[Jian Xu] IP holding company in China

Is an IP holding company desirable and, if so, whether it should be based in China or elsewhere (taking into consideration legal and tax issues)?

1. Legal structure of the IP holding company

As intellectual property rights are one of the most important business assets, it is advisable to have full control of the IP holding company. Thus, for the purpose of holding all Chinese IP, the legal structure of the IP holding company should be a WOFE (Wholly Owned Foreign Enterprise) in China under full control of the parent company.

2. Pros and Cons of the IP holding company

[Jian Xu] Chinese character trade marks

As the Chinese economy continues to grow fast, so does the number of foreign businesses trying to secure their place in the Chinese market. The more sophisticated those foreign businesses are, the more sophisticated their ability to protect their intellectual property rights. Or so you might think. There have been quite a number of high-profile disputes in the Chinese courts which have proved to be extremely damaging to various universally known brands. These cases concern the registration of Chinese language and Chinese character trade marks, translated from the English or European language trademarks of various international brands, such as Viagra, Hermès, Land Rover, and even the name of Michael Jordan.

[Jian Xu] Notes on partial designs in China

“Partial Design” refers to the designs of shape, pattern and orientation relationship on some part of the product, rather than the designs of elements and components which constitute the product.

Under current practice, a partial design is not allowable in China. Designs of the elements and components which can be customarily sold independently in the market or between industries shall require protection as independent applications.

Dashed lines are frequently used in partial designs. However, they are not allowed to be used in design patents in China. If the basic application of priority is a partial design application and dashed lines are used to show unclaimed parts, the applicant may remove the dashed lines or change them into solid lines. According to current provisions, such amendments will not affect the priority right. To be prudent, it is advisable to submit a set of the drawings identical to those in the priority application as a set of reference views in the state of use.

[Jian Xu] Pragmatic anti-counterfeiting by risk/benefit analysis in China

Despite countless reasons and varieties of counterfeiting, the infringer's activity boils down to only one thing: Risk/Benefit Analysis.

"What are the risks of continuing counterfeiting" vs. "What are the benefits of continuing counterfeiting".

The lawyer's job is to make the infringer's counterfeiting activity sufficiently risky that the counterfeiter has no incentive to continue, or that they switch to other businesses not affecting the lawyer’s clients.

How can the lawyers make the infringer's counterfeiting activity sufficiently risky?

[Jian Xu] Establishing copyright ownership in China

Copyright arises automatically, but it may not be easy to prove ownership of copyright in China. For some manufacturing companies, it might be possible for their products to be protected by copyright under the category of practical art. This gives another tool for enforcing their IP in China. The applicant may consider submitting the following evidence to establish ownership of copyright:

1. A original photo of the product (if it is a film photo, the film and the printed photo should be submitted; if it is a digital photo, the photo stored on the disc should contain the relevant data showing information, such as the date, size, etc.; if the photo has been edited by using certain photo editing software, both the original photo and the edited version should be submitted);

[Jian Xu] Letter of consent relating to trade marks in China

Following an internal meeting in October 2007, the Trade Mark Review and Adjudication Board (TRAB) concluded that they would consider the following when dealing with a letter of consent:

• Similarity of marks and goods - a letter of consent cannot overcome a citation if the respective marks and goods are identical or very similar. The situation is different if the trade marks and goods are only moderately similar (even though such similarity would result in rejection of the application under normal circumstances).