What Is A Well-Known Trademark (WKTM)?

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by Fabio Giacopello

 

Reading article 14 TML, we understand that a WKTM is a trademark that is extensively used and advertised, and enjoys high reputation in its field…

Chinese Trademark Law (TML) does not give a precise definition but it can be easily implied from the requirements posed for its recognition. Reading Article 14 TML, HFG Law & Intellectual Property it is understood that a WKTM is a trademark that is extensively used and advertised, and enjoys high reputation in its field[i].

Why Is Having A Well-Known Trademark Important?

From a merely legal point of view – leaving apart marketing considerations – the well-known trademark is a super hero, in the sense that it has “special powers” that “normal” trademarks don’t have. Such special powers are described in Article 13 of TML and are different, based on the fact that the WKTM is already registered or not in China. Provided below is a graphic representation to better explain the statute of rights or scope of protection granted to registered or unregistered WKTM.

Trademarks

A Well-Known Trademark That Is Not Registered In China Must Be Protected For Goods That Are Identical Or Similar To The Goods For Which The WKTM Is Famous.

Special powers consist in obtaining a protection identical to that granted to a registered trademark in the lack of registration and this is a big exception. Indeed a nonregistered and non-WKTM has almost zero rights. In any case, it is to be noted that having a non-registered WKTM is a very rare circumstance: the trademark shall be reputed, widely used and advertised, but its owner has not applied and registered it as a trademark.

More interestingly, the second part of Article art.13 takes into consideration the case of a Well-Known Trademark that is already registered. In such case, the special power granted is the so-called cross-class protection.

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Measures on Security Assessment of Cross-Border Transfer of Personal Information (2019 Draft)

Article by Daniel Albrecht

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Summary: The Cybersecurity Law of the People’s Republic of China was issued on November 7, 2016, and officially put into effect June 1, 2017. The Cyberspace Administration of China (CAC) has released supportive measures to implement provisions of the Cybersecurity Law. These draft Measures provide guidelines for cross-border transfer of data, data security assessments, and the protection of data in relation to national and public interest. In 2017, the CAC published Measures on Security Assessment of Cross-Border Transfer of Personal Information and Important Data. The draft received immense feedback, leading to a second draft released in June 2019, Measures on Security Assessment of Cross-Border Transfer of Personal Information. The new draft will affect a wide range of domestic and foreign entities in China that have cross-border transfer needs.

Separating “Personal Information” and “Important Data”

On June 13, 2019, the Cyberspace Administration of China (CAC) released Measures on Security Assessment of Cross-Border Transfer of Personal Information. Regulations and guidelines provided in the draft pertain to network operators that export personal information data to recipients outside of China. It should be noted that the 2017 draft Measures applied to both “important data” and “personal information” data. However, the 2019 draft legislation omits the term “important data” and solely focuses on the export of “personal information.” The removal of the term implies that the CAC is now treating important data and personal information as separate categories that are subject to different requirements.[1] Therefore, the content in the new draft regulation only concerns the cross-border transfer of “personal information” collected within the territory of China.[2]

Data Localization Requirement

China’s Cybersecurity Law requires data localization for “critical information infrastructure operators” (CIIO’s) that collect and generate data within China. In other words, the provision requires that personal information and important data collected by CIIO’s within the territory of China will be stored in Chinese servers. The 2017 draft Measures attempted to bring clarification to this data localization rule. However, the draft expanded the data localization requirement to all “network operators,” causing controversy and confusion in the international community. Since “network operator” is more vaguely defined than CIIO’s, the 2017 Measures broadened the scope for the data localization requirement.

To make things more complicated, the CAC published the 2019 draft Measures without any mention of data localization requirements. Although there is no data localization provision in the new draft, it does not mean that network operators are exempt from data localization. Legal experts point out that China’s Cybersecurity Law overlaps with the new draft Measures, and CIIO’s are still obligated to follow data localization rules. However, with the cybersecurity law referring to “CIIO’s”, and the Measures only referring to “network operators,” there is room for interpretation regarding what entities will be impacted by data localization requirements.

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Online IP Infringement in South-East Asia: How to protect your business

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The South-East Asian internet economy has witnessed a striking increase

According to the latest report by Google, Temasek and Bain & Company, the number of internet users in South-East Asia (SEA) has increased rapidly, reaching 360 million in 2019 — 100 million more than in 2015. Powered by rapid adoption and changing consumer preferences, the South-East Asian internet economy has leapt nearly 40 % from last year to exceed USD 100 billion, and is on track to hit USD 300 billion in 2025. The region has seen booming development, especially in the e-commerce sector. In 2015, 49 million people bought or sold items online. Today, that number has tripled to 150 million.[1]

Photo source: https://pixabay.com

Photo source: https://pixabay.com

The internet is fueling a dramatic rise in counterfeit and pirated products

It is obvious that the internet has brought enormous opportunities for companies, especially Small and Medium-sized Enterprises (SMEs) to develop and expand their business internationally. However, on the other hand, digitalisation also creates fertile ground for online intellectual property (IP) infringement, such as counterfeiting products, pirated goods, cybersquatting, stolen trade secrets, etc. As a result, it has caused various negative impacts on the sales, profits and reputations of affected companies as well as having broader adverse effects on the economy and public health, safety and security.

‘The Economic Impacts of Counterfeiting and Piracy’ report from Frontier Economics pointed out that the estimated value of total counterfeit and pirated goods in the world was USD 923 billion – 1.13 trillion in 2013 and is forecasted to reach an astounding USD 1.90 – 2.81 trillion in 2022.[2]

As it is now easier for everyone to buy and sell goods online, fake and pirated products are booming in SEA, across various e-commerce platforms, social media channels (Facebook, Instagram, TikTok) and a number of local websites. Consumers are offered a wide variety of counterfeit and pirated products. These items can be labelled with a counterfeited trade mark or just replicate the appearance of the original goods, and they are sold at any price-scale. Products majorly exposed to online counterfeiting are fashion retail, electronics, perfume and cosmetics, pharmaceuticals, FMCG, baby products, alcohol and automotive.[3] The origin of the fake products being sold in SEA varies, they can be produced locally or imported from  other countries notorious for manufacturing counterfeits, such as China, India and Turkey.

Online counterfeit and pirated goods have caused serious damage to the sales and profits of IP owners, jeopardised brand reputations and rendered the consumer less interested in authentic products. Vendors often use pictures of the original goods to attract consumers and then provide a counterfeit product. Ultimately, customers start to lose interest in affected brands.

An even more serious concern is connected with the use of fake products in the pharmaceutical, chemical, foods and beverages sectors. These products are not subject to controls like the original ones, and can seriously affect the consumers’ health.

How to combat online infringement

Online IP infringement is growing exponentially in SEA, for many reasons. IP rights are territorial, however online IP infringement is borderless. ‘While there is a degree of harmonization of the laws and regulations governing IP rights and their enforcement, these are not unified. Varying laws and practices in different jurisdictions make it difficult to navigate the legal landscape, fuelling legal uncertainty about outcomes.’[4] In any jurisdiction, the internet itself makes it harder to track down infringers effectively and stop them, but it is particularly difficult in SEA. The effectiveness of IP enforcement in the region is still a major concern. As a result, online trading is quickly becoming more and more attractive for IP infringers as they are less likely to be caught in SEA. In addition, although laws and regulations in South-East Asian countries generally prohibit the sale of counterfeit and pirated products, they do not specifically deter the sale of these products online. There is a lack of effective laws against online IP infringement, and the authorities have little experience in dealing with it.

The majority of the online trade in counterfeit products and pirated goods is at the retail scale, it means there is a huge number of infringers that companies must monitor in order to combat them. The internet makes it easy for anyone to set up a new online business. This means that even if  the culprits agree to stop their infringing actions after receiving a warning from the IP owner, e-commerce operators or enforcement authorities, it is still possible that they will quickly set up a new shop to continue with the illegal selling.

However, taking no action is inadvisable for companies seeking to safeguard their business in SEA. If your products have been infringed and sold in various places, a ‘no actions’ strategy will have a negative impact on your global business and jeoparadise your reputation.

To protect IP effectively, a company should build up a proactive and multi-faceted strategy to act swiftly and effectively against online infringers. The following options can be considered.

  • Actively monitor the online marketplace, and shopping and social media platforms, to identify infringement: Companies can do this by themselves or hire service companies with expertise in the field. In addition, today there are many advanced technological tools for searching and detecting sources of IP violation.
  • Conduct an investigation and gather facts: Don’t make a groundless claim, it will cost you both time and money. Once you have found a suspected infringement on the internet, the first step is to collect evidence on the infringer, e.g. basic information (name, address, other contact details, the scale of their business and the origin of their products).
  • Take-down Notices and Warning Letters: The majority of online infringers in SEA are small businesses, therefore sending a Warning Letter to online infringers has often proved to be a time- and cost-effective option. Also, submitting a Take-down Notice and Infringement Complaint to the e-commerce platform and social media operators can be another effective approach. Read and understand the IP policy against online infringment of each platform so that you can provide the appropriate information and documents as required to ensure the take-down is fast and effective.
  • Work with local enforcement agencies: Companies should be well prepared, with at least a basic understanding of the enforcement agencies available in each country in SEA and of how companies are eligible to use the enforcement options in the jurisdiction. It is worth noting that to enforce your rights in SEA, you are usually required to register your IP with the IP office of the country where you seek enforcement. Raid actions to seize infringing products, filing a claim to a court, or using customs to block counterfeit and pirated goods are also enforcement options that companies may consider in specific cases.
  • Seek advice from local experts: There are still many differences between IP laws and practices between the EU and SEA, and even within SEA inconsistencies abound. As many of the counterfeit and pirated products for sale are advertised in local languages or posted on local websites, monitoring by detection software or searching tools (usually in Roman characters) doesn’t work effectively. Therefore, companies should always seek advice from local experts who are familiar with local cases of infringement and who have close relations with enforcement bodies such as the courts, police and customs authorities.

SEA is a promising destination to expand your business in. However, there are still major concerns there relating to IP protection, especially in the digital era. European companies should be aware of the risks and prepare their IP strategy before going abroad. A proactive and well-prepared IP protection programme will secure sustainable business growth in SEA.

By Xuan Nguyen – Project Officer, South-East Asia IPR SME Helpdek

[1] e-Conomy SEA 2019: https://www.bain.com/insights/e-conomy-sea-2019/

[2] ‘The Economic Impacts of Counterfeiting and Piracy’ by Frontier Economics: https://www.inta.org/Communications/Documents/2017_Frontier_Report.pdf

[3] Industries exposed to online counterfeiting: https://www.group-ib.com/brandprotection/anticounterfeiting.html

[4] ‘IP Infringement Online: the dark side of digital’: https://www.wipo.int/wipo_magazine/en/2011/02/article_0007.html