Updates For IP Enforcement In Taiwan & China


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  • Coordination with different agencies
  • AIC is the largest agency to effectuate positive enforcement of trademark rights. AIC has the ability to confiscate and destroy infringing goods and the tools used to produce them. AIC takes action by (1) the filing of a complaint by a trademark owner or their authorized representative, (2) takes the initiative to investigate and contact the trademark owner to determine
  • Retrial, convened after a final ruling is made 31 high courts have discrepancies and inconsistencies in hearing criteria
  • The number proves that Chinese legal and judicial systems are more and more demanded by the IP owners. In recent years, there are 30% increase.
  • 1. Find a safer city 2. The court can grant a preliminary injunction only if (1) the patent owner has evidence proving an infringment has occurred; (2) irreparable damages are likely if the infringement is not stopped immediately; (3) the patent owner has submitted the appropriate deposition Find a court that is historically less strict in issuing an injunction.
  • The Administrative fine, some may consider it as a cost for doing business. And each AIC has its geographic limits which cannot go far beyond it.
  • Effective as of April 1, 2010.
  • China’s Customs allows IPR recordation, including patent, trademark and copyright
  • 刪除「在起訴前」的文字,固然海關的保護一般多是在提起訴訟之前為之,但亦可能發生在訴訟進行當中,侵權行為人進出口侵權的產品,為使知識產權權利人可以保護自己的權利,於是刪除「在起訴前」的限制文字,增加權利人行使權利的時間。
  • 1. Not affect the auction practice for those exported infringing goods. Also, the Customs still can transfer the confiscated goods to non-profit organizations for use in the public welfare. IP owners who would like to buy out, the Customs can transfer the confiscated goods to the IP owners with consideration 2. Allow IP owners to amicably settle the issue with the counterfeiter before Customs renders a decision. 3. Infringer being penalized, instead of goods simply being confiscated
  • A waste of Customs resources. Don’t become a black list.
  • 1.The Customs border measure is specified under the Proposed Trademark Law Amendment. If any goods suspected of infringement are located, the customs will notify the trademark owner or agent, who must show up at the customs office to verify the goods within one business day. In the meantime, the Customs should notify the importer/’exporter to provide documents proving authorization within 3 working days. (and can be extended) - With or without right, the right holder can pay the bond to request a detention, or apply for preliminary injunction at the court – not do so, release the goods - After detention request, the right holder shall file a lawsuit within 12 days and notify the Customs. – not do so, abolish the detention and release the goods. (may extend another 12 days)
  • 1. the function of which is covered by (1) “ Operational Directions for Customs Authorities in Implementing Measures for Protecting the Rights and Interests of Patent, Trademark, and Copyright ,” and (2) “ Customs Anti-Smuggling Act ” Since TEMS was abolished, …..Not affect random inspection for importing goods
  • After detention request, the right holder shall file a lawsuit within 12 days and notify the Customs. – not do so, abolish the detention and release the goods. (may extend another 12 days)
  • As for the issuance of preliminary injunction, the IP Court tends to be very prudent, it requires the applicant to prove the likelihood of infringement to the level of “likelihood of success on the merit” as it generally required by the U.S. courts. Therefore, it is hard to obtain an injunction, and thus very hard to get the Customs detention.
  • If the foreign court does not have a jurisdiction over the case as determined by the law in Taiwan. Normally do not challenge, as long as it is not subject to an exclusive jurisdiction of courts The defendant must be served a reasonable notice to commence a litigation in a foreign country. Can’t use personal delivery or mail delivery, must serve through judicial assistance in order to have a default judgment be recognized. However, service is valid if the service agent is recognized by the law of the foreign court for the service in that country. If the parties involving Taiwan choose a foreign forum in their agreement, and that foreign forum recognize the service agent, then the parties should make it in writing in their agreement. Discuss on the next slide The Supreme Court ruled that there is judicial reciprocity if it can be reasonably expected that the court of foreign country will recognize Taiwan Judgments. U.S. has no such a problem. China’s civil judgments can be enforced in Taiwan too.
  • Updates For IP Enforcement In Taiwan & China

    1. 1. Crystal J. Chen Admitted in New York State Admission Pending in Beijing, PR China IP Enforcement in China & Taiwan
    2. 2. Enforcement Avenues in China <ul><li>Administrative Enforcement: </li></ul><ul><ul><li>Local Administration for Industry and Commerce (AIC) </li></ul></ul><ul><ul><li>Local Intellectual Property Office (IPO) </li></ul></ul><ul><ul><li>State Intellectual Property Office (SIPO) </li></ul></ul><ul><li>Civil Proceedings </li></ul><ul><li>China’s Border Measures </li></ul>
    3. 3. Administrative Avenue <ul><li>AIC – over 3000 offices across China, more than 500,000 employees, investigate and combat trademark infringement on all administrative levels (State, Provincial, County and City) </li></ul><ul><li>SIPO & local IPO – deals with patent issues throughout the country </li></ul>
    4. 4. Enforcement through SIPO <ul><li>Issuance of an injunction </li></ul><ul><li>Mediation of the dispute </li></ul><ul><li>Determination of an appropriate amount of compensation for the losses </li></ul><ul><li>Confiscate illegal earnings </li></ul><ul><li>Impose a fine on the infringer for up to three times the revenue generated, or up to 50,000 RMB in the absence of illegal earnings </li></ul><ul><li>Directly transfer the case to the Public Security Bureau (Police) to institute criminal prosecution against the infringer </li></ul>
    5. 5. Civil Proceedings <ul><li>Understand the court’s administrative levels in China: </li></ul><ul><li>District Level: Over 3000 courts, 40 of which have capability to handle trademark and copyright cases </li></ul><ul><li>County /City Level: Over 400 Intermediate Courts; all can adjudicate trademark cases, only 70 can rule on patent cases </li></ul><ul><li>Provincial Level: 31 High Courts, hearing appeals from Intermediate Courts, decisions can be appealed to the Supreme Court </li></ul><ul><li>State Level: the Supreme Court </li></ul>
    6. 6. IP Litigation in China <ul><li>30,500 IP-related first instance cases in 2009; around 4,400 are patent litigation, but merely 1,700 involved a foreign party </li></ul><ul><li>Patent litigation proceedings are fairly quick: -- 6 months to 2 years </li></ul><ul><li>Cost of litigation: 50,000 to 100,000 RMB in average </li></ul>
    7. 7. Tight Schedule <ul><li>Tight schedule in IP litigation: </li></ul><ul><ul><li>15 days for domestic defendants to respond and file an invalidation with the Patent Reexamination Board; 30 days for foreign defendants </li></ul></ul><ul><ul><li>Only one month for both sides to submit evidence, clock ticking from the case being accepted </li></ul></ul><ul><ul><li>Some trials were decided in 6 months </li></ul></ul><ul><li>For defendants, challenging jurisdiction could buy some time (even double the length of the time it generally takes) </li></ul>
    8. 8. Pitfalls of Litigation <ul><li>Level of courts’ IP expertise varied : judges’ IP expertise and experience are varied depending on the place and the administrative level of the court </li></ul><ul><li>Local protectionism : affects foreign and Chinese IP owners equally </li></ul><ul><li>Low transparency : no discovery, hard to obtain evidence </li></ul><ul><li>Monetary damages are hard to collect </li></ul><ul><li>Injunctions on business activity are hard to impose </li></ul>
    9. 9. Choose the Right Avenue <ul><li>Administrative avenue: quick, inexpensive, effective in stopping small localized infringement, but penalties imposed are small amounts </li></ul><ul><li>Litigation: good to combat complicated cases; i.e. advanced technology, infringement across several jurisdictions, became frequently used in recent 2 years. </li></ul><ul><li>Can proceed both: no concept of double jeopardy; AIC ruling against the defendant is not binding on the lawsuit </li></ul>
    10. 10. Amended Border Measures (1) <ul><li>Newly amended Regulations on Customs Protection of IPR: </li></ul><ul><ul><li>IP owners must update the registration record and list of authorized suppliers on the Customs General Administration (CGA) </li></ul></ul><ul><ul><li>In case incorrect detention due to IP owners failure to make a proper recordation, the CGA can revoke the recordation ex officio or at an interested party’s request. </li></ul></ul>
    11. 11.
    12. 12. Amended Border Measures (2) <ul><ul><li>The time bar for an preliminary injunction or property preservation is removed </li></ul></ul><ul><ul><ul><li>Before the amendment , IP owners must apply for an injunction before institute a lawsuit. </li></ul></ul></ul><ul><ul><ul><li>After the amendment , IP owners can apply at anytime after requesting the Customs seize the counterfeit items, even during the litigation. </li></ul></ul></ul>
    13. 13. Amended Border Measures (3) <ul><ul><li>Auctions of imported infringing goods are prohibited in principle , even the infringing features of the product have been removed </li></ul></ul><ul><ul><li>Allow the rights owner to withdraw the detention application and request the release of goods at issue </li></ul></ul><ul><ul><li>Hand-carrying or mailing articles that infringe IP rights which exceed the personal use limit are treated as infringing goods (confiscated & penalized) </li></ul></ul>
    14. 14. CGA’s Recent Notice on Re-Release of Goods <ul><li>In June, CGA circulated “Notice on Re-Release of Goods under the IPR Border Protection Measures” : </li></ul><ul><ul><li>IP owners who have recorded their IP with Customs fail to respond to reports of suspect shipments, or manage information on authorized suppliers </li></ul></ul><ul><ul><li>Customs will revoke the recordation on CGA </li></ul></ul>
    15. 15. Border Measures in Taiwan <ul><li>The Customs conduct random inspection ex officio on import and export cargos for any likely trademark and copyright violation </li></ul><ul><li>Infringement of Patent rights is not within the scope of Customs’ inspection </li></ul><ul><li>Trademark Export Monitoring System (TEMS) was abolished in July 2010, substituted by Operational Directions for Customs Authorities in Implementing Measures for Protecting the Rights and Interests of Patent, Trademark, and Copyright (hereinafter “Directions”) </li></ul>
    16. 16. Amended Border Measure on Export Inspection <ul><li>No longer accept applications for recordation of registered trademarks for export monitoring </li></ul><ul><li>Current recordation remain effective until expiry of its recorded durational terms </li></ul><ul><li>Trademark and copyright are protected under the “Directions” primarily on the ground of complaints made by the right holder. The right holder who filed the complaint must institute a lawsuit against the infringer within 12 days . </li></ul>
    17. 17. Taiwan Customs Detention <ul><li>For trademark rights and copyrights , procedures for complaint-based protection must be complaint /advice accompanied by: </li></ul><ul><ul><li>Facts of infringement </li></ul></ul><ul><ul><li>Certificate of trademark registration and proof of copyright </li></ul></ul><ul><ul><li>Name of the suspected importer/exporter </li></ul></ul><ul><ul><li>Description of goods </li></ul></ul><ul><ul><li>Port of import/export </li></ul></ul><ul><ul><li>Date of import/export </li></ul></ul><ul><ul><li>Flight/vessel number, container number </li></ul></ul><ul><ul><li>Place of storage of the goods </li></ul></ul>
    18. 18. Taiwan Customs Detention (2) <ul><li>For infringement of patent rights , the Customs will implement the measure on the basis of: </li></ul><ul><ul><li>Court judgment or preliminary injunction </li></ul></ul><ul><ul><li>Proof of patent or trademark right, or proof of copyright </li></ul></ul><ul><ul><li>Name of the suspected importer/exporter </li></ul></ul><ul><ul><li>Description of goods </li></ul></ul><ul><ul><li>Port of import/export </li></ul></ul><ul><ul><li>Date of import/export </li></ul></ul><ul><ul><li>Flight/vessel number, container number </li></ul></ul><ul><ul><li>Place of storage of the goods </li></ul></ul>
    19. 19. IP Enforcement I n Taiwan <ul><li>Legal capacity – Can a corporation not incorporated in Taiwan be a party of a civil law suit? </li></ul><ul><li>Enforcement of foreign judgments – Are foreign judgments automatically recognized in Taiwan? </li></ul>
    20. 20. Legal Capacity <ul><li>Article 40 (I) & (III) of the Civil Procedure Code: “Any person who has legal capacity has the capacity to be a party… </li></ul><ul><li>An unincorporated association with a representative or an administrator has the capacity to be a party.” </li></ul><ul><li>Foreign corporation unincorporated in Taiwan is deemed an “unincorporated association,” and therefore can be a party of a civil action. </li></ul>
    21. 21. Enforcement of Foreign Judgments <ul><li>Foreign judgments are automatically recognized in </li></ul><ul><li>Taiwan, unless one of the followings occurs: </li></ul><ul><li>No jurisdiction over the matter </li></ul><ul><li>A Default Judgment </li></ul><ul><li>The content is contrary to Taiwan’s public policy or ethics </li></ul><ul><li>No reciprocal recognition between the two countries </li></ul><ul><li>-- Article 402 of the Civil Procedure Code </li></ul>
    22. 22. Public Policy v. Attorney Fee <ul><li>Public Policy: It is not compulsory to retain a lawyer in a civil litigation at its first and second instances. Therefore, claiming attorney fees from the losing party will not be granted. </li></ul><ul><li>Question: Whether a foreign judgment awarding an attorney fee to the prevailing party is contrary to the public policy or ethics, and therefore result in unenforceability? </li></ul><ul><li>Answer: No public policy concern. Attorney fee is recognized based on international comity -- Attorney fee awarded in a foreign judgment is therefore enforceable </li></ul><ul><ul><ul><ul><ul><li>Supreme Court Civil Judgment (95) TaiShanTzi No. 293 </li></ul></ul></ul></ul></ul>
    23. 23. Enforcement of Foreign Judgments (2) <ul><li>Without the 4 exceptions, foreign judgments are automatically recognized in Taiwan – embodiment of the spirit of res judicata </li></ul><ul><li>Procedures under Article 4-1 of the Compulsory Execution Law: </li></ul><ul><ul><li>The foreign judgment must be final </li></ul></ul><ul><ul><li>Must file a civil action with a court in Taiwan for the court to enter a judgment granting its enforcement; and the judgment must be final </li></ul></ul>
    24. 24. Thank you! <ul><li>連邦國際專利商標事務所 </li></ul><ul><li>TSAI, LEE & CHEN Patent Attorneys & Attorneys at Law </li></ul><ul><li>11 th FL., 148 Songjiang Rd., Taipei 104, Taiwan </li></ul><ul><li>Tel: +886-2-2564-2565 Fax: +886-2-2562-7650 </li></ul><ul><li>Email: info@tsailee.com.tw Website:http://www.tsailee.com </li></ul>