The country's trademark watchdog has stepped up its efforts to improve the administration of trademarks, protecting their exclusive rights of use and maintaining the reputation of well-known brands.

The State Administration for Industry and Commerce (SAIC) and its local branches conducted a nationwide campaign from mid-July to September, targeting trademark violators.

The campaign has cracked down on more than 7,770 trademark violations and shut down around 1,150 factories and workshops which made fake products.

Special efforts have been made in seven areas where large amounts of counterfeited products are sold -- Beijing and Shanghai municipalities, Zhejiang, Jiangsu, Shandong, Guangdong and Fujian provinces.

Industrial and commercial administrations have harshly dealt with infringements involving products such as foodstuffs, drugs and agricultural materials that are closely related to public safety and health.

Law enforcement officers have seized a number of counterfeit products related to domestic famous brands including Great Wall, Wuliangye, Tsingtao, Yili and Jianlibao.

Apart from fake domestic brand-name products, a number of counterfeits of foreign famous brands including Nike, Boss, Gucci, Louis Vuitton, Adidas, Samsung, Honda, Bosch, Polo, Sony, Burberry, Lancome, Playboy and Panasonic were also seized.

For example, the Beijing Industrial and Commercial Bureau has taken steps to ensure trademark protection at Xiushui Street (Silk Alley), Yaxiu, and Hongqiao, some of the shopping areas in Beijing that are popular with foreigners.

The Beijing authorities have suspended 40 stands in the capital's Hongqiao Market which sold fakes with famous foreign trademarks. Any shops or stands that sell Louis Vuitton, Givenchy, Fendi, Chanel, Burberry and another 20 foreign trademarks will be regarded as trademark violators and seriously punished.

A hotline -- 12315 -- has opened to the public to report trademark violations.

According to statistics from the SAIC, local authorities checked more than 80,000 shops and stands in more than 27,660 markets across the country by mid-September. Officials have discovered 1,493 foreign-related trademark violation cases and seized more than 2 million counterfeit products.

Officials have also confiscated around 6.5 million fake foreign trademark labels which are ready for use on counterfeit products and 10,000 items of equipments to make fake trademark labels.

Trademark matters

Since the country joined the World Trade Organization (WTO) three years ago, China has revised its trademark laws and regulations to bring them more in line with WTO rules and to provide companies with a better business environment with regard to intellectual property protection.

China employs a centralized trademark registration system. The Trademark Office within the State Administration for Industry and Commerce is responsible for the registration and overall administration of trademarks.

The local administrations of industry and commerce have established trademark offices to handle local trademark administration and enforcement.

The Trademark Review and Adjudication Board under SAIC is responsible for handling trademark registration disputes.

China employs a "first-to-file" system for trademark registrations, rather than the "first-to-use" system generally adopted in countries such as the United States.

China's requirements for obtaining a trademark registration are basically the same as those in most countries, namely, the trademark must be distinctive, and must not conflict with an existing registration.

The Trademark Office has a centralized database of all registered or applied-for trademarks.

A trademark application which passes the preliminary screening will be published in the Trademark Office's gazette for public objection for a three-month period.

Leeching on well-known trademarks

According to China's Regulation for Evaluating and Managing Famous Trademarks, famous trademarks refer to those registered trademarks that are well-known to certain groups of people and have a higher fame on markets and, therefore can enjoy both administrative and judicial protection in China.

In China, SAIC is responsible for evaluating famous trademarks.

Holders of domestic and foreign famous brands can apply with SAIC for protection. Brand holders could also appeal to court for recognition of their famous status.

 Corporation names, however, are regarded as a separate intellectual property, and are approved by corporation registration offices under SAIC.

"Technical problems and system differences between the trademark and corporation registration procedures have created an obstacle in trademark protection," said Zhang Ming, an official with the Corporation Registration Office under SAIC.

There are more than 4,000 corporation registration stations across the country.

Currently, the databases of all these stations are not linked nationwide, which makes it hard for registration officials to spot trademark infringements when dealing with an application for corporation registration.

"To prevent companies from registering using the similar names of famous trademarks, a well-known corporation and trademark database needs to be established as soon as possible," said Lu Pushun, secretary-general of China branch of the International Association of Intellectual Property Rights Protection.

The loophole in trademark and corporation registration procedures has sparked a conflict between trademarks and the names of corporations, yielding a group of companies which lean on well-known trademarks as cash cows, said Liu Min, an official with the Fair Trade Bureau under the State Administration of Industry and Commerce.

"The administration has cooperated with other government departments to tackle this hard rock and tried to protect famous trademarks," Liu said at a seminar on intellectual property rights protection in Beijing in late November.

Organized by China Industry and Commerce News, the seminar focused on stopping businesses from registering trademarks or company names similar to brandname trademarks or products.

Experts taking part in the seminar exposed the actions of dishonest companies which had taken advantage of famous trademarks by trying to copycat the brand names.

Some misleading trademarks are reproductions, imitations or translations of well-known trademarks, creating confusions among consumers, officials said.

Some companies even registered other famous trademarks as their corporate names on the Chinese mainland and highlighted the company names when selling their own goods to mislead consumers.

Some companies registered famous trademarks as their corporate names overseas and sell goods on the Chinese mainland in the name of the entrusted companies of those famous brand names.

SAIC has received an increasing number of complaints on unfair competition using others' famous trademark as corporate names, Liu said.

Different departments under the administration, including the Trademark Office, the Corporation Registration Office, the Fair Trade Bureau, Foreign Corporation Registration Office and Law and Regulation Department, have made joint efforts to crack down on dishonest companies which leaned on well-known trademarks.

The administration has been working with judicial departments and courts to establish a unified standards to deal with the trademark violation cases.

The Supreme People's Court is preparing to issue a judicial interpretation on trademark and corporate name conflicts, enabling registered trademarks or corporations to own two or more formally legal intellectual rights.

The Supreme People's Court has made a draft on guidelines of intellectual property right disputes over conflicted rights.

Hailing the principles of honesty and credibility, protecting the first to file and fair competition, courts at all levels have been urged to carefully define the parties' legal rights in trademark and corporation name conflicts.

Before the launching of the draft guidelines, many local courts have accumulated rich experience in handling intellectual property rights cases.

Courts at different levels in Central China's Hubei Province have heard more than 100 unfair competition cases in the past six years, including 29 cases of well-known trademark imitation cases.

The High People's Court in East China's Jiangsu Province have heard 21 cases of second-instance intellectual property rights conflicts, including eight cases of conflicts between trademarks and corporation names.

Above all, the fundamental task in protecting trademark rights is to prevent trademark infringement in advance through stricter and more scientific registration measures, said Zhang.

Zhang said his office will study corporate name management and has tried to input well-known trademarks into their system to prevent companies from registering under others' famous trademarks.

To better protect famous trademarks, a standard national bulletin platform will soon be launched to provide more information to related companies and help improve their awareness of trademark protection, Zhang said.

Sheng Jiemin, a law professor from Peking University argued that more laws and regulations need to be made to better protect intellectual property rights.

"The amendment to the present Anti-Unfair Competition Law is expected to be launched soon to better tackle the emerging problems on the ever-changing market," Sheng said.

Sheng called on courts and administrative bodies to make more detailed regulations on intellectual property rights protection.

(China Daily December 6, 2004)