Amazon Sellers’ Guide: Chinese IP Law
By: CJ Rosenbaum Esq., Anthony Famularo Esq., Conor Wiggins, and Moshe Allweis
Registering Your Intellectual Property in China: Preventing Issues Before They Occur ……….. 19
Registering For Copyright Protection in China ……….. 20
Registering For Trademark Protection in China ……….. 30
Registering For Patent Protection in China ……….. 41
Chinese IP Law: Chapter 3: Registering Intellectual Property in China: Preventing Issues Before They Occur
Savvy sellers will register their products in China because if a seller does not file their copyrights, trademarks, or patents in China, that seller has no formal intellectual property protection in China.
This chapter’s goals are twofold:
(1) Provide sellers with a basic explanation regarding which IP rights they can register in China, and;
(2) Provide sellers with a basic understanding of how to preempt the most common issues that occur during the registration of their intellectual property rights in China.
(I). Registering for Copyright Protection in China
A seller, technically speaking, does not need to register their copyright because China is a member of the Berne Convention which means copyright protection is an automatic right granted to all member-nations of that agreement.
In the event of an infringement of a copyright, however, a seller with copyright protection derived only from the Berne Convention would have to prove their copyright by submitting the original work(s), translating complicated legalese, and notarizing documents, all from overseas. This process could potentially be very tedious, complicated, and costly. No seller wants their business interrupted in such a way. Therefore, the savvy seller will register his or her copyright in China under Chinese Copyright Law.
Anthony’s Breakdown: Registering for Copyright Protection in China, while not technically necessary, should be done as part of your protection plan. It will help to streamline the process of addressing infringers.
The easiest and most cost-effective way for a Seller to protect their products eligible for copyright protection in China is to get a signed Certificate of Registration from the Copyright Protection Center of China (“CPCC”).
The Chinese registration process is fairly straightforward. The following is a step-by-step process for online application for copyright protection in China.
1. The Seller goes to http://www.ccopyright.com/ (the CPCC’s website). Copyright.com is a Chinese-based website. If the Seller is not literate in Chinese, they should seek assistance from one who is; please contact our firm and we can provide the Seller with a translation. If the Seller wishes to proceed on their own, however, the Seller should access the website via google and use the translation link at the top of the page to translate a portion of the site into English.
2. The Seller sets up an account on the CPCC site. From the main page, the Seller clicks “Copyright Registration” which will bring the Seller to a new page.
3. If the Seller does not already have an account, he or she clicks on the link on the right-hand side of the “User Login” module underneath “forgot password?” A new page will appear where the Seller needs to fill out all the relevant information about his or her business.
4. The Seller returns to the page from Step 4 and clicks “I want to register.” The first link under the “Online business” module.
5. Depending on the type of copyright protection the Seller is seeking (see chapter two for descriptions of what type of protection is being sought) the Seller selects either “R11” (the blue arrow) for a computer software copyright and fills out the application form that drops down or selects “Z11” (the yellow arrow) for an application for a work’s copyright registration and fills out the application form that drops down.
6. The Seller prints the completed application form and sign/affix his or her seal onto the copy.
7. The Seller posts or hands in the registration files to CPCC
8. The Seller’s files are checked by CPCC. If approved, the Seller may continue to Step 9. If not approved, CPCC will inform the Seller as to the error(s) in the application.
9. The Seller pays the registration fee and receives the “Notification of Receipt of the Application.”
10. The Seller’s registration will be examined by CPCC. If approved, CPCC will issue the certificate for the newly-approved registration and make an announcement on their website to fulfill the final requirement of “public knowledge.”
(A) Preempting Common Copyright Registration Issues
Even after a Seller has properly registered for, and acquired, copyright protections in China, the copyright law of the country allows for twelve exceptions that will not violate someone’s copyright. Depending on what the Seller is selling online, some of these may be more or less applicable to the individual’s situation:
1. Personal use;
2. “Appropriate” quotation in order to introduce, comment on, or explain;
3. Use by the media to report current events;
4. Republishing or rebroadcasting another media source’s story;
5. Publishing/broadcasting a public speech;
6. Use as a scientific work for purely teach or research purposes;
7. Use by the government “to a justifiable extent for the purpose of fulfilling its official duties;”
8. Reproduction for public display, such as a museum or library;
9. A free live performance;
10. Copying, drawing, photographing or video-recording a public artwork;
11. Translation of a Chinese citizen’s work from Mandarin to a minority Chinese language, for distribution in China; and
12. Transliteration of a published work into braille for publication.
Sellers need to be aware of these exceptions to copyright protection. These are very similar to the American legal-system “Fair Use” exception.
While the process of registering for copyright protection is relatively-straightforward, the reality on-the-ground in China is a far different story.
A Seller can have all the proper registration but that will not necessarily stop China’s rampant copycat problem. In a recent undertaking by Slate, the magazine found that nearly 90% of all DVDs distributed in China were unauthorized copies. Statistics like this are common in China. Sellers should be aware that the country is routinely on the United States Trade Representative (“USTR”) “Priority watch list” for common intellectual property infringers. China appeared on this list as recently as the 2017 report.
Despite those realities, copyright protections in China are improving. Sellers should certainly still register their rights in the country.
China’s signing of the Berne Convention in 1992 was a recognition by the nation that they will meet the same minimum standards as many of the world’s other nations: Copyright protection shall be for the life of the author plus fifty years after their death.
The 2017 USTR report positively reported that:
• Positive statements by high-level Chinese officials on their goal to strengthen the nation’s intellectual property protections;
• Increased recognition of trade secrets as a form of intellectual property protection;
• A new law was drafted regarding e-commerce and submitted for review in December of 2016. New rules are expected to become law sometime in 2018.
(II). Registering for Trademark Protection in China
Sellers seeking to protect their trademarks in China have two options:
(1) to register under the international agreement the “Madrid Protocol” or (2) to register in China itself with the Chinese Trademark Office (“CTMO”).
While both options provide Sellers trademark protection, there are differences regarding filing ease and effectiveness of each method. Generally speaking, registering under the Madrid Protocol is easier while registering with the CTMO may give the Seller an edge in any future trademark disputes that may arise in China.
(A) Trademark Registration Via the Madrid Protocol
The Madrid System is an international agreement that allows persons to register their trademarks under different nation’s trademark systems through a single and standardized system. The allure of the Madrid System for the Seller looking to enter the Chinese marketplace is that the registration process can entirely the easy-to-use English-language WIPO website at http://www.wipo.int/madrid/en/.
Anthony’s Advice: For Sellers with a smaller operation or a non-Chinese speaking Seller, the Madrid Protocol offers a quick and practical alternative to filing trademark applications with the Chinese Trademark Office.
Breakdown of Madrid Protocol Trademark Registration
(1) Eligibility – registration under the Madrid Protocol merely requires that the Seller be a citizen of one of the 116 nations covered by the agreement. Checking eligibility should be the first step in the Seller’s process to registration.
(2) Brand Search – the WIPO website provides a user-friendly tool to search their international database of registered trademarks. The Seller should use this to preempt and prevent any future issues that could arise.
(3) Filing – the WIPO website provides a link to the 11-page registration document to file for an international trademark application.
(4) Cost – registration costs 653 Swiss Francs (approx. 679 USD) + country cost + nature of the mark + number of classes registered for. The website features a cost-calculator that a Seller can use even before registration begins to decide whether or not they wish to seek trademark protection.
(5) Monitoring – After the trademark application has been filed, the WIPO offers a useful monitoring tool for the Seller to watch their application as it moves along the approval process. It also gives the Seller the ability to monitor other similar trademark applications that may potentially be competing with theirs.
(6) Managing – finally, after a Seller’s application has been approved and registered as a trademark, sellers have the ability to monitor their trademark and tailor it with their changing business needs.
Reality of the Madrid Protocol
The Madrid Protocol is a great system but it is by not without its shortcomings. The greatest flaw with choosing to seek protection in China via The Madrid Protocol is that WIPO, rather than the Seller him or herself, files the trademark application with the CTMO. The CTMO then reviews the application for approximately eleven months. During this time, the Seller will have no contact with the CTMO. Therefore, if a trademark is not approved by the CTMO, the applicant will learn of the failed application only after, roughly, eleven months. The notice of the failed application will travel from the Chinese CTMO to WIPO and then WIPO to the applicant.
This system leaves the Seller without the ability to correct their application during the approval process while their application is with the CTMO. If denied by the CTMO, the Seller’s only option is to appeal this decision and file for an application review with the Trademark Review and Adjudication Board (“TRAB”).
Additionally, WIPO follows the international classification system for products: 25 International Categories. China has hundreds of sub-categories. If you leave a category out, the presumption in China is against having any rights.
(B) Trademark Registration Via the CTMO Directly
A Seller may choose to register their trademark domestically with the CTMO. While not as “one size fits all” as an application via the Madrid Protocol, registering directly with the CTMO has significant advantages.
(1) Registration via CTMO is faster. Registration via the CTMO renders a decision within nine months of filing. Registration under the Madrid Protocol takes twelve to eighteen months.
(2) Registration via CTMO may be “safer.” On top of registration being simply faster with the CTMO, it is also, in a way, more secure. If a seller chooses to file via the Madrid Protocol, “it is not unusual that the CTMO does not input right away into its system the data received from WIPO about international trademark extensions.” This means, that an internationally-submitted trademark application could potentially be filed after a domestically-submitted trademark application. That domestic application would then be approved, registered, and begun to sell products under that trademark before the WIPO trademark, that was submitted first, had a chance to be registered. Therefore, despite China being a “first to file” district, the domestically-filed application may have the upper hand in a trademark dispute with the international-registrant who submitted their application first.
Additionally, if a Seller files in China’s CMTO directly, she can choose all of China’s sub-categories that the Seller seeks protection.
CJ’s Summary: When you file with the CTMO, your application is both approved more quickly and filed directly with the source. Even though a Madrid Protocol application may be simpler, it puts a middleman between sellers and the people reading your application. This gives the people over at the CTMO the opportunity to put internationally-filed applications on the “back burner” for a while; in the world of trademark applications, every second counts. Also, it is better to have proper sub-categories in China. This is especially true in light China’s presumption against rights.
Breakdown of a CTMO Trademark Registration
As a warning to the Seller looking to file their application with the CTMO, it is strongly recommended that the Seller seeks legal advice from attorneys experienced in Chinese trademark application. In addition to the application being in Mandarin, a trademark application may be rejected for a series of cultural reasons. Because of that, there are many products that would be approved and many other countries but not in China because of China-specific aversion to such trademarks for cultural reasons.
CJ’s Side Note: A Chinese trademark application is equal parts legal jargon and Chinese culture. If you are looking to file for trademark protection in China, we strongly recommend you seek experienced legal help in China.
Trademark law in China is governed by the Chinese Trademark Office. First and foremost, when a Seller is seeking to register their trademark in China they must first determine the “class of goods” that their product is, in accordance with Article 19 of the Trademark Law of the People’s Republic of China.
The Chinese trademark office has an extremely wide range of good classifications; thirty-four in total. Some examples of these categories are: chemicals, paints, laundry items, industrial oils, pharmaceutical tools, common metals, machine tools, hand tools, surgical equipment, lighting apparatus, vehicles, firearms, musical instruments, etc. Each category, furthermore, has sub-categories that must be properly selected. A Seller’s failure to select the proper classification for their product they are seeking trademark protections for can result in an automatic rejection of said trademark or a lack of protection in the sub-categories where no application was filed.
Even after successfully filing a trademark application under the proper goods-category and subcategories, the application process is not over. Those inspecting a trademark application at the CTMO look for any one of the eight possible reasons to reject a trademark application under Article 10 of the Trademark Law of the People’s Republic of China.
Reasons for rejection of an application are:
1. Identical or similar to a Chinese state name, national symbol, flag, emblem, etc.;
2. Identical or similar to a foreign nation’s state name, national symbol, flag, emblem, etc.;
3. Identical or similar to an international bodies’ name, national symbol, flag, emblem, etc.;
4. Identical or similar to official signs and hallmarks;
5. Identical or similar to the symbols or names of the Red Cross or the Red Crescent;
6. Those having the nature of discriminating against any nationality;
7. Those having the nature or exaggeration and fraud in the advertised goods;
8. Those detrimental to socialist morals or customs or having other unhealthy influences.
Sections 1-8 of Article 10 clearly give the CTMO a wide range of discretion when analyzing a trademark application.
No section gives a wider, and potentially more confusing, range of discretion than section 8, which says that a trademark may be rejected for having “unhealthy influences” on Chinese society.
While other nations such as the UK, Germany, and Japan have similar provisions in their trademark laws, none of those nations are socialist countries or steeped in the particularly unique Chinese cultural history. Because of this, it is very easy for a trademark applicant to inadvertently offend socialist or cultural ideals in the eyes of the CTMO.
Furthermore, the CTMO does not need to provide any proof or concrete examples of actually how your trademark application would have negatively influenced the people of China. Whether the Seller meant to offend or negatively influence a group of people within China is irrelevant. If the CTMO feels that your trademark application does that in some way, they will reject your trademark application.
Anthony’s Breakdown: Section 8 is purposely broad and vague. It allows the CTMO to have the ability to reject your trademark application for a seemingly endless range of reasons, and to do so at their own discretion with no proof. Practice makes perfect with filing a trademark application; any Seller looking to do this should seek out attorneys both with experience in filing these applications and an understanding of Chinese culture.
If an application is rejected by the CTMO, the applicant has the ability to file an appeal with the Trademark Review Adjudication Board (“TRAB”). This book addresses TRAB appeals in Chapter Five. In essence the applicant must successfully-allege to the board that the objectionable portion of their application won’t be realized by the Chinese people.
(III). Registration for Patent Protection in China
First and foremost, in order to have patent protection in China, the patent application MUST be filed in China.
The State Intellectual Property Office of the People’s Republic of China (“SIPO”) is responsible for patent application and approvals. Unlike with copyright or trademark protection, there is no international agreement that can act as an alternative; even if an individual has patent protection under another nation or under an international agreement, the SIPO must still approve the patent for it to be applicable in China.
Anthony’s Advice: Because the patent application process is so complex and requires a
domestic-application, we highly recommend that a patent applicant seek the help of
attorneys experienced in filing these applications in China.
Breakdown of Filing for Patent Protection Under the SIPO
Step 1) Determine What Kind of Patent You Seek
As outlined in chapter two, China recognizes three main types of patents:
1. Invention patents;
2. Utility model patents;
3. Design patents.
This is the first and an extremely crucial step in beginning the patent application process. The protections provided to a design patent, for example, will not provide the type of protections that a registrant will want if what they are actually seeking is an invention patent.
Step 2) Determine How You Will File Your Application
There are three different routes one may take when filing for patent protection in China, they are: (a) Direct Route, (b) Paris Route, and (c) Patent Cooperation Treaty Route.
All three options for registration have their benefits and drawbacks. Each route’s merits should be carefully considered before an individual selects their method of patent application.
Direct Route – filing directly in China. If a seller is a foreign national and file directly in China, you are required to hire a local patent agency to handle the filing of the patent. The exception to this rule is that Foreign Investment Enterprises (“FIE”) are permitted to apply for patents without a licensed patent attorney.
The benefit to filing directly in China is that there is the lowest chance of your patent application getting “lost in translation.” In other words, the SIPO requires all patent applications to be written in Mandarin. If the Seller is a foreign national registering for a patent, he or she will be required to hire a local Chinese patent office. One of the biggest problems with English to Chinese patent applications is that inaccurate translations can lead to rejected applications or patent application challenges further down the road.
The drawback to filing an application directly in China, especially for most non-Chinese readers of this book, is that sellers will have to work remotely with their attorneys.
Paris Route – initially filing a patent in a foreign country and then filing the patent in China. The patent applicant may choose this path so long as the nation they first filed the patent application in is a member of the Paris Convention. The Paris Convention has 177 member-nations with the entirety of North America, South America, and Europe as contracting members.
The benefits to the “Paris route” include that previously-filed patents can be transferred over to China and used in the Chinese marketplace. The benefits, however, end there. As previously mentioned, one of the most common issues with patent applications in China comes from errors in translating a patent application in English or another language into Chinese. Furthermore, filing for a patent in this style has strict timeline deadlines that certainly require legal expertise.
Just for example, approval of a utility patent in another country requires a patent application be filed in China within 12 months of filing the initial patent; approval of a design patent in another country requires a Chinese-equivalent application be filed only six months after filing of the initial patent. These are very short deadlines. A filer should certainly have assistance from a patent attorney experienced in Chinese IP law.
Patent Cooperation Treaty Route. The Patent Cooperation Treaty (“PCT”) is an international patent treaty agreement with 152 contracting states. This route entails the two-step PCT process: (1) filing an international patent application under the PCT and (2) selecting China as the designation state for registration during the national patent application phase.
There are numerous benefits to the Patent Cooperation Treaty Route. The forms can be filed online in the applicant’s native language, and fees are charged electronically through the WIPO. This makes the process simpler, easier, and more cost-effective than either the Direct or Paris Route. Furthermore, after the international phase of the registration process, more than one nation can be selected for the nation phase, potentially allowing the filer to gain patent protection in multiple countries.
Anthony’s Advice: Do not be fooled by our surface level explanations overview-explanations of these systems; patent applications can be a very tricky process. Most application routes require an attorney to file the application but even in cases where an attorney is not required it is highly recommended that you retain one. Even if a patent is filed outside of China, the application will be translated into Chinese. Any imperfections in a translation can doom an application from the start. For a safe, secure, and sound patent, seek legal counsel.
Chinese IP Law: Chapter 3 – Conclusion
Whether in the United States or China, the best way to solve an intellectual property issue is to prevent the problem before it occurs. Registering for copyright, trademark, and patent protection in the country where a seller wishes to do business is the first-line of defense against infringement claims. Whether through Chinese national offices or international agreements, having a properly-registered copyright, trademark, and patent helps to should be seen as an investment in a sellers’ businesses future; these registrations will help to keep a seller’s business productive and profitable.