China remains the origin of most counterfeit goods arriving in the EU (as confirmed in a report just published by the European Commission). Historically rights owners have also found it incredibly difficult to succeed in enforcing their intellectual property (IP) rights in China, however there are signs that things are improving, albeit slowly, as we discuss in this blog.
What's the state of play in the EU?
The European Commission recently published its latest report on the protection and enforcement of IP rights in countries outside the EU. In the accompanying press release, the Commission said that China continues to be the top priority for the EU due to persistent and longstanding problems. According to the report, China remains the origin of most counterfeit and pirated goods arriving in the EU; over 80% of the seizures of counterfeit and pirated goods come from China or Hong Kong.
Meanwhile in recent years Chinese companies have been increasingly proactive in protecting their IP in the EU. For example, China was amongst the five most active countries at the European Patent Office in 2017.
What's the state of play in China?
In the past, reports about IP protection for "foreign" companies in China have nearly always been negative, however there have been a number of instances of positive news for rights owners over the past few years. This includes the landmark decision in 2017 in which New Balance was awarded record damages for trade mark infringement and the 2016 ruling in favour of Michael Jordan in a series of trade mark disputes against a Chinese sportswear business (see our blogs here and here for the details).
Discussing the current issues facing IP owners in China recently with clients and colleagues from our offices in Beijing and Shanghai, the following key points came out:
- The Chinese judicial system is resolving increasingly more complicated and new IP disputes, for example in the FRAND sphere;
- IP owners have been able to recover legal costs, as well as being awarded damages in several recent cases;
- There has been a notable acceleration in trade mark registration processing, following improvements to the registration system and increased resources at the China Trademark Office;
- IP owners have found that relying on copyright protection can be successful where enforcing trade mark or design rights is more difficult;
- Overall, there is a feeling that things are slowly improving in terms of protection and enforcement of foreign IP rights in China; and
- Despite the legal reforms the problem still remains of tackling counterfeiting at source – cultural and economic factors play a role in this.
If you have any questions about protecting and enforcing IP rights in China please get in touch with one of the authors or your usual contact at Fieldfisher and if further advice is needed we can direct you to our colleagues in China.