The 5 biggest China IP stories of 2022

Last year 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 2022 that may be of interest to businesses in China and the UK

China Joins WIPO’s Hague System And The Marrakesh Treaty

Two of the most significant developments of 2022 were the coming into force in China of the Hague Agreement and the Marrakesh Treaty, on 5 May 2022.

The Hague Agreement is an international treaty administered by WIPO (the World Intellectual Property Organisation) that is related to the international registration of industrial designs. The ‘Hague System’ provides simple and convenient procedures for applicants to register an industrial design in multiple countries by filing a single application, filed in one language with one set of fees. China’s entry into the System should help Chinese designers protect and promote their designs in the 94 countries, including the UK, covered by the System more conveniently and cost-effectively. Moreover, foreign designers should find it easier to enter the Chinese market.

China became the 85th party to the Marrakesh Treaty, the only human rights treaty in the world in the field of copyright, which aims to provide access to and use of copyright works for people who are blind or visually impaired, in order to guarantee access to culture and education. China’s entry into the Treaty should increase opportunities for the blind and visually impaired in China to obtain copyright works and promote the overseas dissemination of Chinese works.

China’s ascension to the Hague System and the Marrakesh Treaty represents significant steps in global cooperation of these important agreements and should promote confidence in the users and beneficiaries of those systems.

A Five-Year Plan for the Protection and Use of Geographic Indications

The China National Intellectual Property Administration (CNIPA) introduced China’s first five-year plan regarding the protection and use of geographical indications.

A geographical indication is a sign on a product that has a specific geographical origin and possesses qualities or a reputation specific to that origin.

The Plan promotes steady and reasonable growth in both the number of entities using geographical indications and the number of recognised geographical indications by 2025. In addition, China will put into place a series of standards for geographical indications, establish national demonstration areas for the protection of geographical indication products, and help with the protection of Chinese geographical indications overseas.

The CNIPA’s commitment to geographical indications should give consumers comfort in the provenance and quality of well-known and identifiable products and provide producers with reassurance that their efforts will be appropriately rewarded.

The CNIPA Continues To Crack Down On Malicious Trade Mark Registration

Malicious trade mark registration, i.e. trade mark ‘squatting’, has long been a bane of companies looking to enter the Chinese marketplace.

In its ongoing efforts to combat the issue, the CNIPA issued the “Notice on Continuing to Severely Crack Down on the Malicious Registration of Trade Marks”, which indicates that a zero-tolerance approach will be taken against malicious trade mark hoarding and squatting, brand imitation, ‘free riding’ and ‘clout chasing’.  There will also be a general crackdown on illegal acts which violate good faith, public order or good custom, as well as obtaining rights illegitimately and disruption of orderly trade mark registration.

The ‘Notice’ highlights typical illegal acts that will be cracked down on:

1. Applications for registration of marks that are the same as, or similar to, those used by, or in connection with important public institutions and works.
2. Trade mark applications that obviously exceed normal business needs, or are without any real intention to use.
3. Copying, imitating or plagiarising a large number of trademarks or other commercial properties having a certain reputation or strong distinctiveness.
4. Filing a large number of applications for registration marks that are the same as, or similar, to public cultural resources, administrative division names, common names of goods or services and industry terms.
5. Transferring large numbers of trademarks to multiple assignees, disrupting orderly trade mark registration.
6. Situations where a trade mark agency knows or should know that a party is engaging in any of acts 1 to 5 above but nevertheless accepts such a registration or assignment or otherwise acts improperly as a trade mark agent.
7. Other acts that may cause a significant negative impact on China’s trade mark registration management, public interest, or public order.

It seems that there is clear intent on the part of the CNIPA to meet the issue of malicious trade mark registration head-on. It just remains to be seen how effective the above measure will be.

The CNIPA Sets Out Plans To Update Major IP Legislations

The CNIPA published a plan for ‘In-depth Implementation of the Opinions on Strengthening Intellectual Property Protection’, setting targets for updating various regulations and guidelines as well as major tasks to be carried out in the coming years.

Specifically, the CNIPA intends to revise the Implementing Regulations of the Patent Law and the Guidelines for Patent Examination, new guidelines for trade mark law enforcement and cross-border e-commerce IP protection.  The CNIPA also aims to reform the utility model system by introducing an assessment of “obviousness” in its examination of utility models. Other tasks include amendment of Anti-unfair Competition Law, Trade Mark Law and its implementing regulations, Regulations for Copyright Collective Management, and Regulations for Protection of Information Dissemination Right.

These reforms seem to be a clear indication from China of the seriousness of its ambition to become a global leader of intellectual property rights.

Update To The Amendments To The China Patent Law

Of particular interest to patent applicants and right holders are the updates to the 4th Amendments to the China Patent Law, which were originally introduced in June 2021.  The most significant updates include:

1. Increasing the statutory sum of damages to a range between RMB 30,000 and RMB 5 million to take account of the difficulties faced by a patentee when collecting evidence of patent infringement.
2. Improvements to the system for design patents. Specifically, protection for partial design will be allowed, and the period of protection for design patents will be extended to 15 years. Additionally, a six-month priority period will be introduced for domestic design patent applications for the same subject matter.
3. Clarification regarding patent term adjustment (PTA), which allows the term of protection of an invention patent in China to be longer than the statutory 20-year term under certain circumstances. To determine the length of PTA, at the request of the patentee, the CNIPA shall consider any unreasonable delay to the grant of an invention patent, as well as any unreasonable delay caused by the applicant. The update provides guidance as to what does and does not amount to “unreasonable delays” by the CNIPA when granting a patent. These include suspension procedures, preservation measures, administrative litigation procedures, and re-examination procedures in which amendments are made by the applicant.
4. The introduction of an Open Licensing system, where a patentee can declare to the relevant authorities their willingness to authorise another party the right to work under the patent, and specify any appropriate royalties and a payment schedule.

As China begins to shake off the shackles of the Covid-19 pandemic, it is clear that it is continuing to support and evolve its intellectual property system. Businesses, both in China and those looking to enter the Chinese market, should look forward to 2023 with confidence that their intellectual property rights are valuable and will be respected.

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