Goods: 4%;
• Automotive/Aerospace: 3%;
• Lights/Lamps: 2%
• Perfumes:2%;
• All others: 8%.
NOTE:
1. China Customs only has the
ability to inspect around 15%
of all exported goods;
2. Seizure actions increased by
12% in 2017, which was 34,143
cases in total;
3. Total value of seized goods:
$1,206. 38 million;
4. Channels of Seized Goods:
Express: 60%
Mail: 29%
Cargo: 8%.
Are You A Victim and What Is Your Plan?
• Conduct a audit of unauthorized trademark applications and use to determine nature
and scope of problems:
• Review your trademark rights in China and other key and emerging markets;
• Set up goals and strategic priorities for a certain period of time; and
• Budget and plan for enforcement actions at a global level.
17
Case Study 1: Cross-border Protection of Trade Dress
18
Argentina China
2013 1. Equipment that infringed trade dress
flooded into the market.
2. Trade dress mark registered and
recorded with Argentina Customs.
1. Large suppliers of infringing equipment were found in
Argentina and identified as from China.
2. Trade dress mark pending.
3. China was not yet an important market.
2014 1. Infringing equipment detained by
Argentina Customs.
2. Preparation for civil actions and
permanent orders to stop importation
of infringing goods.
1. Trade dress mark registered but lack prior cases of
enforcement.
2. China was not yet an important market.
2015
-
2016
1. Civil actions filed and pending.
2. Continue to pressure
wholesalers/importers through customs
seizures.
1. China courts concluded a milestone civil litigation on trade
dress protection [judgements in China are generally not
binding precedents].
2. China was not yet an important market.
2017
-
2018
1. Favorable judgements issued.
2. Large wholesalers stopped importing
infringing equipment.
1. Business strategy prioritized Chinese market.
2. C&D letter: 9 out of 10 targets cooperated;
3. Successfully took down several hundred links of listings of
infringing equipment from various Alibaba's websites.
Case Study 2: If No Rights in China
• Client received a customer complaint about consistency of products sold in Taiwan and
discovered counterfeits;
• We helped the client to identify counterfeiter and uncovered counterfeiter had
obtained trademark registration through squatting;
• After analyzing client's business strategy and IP right portfolio, we advised against
enforcing against counterfeiter/squatter in China;
• Actions:
strengthening trademark rights in key markets, e.g., South American countries; and
taking actions to cut off distribution channels, i.e., in Hong Kong.
19
What's Inside The Box-
Anti-Counterfeiting Actions in China
• Cease & Desist Letter
• Take-down Online Listings of Suspect Counterfeits
• Administrative Raids
• Civil Litigation
• Customs Detainment/Seizure
• Criminal Prosecution
20
NOTE: They may look similar to enforcement
actions in the U.S., but can be vastly different!
Administrative Actions vs. Civil Litigation
21
Administrative Actions Civil Litigation
Authorities 1. Intellectual Property Offices (IPOs) /Administration for
Industry and Commerce (AICs) (based on trademark
infringement)
2. Quality and Technical Supervision Bureaus (QTSBs)
(based on inferior quality of counterfeits)
1. Intellectual Property Courts
2. IP Chambers of Courts
3. Civil Chambers of Courts
Actions 1. Inspect and raid factories, stores and trade shows;
2. Seize and confiscate counterfeits/infringing goods and
manufacture equipment;
Adjudicate on IP disputes
Enforcement of judgement
Powers 1. Impose injunctions;
2. Suspend business operation;
3. Impose fines.
*NO monetary damage awarded to brand owners.
1. Preliminary injunction (rare);
2. Permanent injunction;
3. Confiscation of all infringing goods and equipment;
4. Order to apologize;
5. Damages (punitive damages are usually not supported).
Timeline Raid Action: 2 days to 1 week
Penalty Decision: 6 months to 1 year
12-24 months for the first instance
12-24 months for appeal
6-12 months for enforcement
Costs $5,000-8,000
(plus $3,000 -5,000 for preliminary investigation)
Costs: $ 50,000 – 80,000 covering 1st instance and appeal
$8,000-10,000 for enforcement
(plus additional costs and bonds for preliminary investigation;
preservation of evidence; preservation of assets; preliminary injunction)
No. of Cases 26,985 in 2017 3,441 in 2017
Customs Actions Focusing on Training
• Trademark Registration and Recordation are Musts;
• Educational materials and trainings are Essential:
37,236 trademarks have been registered with China Customs;
Large amount of exported goods and short period of inspection (1.5 hours per shipment); and
Help field officers to get familiar with your brands and products.
22
Discrepancy of Customs Seizures
China (Export) U.S. (Import) E.U. (Import)
Machinery, automation, equipment and
parts: 25.56%
Cosmetics and Personal Care:
34%
Tobacco: 24%
Tobacco: 25.25% Sunglasses: 31% Toys: 17%
Cosmetics and Personal Care: 10.12% Consumer Electronics: 6% Foodstuff: 13%
23
China (Export) U.S. (Import) E.U. (Import)
94.92% in Cargo by Sea 8% in Cargo 67.03% in Cargo by Sea
China (Export) U.S. (Import) E.U. (Import)
Ex Officio: 99.78%
By Application: 0.02%
Data Not Available Ex Officio: 2%
By Application: 98%
1. Top 3 Categories of Seized Goods
2. Seized Goods Transported Through Cargo
3. Percentage Ex Officio and By Application actions
Take-Away for Anti-Counterfeiting
24
Conduct an audit to confirm if counterfeiting is a problem for business.
Register trademarks and record with China Customs if needed.
Strategize anti-counterfeiting actions based on business goals and budget.
Understand difference of enforcement actions in China.
Focus enforcement actions in key markets.
Consider administrative actions before civil litigation in China.
Customs actions: be responsive, train and global focus.
Trademark Squatting - Overview
• First-to-File and Broad Coverage
- Case Study 3: Full Blown Fight Against Counterfeiter
• Chinese Character Marks
- Case Study 4: Battle over Chinese House Mark
25
Avoid Squatting: First-to-File and Broad Coverage
• First-to-file = race to file to obtain priority;
• New marks should be treated as confidential prior to filings on a global scale;
• File for all related goods and services, including in different classes, expanding coverage
as broad as possible;
• Evidence of use and intent to use are not required for registration;
• Use of an unregistered or pending mark can put the mark under great risk of trademark
squatting;
• Use of registered marks out of the scope of registration raise risks of trademark squatting
of unregistered goods and services.
26
Case Study 3: Full Blown Fight Against Counterfeiter
Client registered
Chinese house
mark on hair
clippers in Class 8.
Squatter filed Client's
Chinese mark on shearing
machines in Class 7 and
started producing
counterfeits using both
English and Chinese house
marks.
Client filed
opposition against
Squatter's mark
but lost three
rounds of appeals.
Squatter received
registration
certificate issued by
mistake and took
enforcement actions
against Client.
27
Hair Clippers under China's Subclass System
28
Actions (1/2) - Defense
Protecting Client's business from interruption-
• Obtained an invalidation of the wrongfully issued trademark registration certificate;
• Persuaded administrative authorities to refuse Squatter's "enforcement" requests based
on the invalidation;
• Provided training to business partners in responding to Squatter's harassment; and
• Arranged for a point of contact for legal support in case of Squatters' harassment actions.
29
Actions (2/2) - Attack
Forcing Squatter to stop counterfeiting and unfair competition-
• Successfully obtained a re-trial for opposition before People's Supreme Court (SPC), the
highest court of China: only 12% of cases petitioned to SPC are granted with re-trial every
year;
• Conducted a successful administrative raid at a trade show while opposition was pending;
• Conducted several rounds of evidence preservation and file a civil litigation based on
trademark infringement and unfair competition;
• Negotiated with trade show organizers to curb Squatter's requests for exhibiting
counterfeits; and
• Suggested to record registrations with China Customs to detain export counterfeits
exported to India.
30
Avoid Squatting: Chinese Character Mark
31
• Necessary whenever a mark is difficult for target consumers in China to pronounce
and memorize.
 Language barriers; and
 Risks of letting third parties choosing Chinese mark for brand owners.
• Benefits to Proactively Adopting and Protecting a Chinese Character Mark:
 Ensure marketing value of the mark; and
 Avoid high risks of trademark squatting.
Chinese Character Mark
32
Nailed It!
33
赛百味
Sound: Sai Bai Wei
Meaning: Superior to hundreds of flavors
可口可乐
Sound: Ke Kou Ke Le
Meaning: Tasteful and joyful
Case Study 4: Battle over Chinese House Mark
Client's medicated
lip balms are sold in
China under a
Chinese mark used
by a distributor.
Squatter registered
Client's Chinese mark on
lip balms in Class 3,
produced counterfeits
and aggressively enforced
against Client.
Client negotiated
a new distributor
and the Chinese
mark in question
was valuable and
crucial.
Squatter asked for
an astronomic price
for selling the mark.
34
Actions (1/2)
• Searched for an alternative route for registration and identified two items in class 5;
• Ensure Client can sell relevant medicated balms in Class 5 without fulfilling additional
legal obligations in mainland China;
• Filed Client's Chinese house mark in class 5 on -
Lip balms for medical purposes, modified from standard item "balms for medical
purposes"
Lip ointments for pharmaceutical purposes, modified from standard item "ointments
for pharmaceutical purposes".
35
Actions (2/2)
• Successfully persuaded China Trademark Office to accept the modified goods;
• Successfully obtained registrations for Client's Chinese house mark in Class 5, which
serves as defense against Squatter's harassment; and
• Proposed several strategies to neutralize Squatter's registration.
36
Evaluate Impact of Trademark Squatting On A Global Level
To decide whether and how to tackle a trademark squatter in China, consider the
following elements:
• Whether China is or will be a market;
• How important the mark in questions is, e.g., house mark, Chinese mark, or secondary
mark;
• Whether consumers in other key markets will be confused;
• Whether it is possible to re-brand and what is the cost;
• Whether the Trademark Squatter is an extortionist or counterfeiter; and
• Whether export of counterfeits from other counterfeiters becomes a serious issue
(Note: a trademark registration is required to request China Customs to detain
counterfeits).
37
Take-Away For Avoiding Trademark Squatting
• Don't walk, run to file!
• Ensure the broadest coverage for trademark applications in China.
• Consider adopting a Chinese character mark if doing business in Chinese speaking
areas.
• Be creative in defending from and enforcing against trademark squatters.
• Trademark squatters may become competitors if not careful!
38
Think Ahead of The Game
39
Anti-counterfeiting and brand protection is not a sprint, but a marathon.
Take Proactive Measures to Protect Goodwill and Integrity of Your Brand:
 Audit and file gap-filling trademark applications in key countries every 5 years;
 Record trademark registrations with customs in key countries;
 Trademark global watch;
 Domain global watch;
 Routine Monitoring of social media and online marketplaces;
 Routine due diligence and compliance check of business partners;
 Timely communicate with possible infringer to prevent development of infringement;
 Work with marketing team to educate business and the public to respect your trademark rights;
and
 Join industrial organizations to keep up with latest news of counterfeits and anti-counterfeiting
efforts.
Thank you!
40
© 2018 Quarles & Brady LLP - This document provides information of a general nature. None of the information contained
herein is intended as legal advice or opinion relative to specific matters, facts, situations or issues. Additional facts and
information or future developments may affect the subjects addressed in this document. You should consult with a lawyer about
your particular circumstances before acting on any of this information because it may not be applicable to you or your situation.
Lori S. Meddings / Partner
Lori.Meddings@quarles.com
Quarles & Brady LLP
33 East Main Street, Madison, WI 53703-3095
Office 608-283-2653 / Cell 608-630-1623
Li Zhu / Attorney
Li.Zhu@quarles.com
Quarles & Brady LLP
411 East Wisconsin Avenue, Milwaukee, WI 53202-4426
Office 414-277-5143 / Cell 650-862-4600

More Related Content

What's hot

non conventional trademarks
non conventional trademarksnon conventional trademarks
non conventional trademarks
Priya Anuragini
 
International trade mark law & copy right law
International trade mark law & copy right lawInternational trade mark law & copy right law
International trade mark law & copy right law
Rajalingam Balakrishnan
 

What's hot (20)

Data Integrity
Data IntegrityData Integrity
Data Integrity
 
Licensing Agreement Terms
Licensing Agreement TermsLicensing Agreement Terms
Licensing Agreement Terms
 
Procedure For Registration Of Trademark In India
Procedure For Registration Of Trademark In IndiaProcedure For Registration Of Trademark In India
Procedure For Registration Of Trademark In India
 
1 documents & Requirements
1 documents & Requirements1 documents & Requirements
1 documents & Requirements
 
GMPs History And The 2008 Revisions
GMPs   History And The 2008 RevisionsGMPs   History And The 2008 Revisions
GMPs History And The 2008 Revisions
 
FORGERY.ppt
FORGERY.pptFORGERY.ppt
FORGERY.ppt
 
Prior art search
Prior art searchPrior art search
Prior art search
 
scope_and_nature_of_questioned_documents.ppt
scope_and_nature_of_questioned_documents.pptscope_and_nature_of_questioned_documents.ppt
scope_and_nature_of_questioned_documents.ppt
 
non conventional trademarks
non conventional trademarksnon conventional trademarks
non conventional trademarks
 
Patent agents.pptx
Patent agents.pptxPatent agents.pptx
Patent agents.pptx
 
General requirements for the competence of testing and calibration laboratories
General requirements for the competence of testing and calibration laboratories General requirements for the competence of testing and calibration laboratories
General requirements for the competence of testing and calibration laboratories
 
International trade mark law & copy right law
International trade mark law & copy right lawInternational trade mark law & copy right law
International trade mark law & copy right law
 
특허심판 실무
특허심판 실무특허심판 실무
특허심판 실무
 
European and US Patent Law
European and US Patent LawEuropean and US Patent Law
European and US Patent Law
 
SKULL RECONSTRUCTION
SKULL RECONSTRUCTIONSKULL RECONSTRUCTION
SKULL RECONSTRUCTION
 
Principles of fingerprints
Principles of fingerprintsPrinciples of fingerprints
Principles of fingerprints
 
Intellectual property-Trademark
Intellectual property-TrademarkIntellectual property-Trademark
Intellectual property-Trademark
 
Needle free injection-ppt
Needle free injection-pptNeedle free injection-ppt
Needle free injection-ppt
 
Arson and investigation.pptx
Arson and investigation.pptxArson and investigation.pptx
Arson and investigation.pptx
 
Non-Conventional Trademarks in India
Non-Conventional Trademarks in IndiaNon-Conventional Trademarks in India
Non-Conventional Trademarks in India
 

Similar to Anti-Counterfeiting and Brand Protection Strategies for China

Enforcement of Trademarks and Copyrights in Thailand and Myanmar
Enforcement of Trademarks and Copyrights in Thailand and MyanmarEnforcement of Trademarks and Copyrights in Thailand and Myanmar
Enforcement of Trademarks and Copyrights in Thailand and Myanmar
LawPlus Ltd.
 
PPT on Counterfeit (2)
PPT on Counterfeit (2)PPT on Counterfeit (2)
PPT on Counterfeit (2)
sahil sharma
 
Trademark Training
Trademark TrainingTrademark Training
Trademark Training
Luljeta
 
Microsoft power point comparative study of the main features of unfair comp...
Microsoft power point   comparative study of the main features of unfair comp...Microsoft power point   comparative study of the main features of unfair comp...
Microsoft power point comparative study of the main features of unfair comp...
sanjeev kumar chaswal
 
wipo_smes_tlv_05_www_54894.ppt
wipo_smes_tlv_05_www_54894.pptwipo_smes_tlv_05_www_54894.ppt
wipo_smes_tlv_05_www_54894.ppt
ssuserc656bb
 
421 W10 Web Ch9 17x15 Slides031110
421 W10 Web Ch9 17x15 Slides031110421 W10 Web Ch9 17x15 Slides031110
421 W10 Web Ch9 17x15 Slides031110
capem
 
BASCAP - Illicit trade & excise
BASCAP - Illicit trade & excise BASCAP - Illicit trade & excise
BASCAP - Illicit trade & excise
illegalehandel
 
How to Fight Product Counterfeiting with Investigative Strategies and Tactics
How to Fight Product Counterfeiting with Investigative Strategies and TacticsHow to Fight Product Counterfeiting with Investigative Strategies and Tactics
How to Fight Product Counterfeiting with Investigative Strategies and Tactics
IntelCollab.com
 

Similar to Anti-Counterfeiting and Brand Protection Strategies for China (20)

Untitled
UntitledUntitled
Untitled
 
Enforcement of Trademarks and Copyrights in Thailand and Myanmar
Enforcement of Trademarks and Copyrights in Thailand and MyanmarEnforcement of Trademarks and Copyrights in Thailand and Myanmar
Enforcement of Trademarks and Copyrights in Thailand and Myanmar
 
17152 toc project
17152 toc project17152 toc project
17152 toc project
 
PPT on Counterfeit (2)
PPT on Counterfeit (2)PPT on Counterfeit (2)
PPT on Counterfeit (2)
 
Trademark Training
Trademark TrainingTrademark Training
Trademark Training
 
Microsoft power point comparative study of the main features of unfair comp...
Microsoft power point   comparative study of the main features of unfair comp...Microsoft power point   comparative study of the main features of unfair comp...
Microsoft power point comparative study of the main features of unfair comp...
 
Discussion of the changes in the fourth revision to the Chinese patent law
Discussion of the changes in the fourth revision to the Chinese patent lawDiscussion of the changes in the fourth revision to the Chinese patent law
Discussion of the changes in the fourth revision to the Chinese patent law
 
wipo_smes_tlv_05_www_54894.ppt
wipo_smes_tlv_05_www_54894.pptwipo_smes_tlv_05_www_54894.ppt
wipo_smes_tlv_05_www_54894.ppt
 
421 W10 Web Ch9 17x15 Slides031110
421 W10 Web Ch9 17x15 Slides031110421 W10 Web Ch9 17x15 Slides031110
421 W10 Web Ch9 17x15 Slides031110
 
BASCAP - Illicit trade & excise
BASCAP - Illicit trade & excise BASCAP - Illicit trade & excise
BASCAP - Illicit trade & excise
 
TOC PROJECT
TOC PROJECTTOC PROJECT
TOC PROJECT
 
Ipctoolkit shared by absoluteproducers
Ipctoolkit shared by absoluteproducersIpctoolkit shared by absoluteproducers
Ipctoolkit shared by absoluteproducers
 
Protecting Intellectual Property in China
Protecting Intellectual Property in ChinaProtecting Intellectual Property in China
Protecting Intellectual Property in China
 
UNODC: Doing Business in Myanmar Without Bribery
UNODC: Doing Business in Myanmar Without BriberyUNODC: Doing Business in Myanmar Without Bribery
UNODC: Doing Business in Myanmar Without Bribery
 
Where is China Going in IP?
Where is China Going in IP?Where is China Going in IP?
Where is China Going in IP?
 
UK Export Controls: Taking a Strategic Approach
UK Export Controls: Taking a Strategic ApproachUK Export Controls: Taking a Strategic Approach
UK Export Controls: Taking a Strategic Approach
 
HD Update 6 – Focus on Trademarks
HD Update 6 – Focus on Trademarks HD Update 6 – Focus on Trademarks
HD Update 6 – Focus on Trademarks
 
HD Update 6- Focus on Trademarks
HD Update 6- Focus on TrademarksHD Update 6- Focus on Trademarks
HD Update 6- Focus on Trademarks
 
How to Fight Product Counterfeiting with Investigative Strategies and Tactics
How to Fight Product Counterfeiting with Investigative Strategies and TacticsHow to Fight Product Counterfeiting with Investigative Strategies and Tactics
How to Fight Product Counterfeiting with Investigative Strategies and Tactics
 
Lgp Asia Enforcement Leave Behind Sept 09
Lgp Asia Enforcement Leave Behind Sept 09Lgp Asia Enforcement Leave Behind Sept 09
Lgp Asia Enforcement Leave Behind Sept 09
 

More from Quarles & Brady

Key Bankruptcy Considerations Heading into a Recession
Key Bankruptcy Considerations Heading into a RecessionKey Bankruptcy Considerations Heading into a Recession
Key Bankruptcy Considerations Heading into a Recession
Quarles & Brady
 
Emerging Trends in Commercial Mortgage Lending During COVID-19
Emerging Trends in Commercial Mortgage Lending During COVID-19Emerging Trends in Commercial Mortgage Lending During COVID-19
Emerging Trends in Commercial Mortgage Lending During COVID-19
Quarles & Brady
 

More from Quarles & Brady (20)

Protecting Designs Without Design Patents
Protecting Designs Without Design PatentsProtecting Designs Without Design Patents
Protecting Designs Without Design Patents
 
2020 Wisconsin Insurance Case Law Year in Review
2020 Wisconsin Insurance Case Law Year in Review2020 Wisconsin Insurance Case Law Year in Review
2020 Wisconsin Insurance Case Law Year in Review
 
Interest Rate Swaps for Borrower’s Counsel
Interest Rate Swaps for Borrower’s CounselInterest Rate Swaps for Borrower’s Counsel
Interest Rate Swaps for Borrower’s Counsel
 
2016 Year in Review: Recent Midwest Legal Decisions Impacting Real Estate and...
2016 Year in Review: Recent Midwest Legal Decisions Impacting Real Estate and...2016 Year in Review: Recent Midwest Legal Decisions Impacting Real Estate and...
2016 Year in Review: Recent Midwest Legal Decisions Impacting Real Estate and...
 
Key Bankruptcy Considerations Heading into a Recession
Key Bankruptcy Considerations Heading into a RecessionKey Bankruptcy Considerations Heading into a Recession
Key Bankruptcy Considerations Heading into a Recession
 
Key Bankruptcy Considerations Heading into a Recession
Key Bankruptcy Considerations Heading into a RecessionKey Bankruptcy Considerations Heading into a Recession
Key Bankruptcy Considerations Heading into a Recession
 
Emerging Trends in Commercial Mortgage Lending During COVID-19
Emerging Trends in Commercial Mortgage Lending During COVID-19Emerging Trends in Commercial Mortgage Lending During COVID-19
Emerging Trends in Commercial Mortgage Lending During COVID-19
 
Action Steps for Your Employee Benefits Plan During the Coronavirus Pandemic
Action Steps for Your Employee Benefits Plan During the Coronavirus PandemicAction Steps for Your Employee Benefits Plan During the Coronavirus Pandemic
Action Steps for Your Employee Benefits Plan During the Coronavirus Pandemic
 
Coronavirus & COVID-19 Update
Coronavirus & COVID-19 UpdateCoronavirus & COVID-19 Update
Coronavirus & COVID-19 Update
 
The Tampa Office Celebrates 10 Years!
The Tampa Office Celebrates 10 Years!The Tampa Office Celebrates 10 Years!
The Tampa Office Celebrates 10 Years!
 
Guidance for Employers During the Evolving COVID-19 Pandemic
Guidance for Employers During the Evolving COVID-19 PandemicGuidance for Employers During the Evolving COVID-19 Pandemic
Guidance for Employers During the Evolving COVID-19 Pandemic
 
Guidance for Employers During the Evolving COVID-19 Pandemic
Guidance for Employers During the Evolving COVID-19 PandemicGuidance for Employers During the Evolving COVID-19 Pandemic
Guidance for Employers During the Evolving COVID-19 Pandemic
 
Business Law Training: Market Turmoil in D&O Insurance and Is Your Company Pr...
Business Law Training: Market Turmoil in D&O Insurance and Is Your Company Pr...Business Law Training: Market Turmoil in D&O Insurance and Is Your Company Pr...
Business Law Training: Market Turmoil in D&O Insurance and Is Your Company Pr...
 
A Practical Roadmap For Navigating Medical Staff Legal Nightmares In Current ...
A Practical Roadmap For Navigating Medical Staff Legal Nightmares In Current ...A Practical Roadmap For Navigating Medical Staff Legal Nightmares In Current ...
A Practical Roadmap For Navigating Medical Staff Legal Nightmares In Current ...
 
Medical Staff Structure And Bylaws: Current Trends And Best Practices
Medical Staff Structure And Bylaws: Current Trends And Best PracticesMedical Staff Structure And Bylaws: Current Trends And Best Practices
Medical Staff Structure And Bylaws: Current Trends And Best Practices
 
Current Cases: Medical Staff Nightmares And Fairy Tales
Current Cases: Medical Staff Nightmares And Fairy TalesCurrent Cases: Medical Staff Nightmares And Fairy Tales
Current Cases: Medical Staff Nightmares And Fairy Tales
 
Employment and Telemedicine Arrangements Between Hospitals and Practitioners:...
Employment and Telemedicine Arrangements Between Hospitals and Practitioners:...Employment and Telemedicine Arrangements Between Hospitals and Practitioners:...
Employment and Telemedicine Arrangements Between Hospitals and Practitioners:...
 
Physician Employment and Medical Staff Matters - Fun Times For HR Directors!
Physician Employment and Medical Staff Matters - Fun Times For HR Directors!Physician Employment and Medical Staff Matters - Fun Times For HR Directors!
Physician Employment and Medical Staff Matters - Fun Times For HR Directors!
 
Understand the SECURE Act, the Repeal of the “Cadillac Tax” and Other Health ...
Understand the SECURE Act, the Repeal of the “Cadillac Tax” and Other Health ...Understand the SECURE Act, the Repeal of the “Cadillac Tax” and Other Health ...
Understand the SECURE Act, the Repeal of the “Cadillac Tax” and Other Health ...
 
Business Law Training: What’s Around the Corner? Eight Things We’re Watching ...
Business Law Training: What’s Around the Corner? Eight Things We’re Watching ...Business Law Training: What’s Around the Corner? Eight Things We’re Watching ...
Business Law Training: What’s Around the Corner? Eight Things We’re Watching ...
 

Recently uploaded

Termination of Employees under the Labor Code.pptx
Termination of Employees under the Labor Code.pptxTermination of Employees under the Labor Code.pptx
Termination of Employees under the Labor Code.pptx
BrV
 
Crime Detection/Prevention and Narco-Analysis Test
Crime Detection/Prevention and Narco-Analysis TestCrime Detection/Prevention and Narco-Analysis Test
Crime Detection/Prevention and Narco-Analysis Test
AJAYPRATAPSINGHTOMAR2
 

Recently uploaded (20)

Does Apple Neurotechnology Patents Go To Far?
Does Apple  Neurotechnology Patents Go To Far?Does Apple  Neurotechnology Patents Go To Far?
Does Apple Neurotechnology Patents Go To Far?
 
dandan liu need to rot when she dies..pdf
dandan liu need to rot when she dies..pdfdandan liu need to rot when she dies..pdf
dandan liu need to rot when she dies..pdf
 
FAMILY LAW - Legacy Semester II .pptx
FAMILY    LAW - Legacy Semester II .pptxFAMILY    LAW - Legacy Semester II .pptx
FAMILY LAW - Legacy Semester II .pptx
 
Justice Advocates Legal Defence Firm
Justice Advocates Legal Defence FirmJustice Advocates Legal Defence Firm
Justice Advocates Legal Defence Firm
 
Asif_Sultan_Syeda_vs_UT_of_J_K.pdf op[ke[k
Asif_Sultan_Syeda_vs_UT_of_J_K.pdf op[ke[kAsif_Sultan_Syeda_vs_UT_of_J_K.pdf op[ke[k
Asif_Sultan_Syeda_vs_UT_of_J_K.pdf op[ke[k
 
IRDA role in Insurance sector in India .pptx
IRDA role in Insurance sector in India .pptxIRDA role in Insurance sector in India .pptx
IRDA role in Insurance sector in India .pptx
 
How Can an Attorney Help With My Car Accident Claim?
How Can an Attorney Help With My Car Accident Claim?How Can an Attorney Help With My Car Accident Claim?
How Can an Attorney Help With My Car Accident Claim?
 
File Taxes Online Simple Steps for Efficient Filing.pdf
File Taxes Online Simple Steps for Efficient Filing.pdfFile Taxes Online Simple Steps for Efficient Filing.pdf
File Taxes Online Simple Steps for Efficient Filing.pdf
 
How to Protect Your Children During a Divorce?
How to Protect Your Children During a Divorce?How to Protect Your Children During a Divorce?
How to Protect Your Children During a Divorce?
 
(Hamad khadam ) ENGLISH LEGAL 2.0.docx
(Hamad khadam )   ENGLISH LEGAL 2.0.docx(Hamad khadam )   ENGLISH LEGAL 2.0.docx
(Hamad khadam ) ENGLISH LEGAL 2.0.docx
 
Termination of Employees under the Labor Code.pptx
Termination of Employees under the Labor Code.pptxTermination of Employees under the Labor Code.pptx
Termination of Employees under the Labor Code.pptx
 
Crime Detection/Prevention and Narco-Analysis Test
Crime Detection/Prevention and Narco-Analysis TestCrime Detection/Prevention and Narco-Analysis Test
Crime Detection/Prevention and Narco-Analysis Test
 
Indian Partnership Act 1932, Rights and Duties of Partners
Indian Partnership Act 1932, Rights and Duties of PartnersIndian Partnership Act 1932, Rights and Duties of Partners
Indian Partnership Act 1932, Rights and Duties of Partners
 
Mergers and Acquisitions in Kenya - An explanation
Mergers and Acquisitions in Kenya - An explanationMergers and Acquisitions in Kenya - An explanation
Mergers and Acquisitions in Kenya - An explanation
 
REVIVING OUR STAR GOD IMAGES FROM MARRYING OUR 4 HOLY LAWS OF STAR GODS
REVIVING OUR STAR GOD IMAGES FROM MARRYING OUR 4 HOLY LAWS OF STAR GODSREVIVING OUR STAR GOD IMAGES FROM MARRYING OUR 4 HOLY LAWS OF STAR GODS
REVIVING OUR STAR GOD IMAGES FROM MARRYING OUR 4 HOLY LAWS OF STAR GODS
 
Dabholkar-matter-Judgement-1.pdfrefp;sdPp;
Dabholkar-matter-Judgement-1.pdfrefp;sdPp;Dabholkar-matter-Judgement-1.pdfrefp;sdPp;
Dabholkar-matter-Judgement-1.pdfrefp;sdPp;
 
Streamline Legal Operations: A Guide to Paralegal Services
Streamline Legal Operations: A Guide to Paralegal ServicesStreamline Legal Operations: A Guide to Paralegal Services
Streamline Legal Operations: A Guide to Paralegal Services
 
Embed-6 (1).pdfc p;p;kdk[odk[drskpokpopo
Embed-6 (1).pdfc p;p;kdk[odk[drskpokpopoEmbed-6 (1).pdfc p;p;kdk[odk[drskpokpopo
Embed-6 (1).pdfc p;p;kdk[odk[drskpokpopo
 
Embed-3-2.pdfkp[k[odk[odk[d[ok[d[pkdkdkl
Embed-3-2.pdfkp[k[odk[odk[d[ok[d[pkdkdklEmbed-3-2.pdfkp[k[odk[odk[d[ok[d[pkdkdkl
Embed-3-2.pdfkp[k[odk[odk[d[ok[d[pkdkdkl
 
Embed-2-2.pdf[[app[r[prf[-rk;lme;[ed[prp[
Embed-2-2.pdf[[app[r[prf[-rk;lme;[ed[prp[Embed-2-2.pdf[[app[r[prf[-rk;lme;[ed[prp[
Embed-2-2.pdf[[app[r[prf[-rk;lme;[ed[prp[
 

Anti-Counterfeiting and Brand Protection Strategies for China

  • 1. Anti-Counterfeiting and Brand Protection Strategies for China September 27, 2018 Lori Meddings Li Zhu
  • 2. Introduction 1. Issues: Counterfeiting and trademark squatting; 2. Suggestions: a) Strategize brand protection on a global level; and b) Utilize enforcement actions in China; 3. Format: Real case studies; and 4. Goal: Food for thought. 2
  • 3. Definitions (1/6) • Intellectual Property Rights: trademarks, copyrights, patents, product designs, trade secrets, know-hows, etc. • Trademarks: words, names, symbols, tag lines, smells, sounds or colors used as a source identifier in connection with goods or advertising and rendering services. 3 ALL FOR FREEDOM. FREEDOM FOR ALL..
  • 4. Definitions (2/6) • Counterfeiting: manufacturing, distributing and selling products/providing services using a trademark which is "identical with, or substantially indistinguishable from" (15 U.S.C. § 1127) a mark belonging to another, and usually counterfeiters misrepresent themselves as rightful trademark owners. 4
  • 5. Definitions (3/6) • Trademark Infringement: "any reproduction, counterfeit, copy, or colorable imitation" of a registered trademark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive." 15 U.S.C. § 1114(1)(a) [ NOT Applicable in China: "uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which (A) is likely to cause confusion, or to cause mistake, or to deceive... ...; (B) misrepresents...... 15 U.S.C. § 1125(a)(1) (SECTION 43 OF THE LANHAM ACT) (protection of unregistered trademark) ] 5
  • 7. Definitions (5/6) • Trademark Squatting: intentionally applying for a mark belonging to another in a country where the second party does not currently hold a trademark registration. It takes advantage ("disadvantage") of the "first-to-file" trademark system in that country. 7
  • 8. Definitions (6/6) Types of Trademark Squatters and Patterns of Behavior: 1) Counterfeiters: profit through producing and selling products/rendering services using famous brand names belonging to another. 2) Extortionists: motivated to make money – get in and get out, by: selling back to brand owners or their competitors at an astronomical price; or collecting license fees. 3) Business partners: often suppliers, distributors, and joint ventures, which profit through "kidnapping" brand owners for leveraging rights to strong-arm brand owners into business partnership or to continue business partnership. 8
  • 9. Counterfeiting - Overview • Counterfeiting and the Role of China; • Strategies for Planning Anti-counterfeiting Actions; and • Enforcement Actions Available in China. 9
  • 10. Accident of Partnair Flight 394 10
  • 11. Major Recall of Heparin in 2008 11
  • 12. 2008 Milk Scandal in China 12
  • 13. Why Take Anti-Counterfeiting Actions? • Counterfeits impact the bottom line: Reduced sales; Increase in product liability disputes and commercial litigation; and Negative impact on company and global brand reputation. • Provide support to business teams and business partners; • Build up confidence of consumers/customers and business partners; • Reduce the risks and costs of product liability disputes and commercial litigation; • Offset some costs associated with brand protection actions; and • Corporate Social Responsibility (CSR). EUIPO's Webinar on Corporate Social Responsibility in The Fight against Counterfeiting and Piracy (https://euipo.europa.eu/knowledge/mod/scorm/player.php?a=1977&currentorg=&scoid=6017&sesskey=CrAozfiECv&display=popup&mode=normal ) 13
  • 14. The Role of China in Global Counterfeiting "Overall in 2015, China and Hong Kong together were the provenance of 86 % of global counterfeiting and USD 396.5 billion worth of counterfeit goods and in combination, they form the largest ongoing threat to global IPR integrity. " According to "2017 Situation Report on Counterfeiting and Piracy in the European Union" issued by Europol and the European Union Intellectual Property Office, full report available here: https://www.europol.europa.eu/publications-documents/2017-situation-report-counterfeiting-and-piracy-in- european-union 14
  • 15. 15 Trademark Enforcement by China Customs in 2017 According to China Customs' annual report in 2017, the percentage of seized goods by category [by quantity]:  Machine/equipment/automation/tools and parts: 25.56%;  Tobacco: 25.25%;  Cosmetics and Personal Care: 10.12%;  Other Industrial Goods:3.09%;  Shoes:4.91%. • All Others: 23.79% NOTE: 1. China Customs only has the ability to inspect around 15% of all exported goods; 2. Seizure actions increased by 12.8% in 2017, which was 22,000 cases in total; 3. Total value of seized goods: RMB 141.9 million (around $ 20.65million); 4. Channels of Seized Goods: Cargo: 94.92% by sea (quantity of goods); 5. Counterfeit machine/equipment/automation/tools and parts have increased by 348% in 2017.
  • 16. 16 Trademark Enforcement by U.S. Customs in 2017 According to the annual report from the U.S. Customs and Border Protection in 2017, the percentage of seized goods by category [by quantity]: • Cosmetics and Personal Care: 34%; • Sunglasses: 31%; • Consumer Electronics: 6%; • Critical Components: 6%; • Pharmaceuticals: 4%; • Sporting Goods: 4%; • Automotive/Aerospace: 3%; • Lights/Lamps: 2% • Perfumes:2%; • All others: 8%. NOTE: 1. China Customs only has the ability to inspect around 15% of all exported goods; 2. Seizure actions increased by 12% in 2017, which was 34,143 cases in total; 3. Total value of seized goods: $1,206. 38 million; 4. Channels of Seized Goods: Express: 60% Mail: 29% Cargo: 8%.
  • 17. Are You A Victim and What Is Your Plan? • Conduct a audit of unauthorized trademark applications and use to determine nature and scope of problems: • Review your trademark rights in China and other key and emerging markets; • Set up goals and strategic priorities for a certain period of time; and • Budget and plan for enforcement actions at a global level. 17
  • 18. Case Study 1: Cross-border Protection of Trade Dress 18 Argentina China 2013 1. Equipment that infringed trade dress flooded into the market. 2. Trade dress mark registered and recorded with Argentina Customs. 1. Large suppliers of infringing equipment were found in Argentina and identified as from China. 2. Trade dress mark pending. 3. China was not yet an important market. 2014 1. Infringing equipment detained by Argentina Customs. 2. Preparation for civil actions and permanent orders to stop importation of infringing goods. 1. Trade dress mark registered but lack prior cases of enforcement. 2. China was not yet an important market. 2015 - 2016 1. Civil actions filed and pending. 2. Continue to pressure wholesalers/importers through customs seizures. 1. China courts concluded a milestone civil litigation on trade dress protection [judgements in China are generally not binding precedents]. 2. China was not yet an important market. 2017 - 2018 1. Favorable judgements issued. 2. Large wholesalers stopped importing infringing equipment. 1. Business strategy prioritized Chinese market. 2. C&D letter: 9 out of 10 targets cooperated; 3. Successfully took down several hundred links of listings of infringing equipment from various Alibaba's websites.
  • 19. Case Study 2: If No Rights in China • Client received a customer complaint about consistency of products sold in Taiwan and discovered counterfeits; • We helped the client to identify counterfeiter and uncovered counterfeiter had obtained trademark registration through squatting; • After analyzing client's business strategy and IP right portfolio, we advised against enforcing against counterfeiter/squatter in China; • Actions: strengthening trademark rights in key markets, e.g., South American countries; and taking actions to cut off distribution channels, i.e., in Hong Kong. 19
  • 20. What's Inside The Box- Anti-Counterfeiting Actions in China • Cease & Desist Letter • Take-down Online Listings of Suspect Counterfeits • Administrative Raids • Civil Litigation • Customs Detainment/Seizure • Criminal Prosecution 20 NOTE: They may look similar to enforcement actions in the U.S., but can be vastly different!
  • 21. Administrative Actions vs. Civil Litigation 21 Administrative Actions Civil Litigation Authorities 1. Intellectual Property Offices (IPOs) /Administration for Industry and Commerce (AICs) (based on trademark infringement) 2. Quality and Technical Supervision Bureaus (QTSBs) (based on inferior quality of counterfeits) 1. Intellectual Property Courts 2. IP Chambers of Courts 3. Civil Chambers of Courts Actions 1. Inspect and raid factories, stores and trade shows; 2. Seize and confiscate counterfeits/infringing goods and manufacture equipment; Adjudicate on IP disputes Enforcement of judgement Powers 1. Impose injunctions; 2. Suspend business operation; 3. Impose fines. *NO monetary damage awarded to brand owners. 1. Preliminary injunction (rare); 2. Permanent injunction; 3. Confiscation of all infringing goods and equipment; 4. Order to apologize; 5. Damages (punitive damages are usually not supported). Timeline Raid Action: 2 days to 1 week Penalty Decision: 6 months to 1 year 12-24 months for the first instance 12-24 months for appeal 6-12 months for enforcement Costs $5,000-8,000 (plus $3,000 -5,000 for preliminary investigation) Costs: $ 50,000 – 80,000 covering 1st instance and appeal $8,000-10,000 for enforcement (plus additional costs and bonds for preliminary investigation; preservation of evidence; preservation of assets; preliminary injunction) No. of Cases 26,985 in 2017 3,441 in 2017
  • 22. Customs Actions Focusing on Training • Trademark Registration and Recordation are Musts; • Educational materials and trainings are Essential: 37,236 trademarks have been registered with China Customs; Large amount of exported goods and short period of inspection (1.5 hours per shipment); and Help field officers to get familiar with your brands and products. 22
  • 23. Discrepancy of Customs Seizures China (Export) U.S. (Import) E.U. (Import) Machinery, automation, equipment and parts: 25.56% Cosmetics and Personal Care: 34% Tobacco: 24% Tobacco: 25.25% Sunglasses: 31% Toys: 17% Cosmetics and Personal Care: 10.12% Consumer Electronics: 6% Foodstuff: 13% 23 China (Export) U.S. (Import) E.U. (Import) 94.92% in Cargo by Sea 8% in Cargo 67.03% in Cargo by Sea China (Export) U.S. (Import) E.U. (Import) Ex Officio: 99.78% By Application: 0.02% Data Not Available Ex Officio: 2% By Application: 98% 1. Top 3 Categories of Seized Goods 2. Seized Goods Transported Through Cargo 3. Percentage Ex Officio and By Application actions
  • 24. Take-Away for Anti-Counterfeiting 24 Conduct an audit to confirm if counterfeiting is a problem for business. Register trademarks and record with China Customs if needed. Strategize anti-counterfeiting actions based on business goals and budget. Understand difference of enforcement actions in China. Focus enforcement actions in key markets. Consider administrative actions before civil litigation in China. Customs actions: be responsive, train and global focus.
  • 25. Trademark Squatting - Overview • First-to-File and Broad Coverage - Case Study 3: Full Blown Fight Against Counterfeiter • Chinese Character Marks - Case Study 4: Battle over Chinese House Mark 25
  • 26. Avoid Squatting: First-to-File and Broad Coverage • First-to-file = race to file to obtain priority; • New marks should be treated as confidential prior to filings on a global scale; • File for all related goods and services, including in different classes, expanding coverage as broad as possible; • Evidence of use and intent to use are not required for registration; • Use of an unregistered or pending mark can put the mark under great risk of trademark squatting; • Use of registered marks out of the scope of registration raise risks of trademark squatting of unregistered goods and services. 26
  • 27. Case Study 3: Full Blown Fight Against Counterfeiter Client registered Chinese house mark on hair clippers in Class 8. Squatter filed Client's Chinese mark on shearing machines in Class 7 and started producing counterfeits using both English and Chinese house marks. Client filed opposition against Squatter's mark but lost three rounds of appeals. Squatter received registration certificate issued by mistake and took enforcement actions against Client. 27
  • 28. Hair Clippers under China's Subclass System 28
  • 29. Actions (1/2) - Defense Protecting Client's business from interruption- • Obtained an invalidation of the wrongfully issued trademark registration certificate; • Persuaded administrative authorities to refuse Squatter's "enforcement" requests based on the invalidation; • Provided training to business partners in responding to Squatter's harassment; and • Arranged for a point of contact for legal support in case of Squatters' harassment actions. 29
  • 30. Actions (2/2) - Attack Forcing Squatter to stop counterfeiting and unfair competition- • Successfully obtained a re-trial for opposition before People's Supreme Court (SPC), the highest court of China: only 12% of cases petitioned to SPC are granted with re-trial every year; • Conducted a successful administrative raid at a trade show while opposition was pending; • Conducted several rounds of evidence preservation and file a civil litigation based on trademark infringement and unfair competition; • Negotiated with trade show organizers to curb Squatter's requests for exhibiting counterfeits; and • Suggested to record registrations with China Customs to detain export counterfeits exported to India. 30
  • 31. Avoid Squatting: Chinese Character Mark 31 • Necessary whenever a mark is difficult for target consumers in China to pronounce and memorize.  Language barriers; and  Risks of letting third parties choosing Chinese mark for brand owners. • Benefits to Proactively Adopting and Protecting a Chinese Character Mark:  Ensure marketing value of the mark; and  Avoid high risks of trademark squatting.
  • 33. Nailed It! 33 赛百味 Sound: Sai Bai Wei Meaning: Superior to hundreds of flavors 可口可乐 Sound: Ke Kou Ke Le Meaning: Tasteful and joyful
  • 34. Case Study 4: Battle over Chinese House Mark Client's medicated lip balms are sold in China under a Chinese mark used by a distributor. Squatter registered Client's Chinese mark on lip balms in Class 3, produced counterfeits and aggressively enforced against Client. Client negotiated a new distributor and the Chinese mark in question was valuable and crucial. Squatter asked for an astronomic price for selling the mark. 34
  • 35. Actions (1/2) • Searched for an alternative route for registration and identified two items in class 5; • Ensure Client can sell relevant medicated balms in Class 5 without fulfilling additional legal obligations in mainland China; • Filed Client's Chinese house mark in class 5 on - Lip balms for medical purposes, modified from standard item "balms for medical purposes" Lip ointments for pharmaceutical purposes, modified from standard item "ointments for pharmaceutical purposes". 35
  • 36. Actions (2/2) • Successfully persuaded China Trademark Office to accept the modified goods; • Successfully obtained registrations for Client's Chinese house mark in Class 5, which serves as defense against Squatter's harassment; and • Proposed several strategies to neutralize Squatter's registration. 36
  • 37. Evaluate Impact of Trademark Squatting On A Global Level To decide whether and how to tackle a trademark squatter in China, consider the following elements: • Whether China is or will be a market; • How important the mark in questions is, e.g., house mark, Chinese mark, or secondary mark; • Whether consumers in other key markets will be confused; • Whether it is possible to re-brand and what is the cost; • Whether the Trademark Squatter is an extortionist or counterfeiter; and • Whether export of counterfeits from other counterfeiters becomes a serious issue (Note: a trademark registration is required to request China Customs to detain counterfeits). 37
  • 38. Take-Away For Avoiding Trademark Squatting • Don't walk, run to file! • Ensure the broadest coverage for trademark applications in China. • Consider adopting a Chinese character mark if doing business in Chinese speaking areas. • Be creative in defending from and enforcing against trademark squatters. • Trademark squatters may become competitors if not careful! 38
  • 39. Think Ahead of The Game 39 Anti-counterfeiting and brand protection is not a sprint, but a marathon. Take Proactive Measures to Protect Goodwill and Integrity of Your Brand:  Audit and file gap-filling trademark applications in key countries every 5 years;  Record trademark registrations with customs in key countries;  Trademark global watch;  Domain global watch;  Routine Monitoring of social media and online marketplaces;  Routine due diligence and compliance check of business partners;  Timely communicate with possible infringer to prevent development of infringement;  Work with marketing team to educate business and the public to respect your trademark rights; and  Join industrial organizations to keep up with latest news of counterfeits and anti-counterfeiting efforts.
  • 40. Thank you! 40 © 2018 Quarles & Brady LLP - This document provides information of a general nature. None of the information contained herein is intended as legal advice or opinion relative to specific matters, facts, situations or issues. Additional facts and information or future developments may affect the subjects addressed in this document. You should consult with a lawyer about your particular circumstances before acting on any of this information because it may not be applicable to you or your situation. Lori S. Meddings / Partner Lori.Meddings@quarles.com Quarles & Brady LLP 33 East Main Street, Madison, WI 53703-3095 Office 608-283-2653 / Cell 608-630-1623 Li Zhu / Attorney Li.Zhu@quarles.com Quarles & Brady LLP 411 East Wisconsin Avenue, Milwaukee, WI 53202-4426 Office 414-277-5143 / Cell 650-862-4600