An Introduction to Intellectual Property Protection and Enforcement in China and South-East Asia

Quote

This article is written by our China IP Expert, Ms Alessandra Chies, on the occasion of the Texworld Trade Fair, the No.1 European Trade Fair for Worldwide Apparel Sourcing which this year took place in Paris on 18-21 September. It gathered over 600 international suppliers, companies and EU SMEs, as well as about 950 fabrics manufacturers from 27 countries. 90px-Aguayos This article provides a concise yet comprehensive introduction to Intellectual Property protection and enforcement in China and South-East Asia, and summarizes the main talking points discussed by Alessandra Chies at Texworld on 18 September 2017. 

Intellectual Property (IP) protection is a primary method for securing a return on investment in innovation, offering to IP owners a competitive edge that others will not have. SMEs invest a tremendous amount of time, passion and monetary efforts in R&D and marketing, but often fail to consider that, in most countries, the only way to enjoy exclusive rights over their creative efforts and their business identity (trademark) is through IPRs registration. Considering that in the textile sector one single product can brilliantly encompass almost all form of IP rights, understanding and defending them is a paramount objective: a Patent for the new man-made yarn, the Design for an innovative texture of the fabric, the Copyright for the drawing painted on it, the Trade-secret for the dying procedure and the Trademark as representation of the business identity, all in one small piece of cloth.

The point is that Trademarks, Designs, Patents, are territorial rights and most countries adopt the first to file principle: this means in practice that the IPRs belong to their creator only if their creator was the first one to register it in that Country. And each Country in the world has its set of rules, its peculiarities, its advantages and pitfalls. Without being secured through registration, with the assistance of lawyers, expert in the jurisdiction, your IPRs can be freely exploited by anybody else. Considering the importance of the China market and the wonderful opportunities it offers in terms of production abilities, raw and semi-processed materials and the growing purchasing power and awareness of Chinese consumers, SMEs cannot afford to put-off investments in IP registration and enforcement in China and in the South-East Asian countries that are slowly but steadily emerging. Continue reading “An Introduction to Intellectual Property Protection and Enforcement in China and South-East Asia” »

Patent Protection in Myanmar

Quote

Myanmar is an emerging market showing steady growth rates since the country set itself on a course of political liberalisation. Despite being one of the poorest ASEAN nations, the country’s economy grew at around 8.5% in the 2014/2015 fiscal year, with economic reforms bolstering consumer and investor confidence. The service sector was the main driver of growth thanks to expansions in telecommunications and transportation. Myanmar is an emerging economy with a GDP of $64.3 billion, which is 120px-Baganmyoattracting more and more foreign investments. Its 53.4 million strong population is mainly occupied in the agricultural sector. However, the garment and mining industries, as well as wood products also take up a significant part of the economy. 

EU imports for Myanmar are dominated by the textile industry, accounting for nearly 80% in 2011, making it the 29th largest trading partner for the EU for clothing. Agricultural products also play a significant role in Myanmar’s exports to the EU. EU exports to Myanmar on the other hand are dominated by machinery and transport equipment. EU exports to Myanmar have risen steadily since its increasing political liberalisation. 

Patents in Myanmar

Myanmar is not currently a signatory of the Paris Convention for the Protection of Industrial Property or any other treaty protecting patents. However, in accordance with the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), to which it has acceded, Myanmar is required to implement and comply with Articles 1-12, Article 19 of the Paris Convention and the terms of TRIPS by no later than 1st July 2021. Myanmar is now drafting IP laws such as the Patent Law to ensure its IP legislation is more in line with the TRIPS.

Although the Burma Patents and Designs (Emergency Provisions) Act 1946 came into force in 1993, there is presently no law in operation on patents. This implies that production, commercial use and trade in goods is possible without permission of the companies (or individuals), including those who may already hold the relevant patents outside Myanmar. At present, patent owners can file a Declaration of Ownership with the Myanmar Registry Office of Deeds and Assurances. There is no substantive examination or formality examination and once the declaration is registered, it is advisable to publish a Cautionary Notice in a daily English language newspaper such as the New Light of Myanmar, advising the public of patents’ ownership. The Declaration will be valid for 3 months with a possibility of renewal. However, the Declaration of Ownership does not grant any patent rights and currently there are very few options to actually enforce patents in Myanmar.

It is also possible to register Technology Transfer Agreements with the Myanmar Scientific and Technology Research Department. Only registered agreements are enforceable in Myanmar. The law, however, doesn’t cover patent licensing.

As patent protection in Myanmar is extremely limited, in order to seek protection for their inventions, most entrepreneurs have to invest considerable amounts in protecting their trade marks through the means locally available in Myanmar so that they can at least protect their brand reputation and goodwill from illegal action related to their products and businesses.

New Draft Patent Law (year 2015)

Myanmar government has published the New Draft Patent Law in 2015 that is still pending for approval.  The Draft Patent Law will include procedural and substantive provisions found in patent laws of most Paris Convention countries (including EU countries).

According to the Draft Patent Law, in order to be patentable, the invention must:

(a) be novel (absolute novelty applies);

(b) involve an Inventive step; and

(c) be industrially applicable.

Those three requirements are in line with international standards of patent protection worldwide. The patent registration system will also be similar to many other ASEAN countries. Patent applications would be filed with the Myanmar Intellectual Property Office (IPO), the governmental body that shall be created to be in charge of all IP registrations in the country. Upon receiving the application, a preliminary examination of all patent applications will be performed by the IPO, and publication of the patent application will follow if the patent application is considered complete and does not contain information contrary to national security or public safety.

The IPO might delay publication of the patent application until it receives clearance from the responsible ministry. For patent applications determined to be contrary to national security or public safety, the responsible ministry shall have the right to transfer any and all rights in the patent application to the Myanmar government. The ministry however needs to provide sufficient compensation to the applicant.[1]

The Draft Patent Law will also provide an opposition period of 3 months, starting from the date when the patent application was published. The opposition period is followed by substantive examination and subsequent grant of patent or rejection of the application.

Patents will be protected for 20 years subject to annuity fees. However, regarding essential pharmaceuticals the Myanmar government will have the right to issue compulsory licenses, which means that the patent owner cannot object to other companies receiving the right to produce these pharmaceuticals. These licenses, however, would be subject to royalties.  According to the Draft Patent Law, essential pharmaceuticals are defined as those pharmaceuticals considered essential to the public, national security, or development of the country, or those pharmaceuticals which provide a monopoly to the patentee that is considered detrimental to national interest.[2]

In case of patent infringement, patent owners will have the right to pursue civil litigation and criminal prosecution. Additionally, patent owners may apply to relevant courts for preliminary injunctions.

Enforcement 

Currently, in the absence of a functional patent law, it is extremely difficult to enforce patents in Myanmar. Under the Specific Relief Act (1877) and under the Merchandise Mark Act (1889), there are provisions which might grant enforcement, however, it is advisable to discuss these options with local IP lawyers to see whether they are applicable to the specific case. It is also advisable to discuss patent protection strategies with an IP expert before bringing technology to Myanmar.

In order to seek protection for their products, companies can consider emphasizing trade mark protection in Myanmar to protect their brand reputation and goodwill from illegal action related to their business, since brand protection is currently more developed in Myanmar.

South-East Asia IPR Helpdesk

SEA IPR

The South-East Asia IPR SME Helpdesk supports small and medium sized enterprises (SMEs) from European Union (EU) member states to protect and enforce their Intellectual Property Rights (IPR) in or relating to South-East Asian countries, through the provision of free information and services. The Helpdesk provides jargon-free, first-line, confidential advice on intellectual property and related issues, along with training events, materials and online resources. Individual SMEs and SME intermediaries can submit their IPR queries via email (question@southeastasia-iprhelpdesk.eu) and gain access to a panel of experts, in order to receive free and confidential first-line advice within 3 working days.

The South-East Asia IPR SME Helpdesk is co-funded by the European Union.

To learn more about the South-East Asia IPR SME Helpdesk and any aspect of intellectual property rights in South-East Asia, please visit our online portal at http://www.ipr-hub.eu/.

[1] Baker & Mackenzie: http://f.datasrvr.com/fr1/315/70539/Myanmar_Publishes_Draft_Patent_Law.pdf

[2] Ibid.

Terroir IPR Part 2: Regulatory bodies and collective action against counterfeiting

Quote

In our previous article we discussed wine’s history as a product heavily reliant on geography, soil quality, and climate, or terroir for its unique characteristics, the resultant importance of regional classifications, and the legal protection available for producers based in distinctive wine regions. In this article we’ll be looking at how certain regulatory bodies and wine associations can, and in some cases already do, help producers to protect the reputations of their brands. Finally we’ll look at how the wine industry can come together to tackle the counterfeiting industry which continues to damage the sales and reputation of this much loved beverage.

copyright-laws-intellectual-property-legal-protection-d-re-72271922

Some weeks ago, we contacted INAO, Institut National de l’Origine et de la Qualité, The National Institute of Origin and Quality, France’s public administrative authority responsible for the implementation of French policy on official signs of identification of the origin and quality of agricultural and food products, including wine.

Over the last decade, INAO has worked hard to protect French PDOs and PGIs in China, and has seen its actions in China increase considerably between 2008 and 2015. Indeed INAO has seen bad faith trade mark registrations of French GIs quadruple in recent years with just 12 predatory French GI registrations in 2009 rising to 60 in 2014 with no sign of a reduction in numbers. In their experience these have been a mix of true ‘trade mark squatters’, simply out to make a profit, as well as shady importers of genuine GIs registering trade marks in an attempt to gain exclusivity over the market, thereby ignoring the collective nature of GIs.

INAO, like other national bodies, has not sat idly by however, and has filed numerous opposition or annulment actions before the Chinese Trade Mark Office (CTMO) against marks which infringe French GIs. The average cost of these actions comes to around €2,000 and as the number of infringing applications is on the rise they are beginning to feel the strain on their budget.

As such, INAO has been less able to involve itself in ‘boots on the ground’ investigations and actions against individual counterfeiters. Representatives have expressed their dissatisfaction at their inability to tackle these counterfeiters, who are damaging the industry as a whole, however the prohibitive costs in tackling the numerous infringers is too high for their already overstretched budget and they need more support if they are to tackle the roots of the problem.

Regional organisations have also made attempts at reducing the problems of counterfeiting in China. The Bordeaux Wine Council; Conseil Interprofessionel du Vin de Bordeaux (CIVB)[1] has been working for years to combat wine fraud, and with the help of the French Finance Ministry runs a specialist laboratory to test suspected fakes, as well as commissioning an app; Smart Bordeaux[2], which allows buyers to check the details of vintages by taking a photo of a wine label or scanning a bar code[3].

In January 2011, the CIVB engaged Nick Bartman, a specialist counterfeit investigator, to put together a team and investigate wine counterfeiting in China[4]. However due to budget constraints, the scope of the investigation was limited, as was the legal action which followed. The team’s actions on behalf of the CIVB resulted in an estimated €30 million worth of damage to counterfeiting operations. Bartman believes however that without the limits on investigative scope and freedom to litigate, this figure could have been vastly improved. With more time, and a fully-fledged cross-border investigation, enough damage could be done to infringement operations to significantly deter future wine counterfeiting in the region.

In addition to Mr Bartman’s activities, the CIVB has also engaged another old China hand; Thomas Jullien. Based out of Hong Kong, Mr Jullien and his team work both to promote Bordeaux wines in China, as well as chase down counterfeits and tackle infringers. In their anti-counterfeiting efforts Thomas’s team work to register GIs for all of Bordeaux’s 50 appellations, as well as track down and take action against infringers. This project has now been active for over 5 years and has removed a great number of counterfeits from the market. However, enforcement remains a key issue and even though Thomas’s team focus their efforts on large scale infringers, with more obvious counterfeits, lack of education within enforcement authorities regarding wine counterfeiting means that officials in less experienced bureaus remain reluctant to take risks to shut down infringers. Without the resources to help educate the numerous local authorities around China, this barrier to enforcement will remain and successful actions will be limited primarily to first tier cities, thereby limiting the effective impact that these experienced anti-counterfeiting teams can have on national production.

It’s not just the investigators feeling this frustration; Dr. Paolo Beconcini, managing partner at Carroll, Burdick & McDonough LLP[5], has spent more than 15 years taking down counterfeiters in China for some of the biggest brands in business and has studied and written on wine counterfeiting in the past[6]. Paolo’s philosophy when it comes to counterfeiters is akin to a well-aimed sledgehammer; once found you have to hit them fast, and you have to hit them hard. This ‘shock and awe’ tactic is incredibly effective, and works not only to close down the immediate counterfeiting operations, but also to deter other counterfeiters of those products.

Each year, Paolo attends working groups for the Quality Brands Protection Committee of China (QBPC)[7], as well as Interpol’s China and South-East Asia Trafficking in Illicit Goods and Counterfeiting Sub-Directorate[8] which provides training for customs officials and police on recognition of products, thereby assisting them in carrying out the investigations and raids which have marked Paolo’s successful career.

These working groups, and the lobbying clout they represent could catapult the wine industry into the crosshairs for Chinese police officials, and yet representatives are conspicuously absent from their memberships. Without the education and support of these Chinese officials, and relying on the comparatively shallow pockets of individual producers and organisations like the CIVB, the wine industry is unable to bring to bear the strength necessary to tackle the now established counterfeiting operations which continue to damage profits and reputations of wine producers around the world.

For lasting success in the war against counterfeiters, a much larger coalition is required; a global wine protection initiative with the support of national and regional wine associations, importers, retailers, and individual producers. With this kind of backing individual costs would be slight, but the political weight and financial power behind the investigators and legal teams would be the greatest threat yet seen by counterfeiters in any industry.

Alex Bayntun-Lees
China IPR SME Helpdesk

Logo China

The China IPR SME Helpdesk supports small and medium sized enterprises (SMEs) from European Union (EU) member states to protect and enforce their Intellectual Property Rights (IPR) in or relating to China, Hong Kong, Macao and Taiwan, through the provision of free information and services. The Helpdesk provides jargon-free, first-line, confidential advice on intellectual property and related issues, along with training events, materials and online resources. Individual SMEs and SME intermediaries can submit their IPR queries via email (question@china-iprhelpdesk.eu) and gain access to a panel of experts, in order to receive free and confidential first-line advice within 3 working days.

The China IPR SME Helpdesk is co-funded by the European Union.

To learn more about the China IPR SME Helpdesk and any aspect of intellectual property rights in China, please visit our online portal at http://www.ipr-hub.eu/.

[1] http://www.bordeaux.com/

[2] https://itunes.apple.com/gb/app/smart-bordeaux-bordeaux-wines/id404568006?mt=8

[3] http://www.ft.com/cms/s/0/07aa952e-1345-11e5-ad26-00144feabdc0.html#ixzz3ron4bpRI

[4] Suzanne Mustacich. (2015). Thirsty Dragon, China’s Lust for Bordeaux and the Threat to the World’s Best Wines. London: Henry Holst and Co. p130-156.

[5] http://www.cbmlaw.com/

[6] https://www.linkedin.com/pulse/china-counterfeiters-wine-business-paolo-beconcini?trk=prof-post

[7] http://www.qbpc.org.cn/

[8] http://www.interpol.int/Crime-areas/Trafficking-in-illicit-goods-and-counterfeiting/Trafficking-in-illicit-goods-and-counterfeiting