China’s Supreme People’s Court recently released for public consultation the drafts of four judicial interpretations relating to intellectual property. While three of the interpretations clarify important issues such as passing off and trade secrets and are therefore generally regarded as welcome, the draft on conflicting IP rights could pose serious obstacles for judicial enforcement in cases of rights hijacking.

IP rights are generally territorial in nature. They are recognised and protected in a country only if they are registered in that country. For trademarks, the goods and services on which they are used are also divided into classes and registration of a trademark in one class generally cannot stop other people from registering the same trademark in another (except for well-known trademarks).

Unscrupulous individuals see this double territoriality as an opportunity to free-ride on the reputation and goodwill of other people’s trademarks and designs, and register where the rights-holders fail to secure protection. This is a form of hijacking and in general is not prohibited.

In China, administrative proceedings can be initiated to have hijacked trademarks and designs cancelled or invalidated by the relevant authorities. But this is usually time consuming. For example, with the current workload of the Trademark Review and Adjudication Board – the body responsible for trademark cancellation – it now takes at least five years to have one hijacked trademark cancelled, and prior to that the trademark is considered valid. If judicial proceedings are initiated by the legitimate rights holder, the defendant will inevitably point to the fact that his trademark is valid and subsisting. The validity of the trademark is often a determining factor in whether successful actions can be taken against an alleged infringer.

The draft judicial interpretation does not resolve the problem. On the contrary, it provides that in the case where a civil infringement claim is filed for a registered IP right, the Chinese courts should reject the claim until the plaintiff has first cancelled or invalidated the underlying registered IP right through administrative proceedings.

This interpretation is probably a breach of China’s international treaty obligations, under which it must put in place effective enforcement procedures against any act of IP rights infringement, including expeditious remedies and deterrents. China also has to make civil judicial procedures available to rights holders.

The draft judicial interpretation as it stands can hardly be regarded as effective protection. More important, enabling the Supreme People’s Court to abdicate any decision on similarity of IP rights to relevant administrative bodies clearly denies the availability of civil judicial procedures to IP rights holders.

The writer is consultant with the IP Group at Lovells’ Beijing office

Get alerts on IP Group PLC when a new story is published

Copyright The Financial Times Limited 2022. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Comments have not been enabled for this article.

Follow the topics in this article