IP Update/Spring – Summer 2013
ReMarks
In this issue 1 Life Sentence for Counterfeiter in China / Developments in the Chinese Trade Mark Classification
System 2 Patent Box – Patents Paying for Themselves? / Unified Patent Court Given the Green Light / Marks & Clerk
France Expands South / Marks & Clerk Opens Office in Edinburgh BioQuarter 3 Patent Prosecution Highway in Canada
– Watch Out for Those Speed Traps! / Croatia joining the EU – Implications for IP / Anticipating the Threat from Domain
Name Squatters – the Trademark Clearinghouse 4 Commercial Contracts – Pitfalls to Avoid / Leading ISPs Required to
Block Access to P2P Websites
Life Sentence for Counterfeiter in China
In August of last year, Xiao Zhenqiang
(肖振强), a Chinese maker of fake
French luxury Hermès handbags,
was sentenced to life in prison for the
Crime of Production and Sale of Fake
and Substandard Commodities. Xiao
established two factories in China’s
southern province of Guangdong, from
which around 4,000 fake Hermès bags
were seized with a value of 100 million
CNY (US$16 million).
cases. However, Xiao’s sentence was
unprecedentedly harsh. Typically,
counterfeiters receive a sentence for the
Crime of Counterfeiting a Registered
Trade Mark, if brought before a criminal
tribunal, of no more than seven years
unless guilty of manufacturing fake
pharmaceuticals, or other
potentially human health-impacting
products.
A verdict was reached under Article
140 of the Criminal Law of the PRC,
which stipulates that a life sentence can
be handed to counterfeiters in certain
Many have interpreted Xiao’s sentence
as a sign that China intends to accord
greater emphasis to the protection of IP
rights, which has been borne
out in the latest draft of China’s
Trade Mark Law, released at the end
of last year. In it, the definition of
counterfeiting has been widened to
include facilitating infringement, the
maximum statutory compensation for
infringement has been increased to 1
million CNY (US$160,000) and under
certain circumstances, the burden of
proof in an infringement case has been
switched from the victim to the infringer.
Xuefang Huang
[email protected]
Marks & Clerk, Beijing office
Developments in the Chinese Trade Mark Classification System
As of January this year, the China Trade Mark Office
(“CTMO”) is accepting registration of trade marks for “retail
or wholesale services of preparations for pharmaceutical,
veterinary and sanitary purposes and medical articles”, but
only for applicants that hold licenses to sell pharmaceuticals
or whose business scope expressly covers such services.
Until now, the CTMO has not accepted the term “retail and
wholesale services” in any context in Class 35, which covers
advertising, business management, business administration
and office functions. Instead, applicants have had to resort
to registering marks using standard wording from the CTMO
Classification Guide that may not appropriately describe the
services e.g. “sales promotion for others”.
With the new measures, traders whose services include the
retail or wholesale sale of the above-mentioned goods, either
online via the internet or through conventional retail outlets,
may specifically apply to protect their marks for the sale and
distribution of these goods.
At this time, the new measures do not apply to retail
or wholesale services relating to any other types of
goods. Although there are as yet no scheduled changes
in this regard, it might be reasonable to expect further
developments in the next few years.
In China, prevention is always better than cure, and so
eligible applicants are encouraged to apply to protect their
trade marks for the new Class 35 services as soon as
possible.
Cynthia Houng
[email protected]
Marks & Clerk, Hong Kong office
2
Marks & Clerk
France Expands
South
Marks & Clerk has opened a second
French office in Sophia Antipolis, south
west of Nice, to increase territorial
coverage for its clients in the south
of France. An important technology
and business centre, renowned for
innovation particularly in the digital
arena, Sophia Antipolis hosts more
than 1,400 organisations specialising
in scientific research, new technologies
and multimedia.
The new location is also part of a move
to reinforce Marks & Clerk France’s
footprint in the software industry. To
meet the needs of its growing practice,
two new attorneys with industry
experience in the digital arena have
been recruited in the new office.
Christian Nguyen-Van-Yen
[email protected]
Marks & Clerk, Paris office
ReMarks
IP Update/Spring – Summer 2013
Patent Box – Patents Paying for
Themselves?
The traditional patent cost-benefit
assessment is changing. Whilst the
benefit of many patents is often made
up of sometimes difficult to measure
intangible benefits, the immediate
and direct financial benefit will soon,
for many products, far outweigh the
financial cost.
From April the UK Government’s
so-called “Patent Box” has begun to
be phased in. Whilst the Patent Box
calculation isn’t always straightforward,
the results are – any profits a UK
company makes on a product
protected by a patent are, if opted in to
the Patent Box, subject to a reduced
rate of corporation tax. When the
phasing-in is complete the reduced
rate will be 10%. With such tax savings
available your patents could quickly pay
for themselves.
For new products therefore, now more
than ever, it's worth considering what
aspects it might be possible to protect
with a patent.
Furthermore, if any part of the product
is protected, then profits from the
whole product can benefit from
the Patent Box. As such, a review
of what products are covered by
existing patents is likely to be time
well spent. This also means that new
developments to the product that can
be protected can qualify the whole
product for the Patent Box.
David Robinson
[email protected]
Marks & Clerk, Manchester office
Unified Patent
Marks & Clerk Opens Court Given the
Office in Edinburgh Green Light
BioQuarter
19th February 2013 marked
Earlier this year, Marks & Clerk opened
a new office in Europe's fastest-growing
academic medical centre, located three
miles south east of central Edinburgh:
the Edinburgh BioQuarter. Announced
by Scottish First Minister, Alex Salmond,
at the launch of three new occupancies
on the campus, the opening attracted
widespread publicity.
The Edinburgh BioQuarter campus
already hosts a wide range of cuttingedge facilities, making it a leading
European destination for translational
medical research conducted by both
large and small businesses. It will allow
Marks & Clerk Scotland to extend its
reach into the life sciences start-up and
SME community in the Edinburgh area.
Paul Chapman
[email protected]
Marks & Clerk, Edinburgh office
a major milestone for the
European patent, as almost all
of the European Union member
states signed an international
agreement for the creation of the
Unified Patent Court (“UPC”).
This agreement, in conjunction with two EU regulations that were passed last
December, will enable the European Patent Office to grant “unitary patents” –
single patents that cover the whole of the European Union, except for Poland and
Spain, which did not sign up to the agreement.
Ultimately, the UPC will have exclusive jurisdiction over unitary patents, existing
and future European patents that are in force in participating member states and
supplementary protection certificates issued for a product protected by such
patents. A decision from the UPC on infringement or validity – and associated
injunctions – will then have effect Europe-wide, rather than just in a single country.
The earliest date on which the European Patent Office can grant unitary patents is
1st January 2014 but it is likely that it will take longer than this for ratification of the
agreement to be completed and for the necessary administrative machinery to be
in place.
Graham Burnett-Hall
[email protected]
Marks & Clerk Solicitors, London office
ReMarks
IP Update/Spring – Summer 2013
Patent Prosecution Highway in Canada –
Watch Out for Those Speed Traps!
Canada offers a voluntary expedited
prosecution program (PPH) that
advances patent applications to
the front of the examination queue.
However, to qualify for the program,
the application can only contain claims
that sufficiently correspond to the
claims considered allowable by another
approved patent office, known as the
Office of Earlier Examination (OEE).
Claims sufficiently correspond to one
another if they are of similar or of
narrower scope, and are of the same
category.
Consider a situation where the OEE is
the USPTO and, due to a restriction
requirement, process claims were
deleted, leaving only apparatus claims.
Any PPH application in Canada can
only include those allowable apparatus
claims. A divisional application filed to
cover the process claims may be at risk
of a double-patenting rejection.
Also, there are differences in how
structural limitations in claims
are interpreted in Canada. These
differences often require the claim
language in Canada to be rephrased in
order to obtain the equivalent protection
as in the US.
Finally, applicants must also note that
there are additional claim categories
available in Canada that are not
available in other jurisdictions, such as
“use” claims.
It may be more beneficial to request
expedited examination under Section
28(1)(a) of the Patent Rules, under
which examination may be advanced
on the request of any person on
payment of the applicable fee if failure
to do so is likely to prejudice that
person’s rights. This latter provision is
interpreted very broadly.
Hetal Kushwaha
[email protected]
Marks & Clerk, Ottawa office
Croatia joining the EU – Implications
for IP
Croatia's 2003 application for EU membership has finally received the stamp of
approval and it will become the 28th Member State on 1st July 2013.
The important consequence of EU expansion for the IP community is that new and
existing Community Trade Marks (CTMs), as well as Unregistered and Registered
Designs (RCDs), will automatically extend to Croatia with effect from this date.
Applicants will not need to take any action or pay an official fee to secure this
extension of their rights. It should, however, be noted that if a CTM was filed
between 1st January 2013 and 30th June 2013, it remains subject to oppositions/
invalidity actions, based on earlier rights in Croatia acquired in good faith.
Esther Gottschalk
[email protected]
Marks & Clerk, Oxford office
3
Anticipating the
Threat from Domain
Name Squatters –
the Trademark
Clearinghouse
The new generic top-level domain
(gTLD) program, which the Internet
Corporation for Assigned Names and
Numbers (ICANN) is due to launch
in the second half of 2013, has been
created to increase competition and
choice in the domain name space. It will
allow domain names to be registered
which do not relate to a specific
geographic location or country (e.g.
.com.au), but to specific keywords (e.g.
.music) or even specific brands (e.g.
.amazon).
The expansion of the domain name
space means that trade mark infringers
and domain name squatters may
have more opportunity to file abusive
registrations and infringe trade mark
rights. The Trademark Clearinghouse
(TMCH) has been created in anticipation
of this and will serve as a central
repository of trade mark information.
Trade mark owners are allowed to
submit their trade mark information
into the centralised database. If an
application is submitted for a new
gTLD which matches a trade mark
recorded on TMCH’s centralised
database, the applicant will receive a
notification from ICANN. If the applicant
decides to proceed with the registration
for the gTLD, ICANN will notify the
relevant trade mark owner in order to
take appropriate action against the
applicant, should they wish to do so.
In the UK, Marks & Clerk is one of the
few agents authorised to manage the
registration of trade mark rights in the
TMCH on behalf of brand owners.
All enquiries should be directed to
[email protected].
Jorandi Daneel
[email protected]
Marks & Clerk, Manchester office
4
ReMarks
IP Update/Spring – Summer 2013
Commercial Contracts – Pitfalls to Avoid
Parties entering into commercial
contracts, often seemingly mundane
ones, can make serious mistakes which
subsequently come back to haunt
them.
Many people think there is no need
to formalise a contract in writing,
merely relying on an informal, verbal
arrangement. Some agreements
(particularly IP-related ones) must be
in writing to take legal effect and, even
if a verbal arrangement does give rise
to a legally binding contract, there is
ample scope for confusion if there is no
written record of who is meant to do
what and what will happen if anything
goes wrong. If a dispute arises under
the contract and the parties' obligations
and remedies are not written down
in black and white, the court will
have to rely on verbal evidence and
recollections, which may differ widely,
making dispute resolution difficult.
Parties should seek legal advice in
drafting and negotiating a contract,
which will ensure wording is
unambiguous and certain questions
are answered: Have all the eventualities
been covered? Can the company
actually meet its contractual
obligations? Does it have satisfactory
remedies if the other side is in breach?
Does the agreement comply with the
relevant laws and regulations?
have a good relationship, they may later
fall out and end up in costly litigation.
Defective or onerous contracts can also
be a deterrent to potential investors and
merger partners.
Simon Portman
[email protected]
Marks & Clerk Solicitors,
Cambridge office
Without a solid contract, even if both
sides are sure of what they want and
Leading ISPs Required to Block Access to P2P Websites
A recent decision of the UK High Court
shows that the courts are continuing
to take active steps to protect rights
owners in relation to online copyright
infringement.
copyright works by downloading online
media content without the consent of
the copyright owners.
copyright owners outweighed the right
of freedom of expression of the users
and operators of the websites.
In an action brought by members of
the British Recorded Music Industry,
the court agreed to grant an order
forcing the six main retail internet
service providers in the UK to prevent
their subscribers from accessing three
websites (KAT, H33T and Fenopy)
which allowed users to infringe
copyright in music recordings and other
The court recognised that an injunction
against the website operators would
be ineffective due to the ease with
which such websites could be quickly
resurrected in other jurisdictions. It
therefore ordered the service providers
to utilise mechanisms already available
to them to prevent their subscribers
from accessing the websites in
question. The court took the view that
the intellectual property rights of the
Remarks is a quarterly newsletter produced by Marks & Clerk LLP.
Articles featured are intended to provide a summary of the subject
matter only. Readers should not act on any information without first
obtaining specialist professional advice.
Marks & Clerk Group | UK offices: Aberdeen Birmingham Cambridge
Edinburgh Glasgow Leicester London Manchester Oxford
International offices: Australia Canada China France Hong Kong Luxembourg
Malaysia Singapore | Law firm: Marks & Clerk Solicitors LLP
Copyright Marks & Clerk LLP, June 2013
www.marks-clerk.com
This decision shows that the courts are
willing to take a pragmatic approach in
relation to online copyright infringement,
thereby providing further reassurance to
copyright owners that their rights will be
recognised and enforced.
Michael Shaw
[email protected]
Marks & Clerk, Manchester office