2023 was another remarkable year for intellectual property (IP) in China and around the world. Peter Mumford, senior associate with Potter Clarkson LLP, provides a brief overview of some of the top IP developments from the past year that may be of interest to businesses in China and the UK
Four Supporting Regulations Issued for the Anti-monopoly Law
Effective from 15 April 2023, China’s State Administration for Market Regulation (SAMR) issued four supporting regulations aligning with the amended Anti-monopoly Law.
The new regulations target:
- Clarification of Anti-monopoly Law provisions, specifying subjects in horizontal monopoly agreements.
- Optimisation of regulatory procedures, including suspension and termination procedures during investigations of monopoly agreements and market position abuses.
- Strengthening legal liabilities, particularly for notifiers of undertakings concentrations, and their agents.
These regulations aim to enhance competition, streamline enforcement, and ensure compliance with anti-monopoly regulations in China’s market landscape.
Provisions on Prohibiting Abuses of Intellectual Property Rights Issued
Staying with the SAMR, revised Provisions on Abuses of Intellectual Property Rights have been published and became effective on 1 August 2023. The revisions address recent developments in antitrust enforcement and focus on three aspects:
- A broader scope of “abuses of intellectual property rights to exclude or restrict competition” to cover three primary forms of monopolistic practices – monopoly agreements, abuse of dominant market position, and concentration of undertakings.
- Enhanced rules for identifying monopolistic practices related to the exercise of intellectual property rights, providing clarity on factors and conditions for identifying relevant markets, dominant market positions, relevant monopolistic practices, and the review of undertakings’ concentrations.
- Strengthened regulation of typical and special monopolistic practices involving intellectual property, such as prohibiting entities from engaging in monopolistic practices through the exploitation of ‘patent pools’ and forbidding the misuse of standard essential patents by dominant market players.
These new provisions should give users of China’s intellectual property system confidence that rights will be used in a fair and equitable manner.
Scotch Whisky Association Receives a Certification Trade Mark in Hong Kong
Scotch fans and whisky brand owners were able to raise a glass as the Scotch Whisky Association (SWA) successfully completed its registration of Scotch whisky as a certification trade mark in Hong Kong.
A certification trade mark signifies that the goods (or services) in connection with which the mark is used are certified by the owner of the mark in respect of origin, material, mode of manufacture of goods or performance of services, quality, accuracy or other characteristics.
Completion of the registration of Scotch whisky is expected to bolster consumer confidence and facilitate enforcement for whisky brand owners.
The Apostille Convention Officially Takes Effect in China
Foreign companies can now enjoy the simplified use of foreign documents in China as the Apostille Convention officially took effect from 7 November 2023.
The Convention abolishes the lengthy, and often costly, legalisation process and allows for the acceptance of documents that have been certified by a Competent Authority in the country of origin. Specific changes include:
- Chinese Embassies and Consulates in member countries have stopped accepting legalisation service applications.
- Chinese courts will recognise documents with Apostille certification, and legalisation is no longer required.
- Notarisation remains necessary for non-official documents (e.g. a Power of Attorney), allowing for them to be certified by an Apostille for official use.
Court Rules that AI-Generated Content is Eligible for Copyright Protection in China
As AI-generated content continues to take the world by storm, the Beijing Internet Court’s decision marks a shift in AI jurisprudence by highlighting the need to examine the copyright eligibility of AI-generated content and the level of human involvement in its creation.
To briefly summarise, an AI-generated portrait was used without the plaintiff’s authorisation, with the defendant arguing that AI-generated content is not eligible for copyright protection.
The court found in the plaintiff’s favour, deciding that AI-generated content is eligible for copyright protection provided that it reflects human intellectual input. More specifically, despite AI’s role in generating the portrait in question, the court recognised the plaintiff’s creative choices in conceptualising and refining the image, establishing them as the copyright holder. The court also confirmed that AI itself could not be an author, and the author is instead considered the person who directly made the relevant settings to the AI model according to its needs and choices.
Foreign Geographical Indications Regulations Take Effect in China
Towards the end of 2023, the China National IP Administration (CNIPA) issued new regulations regarding the registration, administration, and protection of geographical indications (GIs). The new regulations took effect from 1 February this year and feature parallel regulations – a regulation for the “Registration and Administration of Collective and Certification Trademarks”, and a regulation regarding GI products.
The regulations cover new application, examination, protection, modification, and supervision procedures. Importantly, the regulations stipulate that geographical indication products must exhibit authenticity, regional characteristics, specificity, and association, and specify circumstances in which they will not be recognised.
Once a product receives GI protection, the owner is required to oversee the use of GI product names and special marks, as well as the products’ distinctive features and quality under the geographical indication.
The revised resolutions strengthen the provisions for both owners and users, including proving basic obligations and rights to each, which can only be good news for users of the systems. Additionally, it seems that progress is being made towards harmonising GI protection in China.
Revised Rules for Implementation of the Patent Law in China
December 2023 saw the publication of revised Rules for Implementation of the Patent Law in China, which came into effect on 20 January 2024. The key points for businesses and practitioners appear to be:
- The revised Rules expand provisions concerning the novelty grace period. In addition to a first disclosure at ‘academic conferences or technical conferences organised by relevant departments of the State Council or national academic organisations’, the Rules now allow for first disclosure at ‘academic conferences or technical conferences organised by international organisations recognised by the relevant departments of the State Council’. How this will be effectively examined by the CNIPA remains to be seen.
- Patent applicants are now required to adhere to the principle of good faith, and the revised Rules especially crack down on irregular patent applications, e.g., applications where the right to apply for a patent or designation of inventor is improper.
- A system allowing deferred examination has been introduced. Previously, the applicant must request substantive examination within three years of the filing date, and failure to do so would be deemed withdrawal of the application. Under the deferred examination system, applicants may defer examination for one, two, or three years enabling them to continue the patent examination process based on relevant commercial circumstances.
With China’s continuing efforts to evolve its intellectual property system, it appears that businesses, both in China and those looking to enter the Chinese market, should look forward to the rest of 2024 with confidence.
