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China
- IPL Improvements
The first
improvement was a decision by the Beijing Intermediate People's
Court imposing liability on the landlord of the Silk Market.
The second was the issuance of a drat interpretation by the Supreme
Court on unfair competition that introduced guidelines on the protection
of trade secret. However another draft interpretation was
on the handling of trade mark cases which was a retrograde step
as it prevents courts from hearing actions regarding conflicting
registered marks until the Trademark Office issues its own decision.
Landlord
liability:
In September
2005, five vendors in the shopping mall filed a lawsuit with Intermediate
People's Court against the landlord of Silk Market based on the
liability under the Trademark Law. In order to establish liability
the brand owner purchased counterfeit products in April 2005 and
then sent a warning letter to the landlord of the Market not to
sell the counterfeit products. However, in order to show that
counterfeit s were still for sale in the market, they made another
purchase in May 2005. Generally, it is the practice to take
legal action against the vendors who willofully had taken the risk
of selling counterfeits, but on December 2005, the court handed
down a decision in favour of the brand owners holding the landlord
and the Silk Market jointly liable for selling counterfeits
and pay the brand owners' damages on the ground that the landlord
had not taken appropriate steps to stop the sale of counterfeit
merchandise by five vendors and ordered to pay damages. One
of the problems is that penalties are light against the stall holders
and that they are always willing to take the risk of selling counterfeits.
Yet landlords in such markets are collecting rent despite being
clearly aware that counterfeits are for sale on the premises.
The importance of this case is that this send a message to all landlords
in China that they cannot blindly lease their premises to tenants
without taking responsibility for their actions.
Trade
Secrets:
China lacks
in effective trade secrets law - the Anti-Unfair Competition Law
and the Criminal Law, which contain provisions on trade secrets.
Whereas criminal action can be effective but it can be difficult
to get the Public Security Bureau to take on such cases, the Anti-Unfair
Competition Law provides only general guidelines for trade secret
actions. Therefore an interpretation issued by the Supreme People's
Court has addressed many of these problems defining trade secrets
provisions for reversal of burden of proof when a prima facie case
of misappropriation is demonstrated and methods for calculating
damages when a breach is proven.
Conflicting
Trade Marks:
In another
draft interpretation, the Supreme Court stated that when there is
a dispute over registered trade marks, courts should not handle
such cases but should wait for the dispute to be resolved by the
Trademark Office first. This is a worrying interpretation
since Trademark Review and Adjudication Board (TRAB) take more than
four years to make decisions in this respect. If somebody
manages to register a trademark used by another party, this judicial
interpretation means that the complainant will not be able to take
legal action until TRAB issues a decision. This is a breach
of TRIPs Agreement under its Article 41.1 and 42 which provides
that China is required to provide effective remedies for trade mark
infringement. However, a number of companies are considering
challenging this interpretation in court which should hopefully
see it reversed.
For any
queries relating to our services and costs, please feel free to
contact us at info@iprfirm.com.
IPR
FIRM.COM - Online IPR Law Firm, India – Trade Marks, Copyright Registration,
Delhi, India
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