the global ip resource managingip.com eutm reform – … · michael hawkins of noerr ex - plained....

Fans of the EU trade mark(EUTM) will all have en-joyed last year’s trade mark

reform package, which starred thenotorious Section 28(8) declara-tions. But did you know that thesequel is released on October 1this year, and will feature changesaffecting examination, oppositionsand appeals?

The trailer for “EUTM reform –the sequel” was adopted by theEuropean Commission last Thurs-day, in the form of the Commis-sion Implementing Regulationand Commission Delegated Reg-ulation. These are due to be pub-lished officially by the end of Julyand will apply from October 1.

This so-called secondary legisla-tion sets out the rules for the re-forms that come into effect onthat date, as Tomás Eichenberg ofthe European Commission ex-plained in a session at the INTAAnnual Meeting yesterday.

Of most immediate interest totrademark applicants will likely bethe new rules on how to apply fornon-traditional trademarks fol-lowing the abolition of the graph-ical representation requirement.Eichenberg said the rules are de-signed to provide “flexibility” ex-plaining: “You can still represent

your trademark graphically.”EUIPO has provided guidance onformats that will be accepted (seeillustration).

He added that the Delegated Reg-ulation will promote consistency:“It will make office proceduresmore predictable.” Also on May17, as part of a codification exer-cise, the Commission approved afinal text for the EUTM Regula-tion, which comprises 212 articles.That text, which Eichenberg de-scribed as “an important new pieceof legislation”, is expected to bepublished in the next few weeks.

The EUIPO is already working ona new version of its Guidelines,taking into account the changescoming in October, and a draftwas published last week, asMichael Hawkins of Noerr ex-plained. These address everythingfrom the procedural changes to feeamounts, the renewal date and the

filing of priority claims through tothe written evidence requirementsand the new EU certificationmark. An important change, saidHawkins, is that acquired distinc-tiveness through use may be in-voked as a subsidiary claim. “Thatwill hopefully allow the case to beheard first on inherent distinctive-ness and if that doesn’t succeedthen on acquired distinctiveness,”he said.

There are also important reformsto opposition, cancellation andappeal proceedings, said Hawkins:“There are some interestingchanges at all levels of the Office.”

If all that does not sate your ap-petite for trademark reform, thenAndrás Jókutí of the Hungarian IPOffice previewed the next instal-ment, which will see national of-fices implementing the changesrequired by the EU Trade MarkDirective over the next few years.

THE GLOBAL IP RESOURCE MANAGINGIP.COM

EUTM reform – the sequelHIGHLIGHTS TODAYAND TOMORROW

The Trademark ScholarshipSymposium offers anopportunity to take part insmall group discussions ofscholarly work in progress.There are two sessions thismorning and two in theafternoon.

The Annual Review ofLeading Case Law in the EUsession, which starts at 10.15am today, is likely to bepopular.

Today’s Users’Meeting ishosted by KIPO

(1.15 pm to 2 pm).

An Open Discussion with IPOffices takes place from 3.15pm to 4.30 pm.

The In-House PractitionersReception is 5 pm to 7 pm.

Tomorrow morning sees theannual review of US federalcase law and TTABdevelopments as well asregional updates coveringsouth-east Asia, Australia andNew Zealand and India.

The INTA Grand Finale is onBarceloneta Beach from 7 pmWednesday.

The top 250 women in IPManaging Intellectual Property’s IP STARStoday reveals its annual list of the leading fe-male IP practitioners in private practice world-wide. See the list at managingip.com or atbooth F23-25. The list recognises female IP practitioners in

private practice who have performed exception-ally for their clients and firms in the past year.This list is based on the global research for ourlegal directory IP STARS, the definitive guide tothe world’s leading IP firms and practitioners,and follows interviews and surveys of IP practi-tioners in private practice and in-house.

Managing IP’s third annual Women in IP GlobalNetwork Drinks takes place from 2.00 to 4.00pm today at the Hotel Porta Fina. Men arewelcome as guests. Findout more information andreserve your place atmanagingip.com/wiip17.

2 | MANAGING IP.COM | B A R C E L O N A 2 0 1 7

Dan Plane of Simone In-tellectual PropertyServices Asia yesterday

gave INTA Annual Meeting at-tendees the latest advice on pro-tecting brands in China, duringthe “A Passage out of China – Is ItAny Easier?” session.

He compared today’s situation ofdealing with pirating to 2001.“Raids were the order of the dayback then,” he said. “It was a bigproblem but companies felt likethey were making progress.” Headded that civil litigation was veryrare back then – “it really wasn’tseen as worthwhile.”

Things have changed greatlysince. The most dramatic shift isthe growth in online sales. Cus-toms seizures are down. Massivephysical markets where counter-feit products sold are less of anissue. Plane said there has also

been a step up in the aggressive-ness of pirates. “Now pirates willsteal a trademark, record it withcustoms and demand a payofffrom the brand owner,” he said.

Plane noted an increase in greymarket products, where fake prod-ucts are mixed with genuine prod-

ucts. “There is a growing tendencyby counterfeiters to mix fakes inwith real products,” he said. Theyare priced like genuine productsand often authentically proven byforged export documents andoverseas receipts. Plane said regu-lar online surveys and trap pur-chases are required to combat this.

Investigators gone wildChina also has a challenging inves-tigation system. Investigators inChina come from a range of differ-ent professions and backgrounds.Many of them work throughstringers. The result, said Plane, isthat the investigation is essentiallybeing wholly subcontracted to athird party who is unknown to thebrand owner and outside the con-trol of the investigation company.

Plane gave a couple of examples of“horror stories” out of China.

One is fishing, where fakes are or-dered for a given brand from afactory by one investigator then araid is set up by another. In onecase in Zhejiang two individualswere arrested and charged with of-fenses relating to the counterfeit-ing of registered trademarks. Theyhad arranged trap purchases witha local company, and then usedthe local Administration for In-dustry and Commerce (AIC) toseize the infringing goods throughtheir colleagues so they could col-lect an anti-counterfeiting award.

In another horror story, the caseof ABB v CUIPPC, a large Chi-nese investigation company wasactively trading in counterfeits ofits client’s products in Dubaiwhile it was supposed to be con-ducting enforcement actions onbehalf of the brand owner. “We alllike to see that someone has paida price for wrongdoing and inChina that means a criminalcase,” said Plane.

Investigate the investi-gatorsOne tip for dealing with this thisthreat was: audit randomly and asoften as possible and without anyreal notice to the investigators.Another was: make agreementslaying out ground rules for theclient/investigator relationship,including anti-corruption prohi-bitions and a stipulation of nosubcontracting.

Notarized investigations prior toraid actions are becoming veryimportant in China. “Administra-tive raids are more and more athing of the past so these investi-gations can help secure one,” saidPlane.

Tips for enforcement plans in-clude rapidly moving to lobbyhigher-level AICs to persuadethem to order the lower level offi-cials to act or take over handlingof the case themselves, and the is-suance of a civil suit as soon as itis clear that it’s unlikely an AICdecision is forthcoming.

“It is very easy for AIC to say thisis too tough, you should do a civilaction,” said Plane. “And they areincreasingly doing so.”

T R A D E M A R K T I M E S | T U E S D AY M AY 2 3

NEWS: CHINA

Avoid horror stories in China

“There is a growing tendencyby counterfeiters to mix fakesin with real products”

B A R C E L O N A 2 0 1 7 | MANAGING IP.COM | 3

The US Supreme Courtyesterday handed downits eagerly anticipated

decision in TC Heartland v Kraft.The Court reversed the FederalCircuit and held that the propervenue in patent cases is limited tothe state of incorporation of thealleged infringer.

The unanimous decision returnsthe venue guidelines for patent in-fringement suits to the rule thatwas established in 1957 by theCourt in Fourco Glass v Trans-mirra. It ruled in that case thatSection 1400(b) of the patentstatute is the sole dicta for venuein patent cases, rejecting the ar-gument that the amended gen-eral venue statute, 28 USCSection 1391(c), broadens thedefinition of “residence” to any-where that the defendant has aplace of business.

Though TC Heartland made its

way up to the Supreme Courtfrom the District of Delaware, thecase has been most closelywatched for its impact on theEastern District of Texas, whereone judge heard nearly a quarterof all patent cases in 2016.“Everyone agreed something hadto be done,” Q Todd Dickinson,Polsinelli partner and formerUSPTO director, told ManagingIP. “The question is whether thiswas the right or best thing to bedone.”

Dickinson noted that the decisionwas hardly a surprise, and will be“widely lauded,” but that venuewas one of several driving factorsfor the push for reform. Now thatthe Court has decided this issue,he is skeptical that there will be asufficiently strong impetus for leg-islative change. In the comingmonths and years, this decisionwill likely lead to lower filingnumbers in the Eastern District of

Texas. On the other hand, theDistrict of Delaware, where manycompanies are incorporated, willprobably only get busier.

Not done there, the SupremeCourt also yesterday announced itwould hear the Patent Trial andAppeal Board case SAS v Lee.

T U E S D AY M AY 2 3 | T R A D E M A R K T I M E S

NEWS: SCOTUS

SCOTUS rules on patent venue


An open house sessionwith IP office representa-tives yesterday provided

INTA Annual Meeting registrantswith the latest IP developments intheir respective countries.

The informal session allowed del-egates to tour the room and talkto any of the participating IP of-fices and ask questions or raise IPconcerns. Managing IP first metwith USPTO IP attaché for theMiddle East and Africa, Aisha YSalem, now in her fourth year ofservice, who told us that she hasbeen touring the region lately oncapacity-building initiatives, themost recent of which was helpingto train the GCC IP Office staff.

IP Australia representatives said thatthe government is now consideringthe recommendations of the Pro-ductivity Commission’s inquiry intoAustralia’s IP regime (report pub-lished in 2016). Among the recom-mendations is the decluttering ofthe register by quickly removingunused trademarks. The govern-ment’s response is expected this year.

In January this year the DKPTOlaunched an enforcement unit toprovide initial, basic advice toSMEs facing trademark infringe-ment issues. There is a small fee topay for this service and theDKPTO hopes to receive moreenquiries as the service becomeswidely known. DKPTO represen-tatives emphasised that the serviceis not a substitute for professionallegal advice and, as an IP office, itwill obviously not take on dis-putes on behalf of users.

JPO representatives informedthose present about the first colortrade marks that were granted bythe office in March. Practitionerssee this a “positive sign” for brandowners operating in Japan. OAPIDirector General Paulin EdouEdou will complete his second

tenure in July this year and will besucceeded by Denis Loukou Bo-houssou, who takes up the poston August 1. On the other handARIPO’s Director General Fer-nando dos Santos started his sec-ond term in office this year.Representatives from Georgia saiddraft legislation designed to incor-porate the provisions of the EUtrade mark directive will soon gobefore its parliament.

The following offices were pres-ent: ARIPO, IP Australia, Na-tional IP Center of Georgia,OAPI, The Swedish Patent andRegistration Office (SPRO), Dan-ish Patent and Trademark Office(DKPTO), UKIPO, USPTO,Japan Patent Office (JPO), IP Of-fice of Paraguay, and the UgandanIP Office.


NEWS: IP OFFICES

News from IP offices

Patience is a virtueEveryone knows if you come to INTA, you aregoing to have to wait. The line for cabs outsidethe conference center has been long at busy pe-riods, and yesterday’s metro strike made themeven longer. But the prize for craziest wait wassurely for Arochi’s party at Shôko Barcelona.Party enthusiasts who did not come early arrivedto find a line that kept going and going – roundthe side of Shôko, over a bridge and almost intothe street – more than an hour’s wait for someintrepid party-goers.

Tweets #inta17

Raja Selvam That’s thelongest taxi waiting line Ihave ever seen @INTA.#inta17 #trademarks#barcelona

Christopher WeberSellers of counterfeits inBarcelona have a neattrick up their (short)sleeves: a “ripcord” todraw in their spreadbefore running #INTA17

EUIPO A successful andproductive #TM5 mid-term meeting in#Barcelona. @JPO,@KIPO, @USPTO, #SAIC &#EUIPO workingtogether for users#INTA2017

Williams Powell You atthe start of #INTA2017; youafter the 12th reception.

Likelihood ®© BlogIncomprehensiblenavigation at #INTA17,but many helpful staff toexplain cheerfully how C4is just past F. Cheerfulgoes a long way!

“In January the DKPTOlaunched an enforcement unitto provide initial, basic adviceto SMEs.”


What do you think about thedraft Chinese e-commerce lawthat came out last December?

China realized it is a key moment for law mak-ers to regulate e-commerce. Therefore estab-lishing a regulatory framework in China forgoverning online trade is an admirable ambi-tion. Because, let’s face it, the scale of counter-feiting in China is still massive and it isreasonable to assume it will only get worse be-fore it gets better. And online counterfeitingappears as one global, enormous and expand-ing problem.

Counterfeiters based in China are now shippingfakes directly to consumers overseas, thus mak-ing enforcement in the destination countriesvery difficult. [This] does not only concern…e-commerce platforms, but intermediaries suchas social media, advertising service providers,payment services [and] shippers.

This phenomenon requires Chinato place even greater attention onthe need for solutions to theproblem itself.

If it is a fact that China is cur-rently the main origin of coun-terfeit products seized at foreignborders; at the same time, China is be-coming an extensive user of IP and buildingstrong IP policies. We know that there is noreal economy based on innovation without astrong IP system. IP protection is only usefulwhen IP enforcement is transparent, predica-ble, effective [and] efficient.

This is why we believe that the…draft law…is a great opportunity for China to establisha…leadership position regarding the promo-tion of IP, the fight against counterfeiting,and the protection of both consumers andcompanies.

Why is the current legal frame-work, in which it’s up to brandowners to identify violations and

take action, insufficient?

For a start, it is clear that the cur-rent legal framework is just notworking. Proof is: counterfeit-ing just keeps growing.

The latest global surveys suggestthe level of global trade in counter-

feits has increased 80% in the last fiveyears. Meanwhile, customs data and anecdotalreports suggest that China is the source of over80% of fakes sold overseas.

It seems reasonable to assume that the value ofcounterfeits made in China and sold both do-mestically and internationally are valued in thehundreds of billions of euros…annually.

The main cause behind the latest increase intrade in fakes is the internet, which offersanonymity to vendors and where traditionalmethods of monitoring, investigation and en-


INTERVIEW: CHRISTIAN PEUGEOT

Intermediary liability in ChinaChristian Peugeot, President of Unifab and marketing director ofPSA, talks to Shaun Tan about China’s draft e-commerce law

B A R C E L O N A 2 0 1 7 | MANAGING IP.COM | 7

forcement have proved completely inadequate.

So once we know that, we have two [options]:we can either watch and do nothing, or we canfind another way – one that encourages all ac-tors to do more, including intermediaries.

Since the current standard of notice and take-down has proved ineffective and outdated, wehope that…future [drafts of the] e-commercelaw will introduce a standard of proactive andpreventive measures for online intermediaries.This appears to be a necessity on a global level,but first and foremost in China.

How can brands, anti-counter-feiting organizations, and con-sumer associations bandtogether to resist or change thisdraft law?

We clearly need to do a better job of explain-ing to law-makers the challenges faced in themarkets and in day-to-day enforcement. Theyneed to understand the true scope of theproblem and the consequences, both todayand in the future, if effective action is nottaken now.

It is true that in the past, counterfeiting andother related violations have provided employ-ment and a method for local entrepreneurs to

generate capital. However, the Chinese gov-ernment, society and the economy in generalare increasingly damaged by this business in avariety of ways, including:• lost tax revenues for national and local

governments, and by extension sectors ofChinese society that benefit from this income;

• harm to local industry, including large en-terprises, SMEs and start-ups – all of whichrely on an environment of fair competitionin order to support their investments innew products. As suggested above, eachdollar or yuan that goes to undergroundproducers and traders in fakes means oneless dollar or yuan for enterprises dealing inlegitimate goods;

• harm to workers caused by unsafe work-ing conditions, denial of legally-man-dated benefits from their employersengaged in counterfeiting, and the lack ofjob security;

• promotion of criminality, generally, viathe use of enormous profits generatedfrom counterfeiting to fund other illegalactivity;

• harm to China’s reputation – globally andlocally – for innovative and quality goods[and] security in investment.

I can’t imagine [that] once lawmakers get toknow [these] facts that they won’t take all themeasures they can, to really fight against it.

Foreign governments and companies will haveto work more closely with Chinese policymakers, including through providing data ontheir experiences, technical expertise neededfor research projects and suggestions that arefirmly rooted in international practice.

What is going to happen to thisdraft law? There are rumoursthat the NPC has decided to re-draft certain provisions. Whatdo you expect to come of this?

We hope that the NPC will take on board thecomments of all stakeholders and make signif-icant changes to the existing draft of the e-commerce law. In tandem, we hope they willalso take this opportunity to better understandthe scope of the problem and the need forchanges in other laws, as well as structural re-forms that will better harness administrativeenforcement [and shift] more resources to ju-dicial enforcement, both civil and criminal.

We hope as well that the NPC will recognizethat the problem for many industries is con-centrated in a handful of cities and provinces,and that encouragement will be given to adoptappropriate action plans now to deal withthese regions, and not wait years for new leg-islation to be introduced. This could, for ex-ample, be achieved through the introductionof pilot programs.




.sucksAfter the popularity of last year,.sucks is again giving out t-shirtsfrom its stand with themes including counterfeit.sucks, in-fringement.sucks and trump.sucks.But it has upped its visual gamethis year, with the stand sporting anumber of arresting images.

DARTS-IPReports suggest you can enjoy aninteresting experience with a vir-tual reality headset at this booth.

SedoThis domain name provider re-cently launched Italian and Dutchversions of its platform.

TrademarkNowThe service provider told us thatit is bringing AI into the world oftrademark searching. “It takes 15seconds to deliver the results,” saida representative.

JTIJTI’s “The Future of Brands”stand has an “unfair circus” theme,showing the dangers of what itsees as unfair regulation. It in-cludes a wheel of fortune, a for-tune teller machine similar to theone in the 1980s movie “Big”, anda brand targets stall where you cantake aim at fast food, alcohol, con-fectionery and soft drinks.

UniregistryThis California-headquartereddomain names service providerhas launched a marketplace andan app last year. “With us you cansell, buy and transfer faster and forexample you don’t have to wait for30 to 40 days to do a transfer,”said a representative.

BrandshelterThis service provider told us thatit recently enhanced its platformwith a monitoring service. A rep-resentative told us it has “goodpricing, good support and thebest interface to manage domainnames”.

LexisNexisThe Modern Law of Trade Marks(5th edition) was on display atthis publisher’s stand. One of theauthors, Christopher Morcom,said the text covers all the recentchanges in EU trade mark law.

Oxford University PressThe Future of the Professions, abook about the impact of IT insome professions, was on displayat this publisher’s stand. An IPtitle under its Very Short Intro-ductions series was published thisyear.

Managing IP Our stand includes the latest is-sues of the magazine and our IPStars handbooks, as well as uniquepassports for IP Stars who havesubmitted their details in advance.

IP officesOffices exhibiting and providinginformation to users includeEUIPO, OAPI and WIPO andthe national offices of countriesincluding Spain, Japan, Koreaand the UK. The latter includesa display of famous Britishbrands.

CompuMarkThe trademark research andbrand protection provider isdemonstrating new products in-cluding its TM go365 ImageSearch. You can also win an AppleTV or Amazon Echo.

CPA GlobalThe company is launching a newintegrated management systemcalled FILE. It is demonstratingthe tool at its booth and invitingearly adopters to sign up.

Alt legal/WoltersKluwerThe two companies are promot-ing Trademark Navigator, a col-laboration between their existingtrademark guidance and docket-ing systems.

Yerra SolutionsFind out about the IP Magic Tri-angle, a new IP portfolio manage-ment tool, at the company’sbooth.

CorsearchTo promote its naming app, thecompany has a dog-naming com-petition and has even welcomedguide dog demonstrations fromSpanish charity ONCE.

IPzenThe provider of cloud-based casemanagement and invoicing serv-ices is launching its Patent Portfo-lio Management Module.

MarksmenThe investigation company boasts“We’re cool” and to prove itpromises an IP Spa at its booth.

RWS inoviaTranslation and patent filing serv-ice provider RWS inovia says it isgiving away water bottles at itsstand today – which might be use-ful for anyone who has spent toomuch time walking about in theBarcelona sun.

NEWS: EXHIBITORS

The virtual exhibition hallThe INTA ExhibitionHall is always busy. Wetook a look at some ofthe new services andcompetitions beingoffered by exhibitors

1 0 | MANAGING IP.COM | B A R C E L O N A 2 0 1 7


Dámaso Pardo took over as presidentof the National Institute of IndustrialProperty (INPI), Argentina’s patent

and trademark office, in June last year, after 26years as a partner at PAGBAM.

Pardo says it has been an exciting year. INPI hasestablished a strategic plan with three main actions.

“The first goal will be modernization of the of-fice – refreshing the building and improving theplace where the people work, investing in thesystems technology and training the examiners,”says Pardo. “We expect the result after puttingthis strategy in place is we reduce the timing ofthe process for granting rights to trademarks,designs and patents.” It takes about eight to 10months for a trademark to be granted in Ar-gentina if it is unopposed.

“The second goal is integration into the world,”says Pardo, meaning negotiations and relation-ships with other offices. “With this cooperationand technical help, we will improve the qualityof the products we render to the end users.” Forexample, in February, the USPTO and INPI announced a Patent Prosecution Highway pilotprogram and this month the EPO and INPIsigned a memorandum of understanding on bi-lateral cooperation.

The agreement between the EPO and INPI

foresees joint activities in the areas ofpatent procedures, search, exami-nation and automation, as wellas use and exchange of patentdata and databases. Pardo be-lieves that, by working closelywith the EPO, INPI will be ableto provide a high-quality trainingprogramme to patent examiners inorder to improve and strengthen its IP system.

“The last goal is that we have the ambition tohave a platform where all the applicants will beable to file electronically,” says Pardo. “We al-ready have that but the level of use was very low,about 30 to 40%. We will try to get it to 80 to90%. That will in turn reduce the timing of theproceedings.”

Pardo notes that the timing now “is not bad”.He adds: “But at least one or two months arelost between the application date and the pub-lication date because the users are not taking ad-vantage of the electronic filing system. So wehave to improve this part of the system. We arelaunching a new friendly user electronic filingsystem so we expect we will be able to grant atrademark in six to seven months. That wouldbe fantastic.”

These figures are if the application is unop-posed, however. Pardo says Argentina has “avery complicated opposition system for trade-

marks”. The trademark office doesnot play a role in decidingwhether the opposition is wellgrounded or not. The applicantand opponent have to settlewithin one year. If there is no

agreement the applicant has tofile a lawsuit with a federal court,

and it can take a year and a half to geta first instance decision.

“I think we have to more refine our oppositionsystem, reduce it in time, because it is not ap-propriate to the internet and ecommerce,” saysPardo. “When an opposition arises it is takingtoo long.”

INPI will be in good shape once these goals areachieved, believes Pardo. “We would like to pro-vide a good service to national and foreign com-panies trying to file and protect their rights inArgentina. I think we will manage to do that inthe next three to four years – this is our maingoal.”

In addition, INPI intends to adopt the PatentCooperation Treaty – “we are trying to signPCT next year,” says Pardo. Efforts are also un-derway in Argentina for a new design law.“There is a bill in the Congress and we hope tobe able to pass this law this year,” says Pardo. “Itfollows the Hague and registered Communitydesign model.”

INTERVIEW: DÁMASO PARDO

Revamping INPI in ArgentinaDámaso Pardo has been running Argentina’s patent and trademark office for almost a year. As hetold Michael Loney, he has established a strategic plan with three main goals

© Euromoney Trading Limited 2017.Trademark Times is published by ManagingIP, which is a Euromoney publication, andprinted by Cayfosa Impresia Ibérica inBarcelona. Articles are also available online

at managingip.com. Trademark Times is notassociated with, or endorsed by, theInternational Trademark Association. Formore information, and to pick up extracopies of Trademark Times, visit us in the

Exhibition Hall at booth F23-25. EDITORIAL TEAM: James Nurton, Michael Loney, Kingsley Egbuonu, Shaun Tan, Alice O’Donkor, Natalie RahhalPRODUCTION: Luca Ercolani

BUSINESS DEVELOPMENT: Alissa Rozen, Nick Heath, Matthew Siu MARKETING/ SUBSCRIPTIONS: Leanne Fitzpatrick, Roxanne SpeightPUBLISHER: Tom St Denis

“One of Barcelona’s best kept secrets is Tintoreria Dontell,which is a restaurant in a dry cleaners – you walk past theshirts and suits to get to the dining room. Another placeworth visiting if you like cooking is the BCN Kitchen cookeryschool in the Boqueria Market: you can buy the ingredientsyou like and then get a lesson in cooking them”Carlos Pires, Balder

“You can’t leave Barcelona without seeing the SagradaFamilia. It is spectacular, particularly from the inside, and hasa unique, simple, mystical atmosphere”Luis-Alfonso Durán, Durán-Corretjer

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We received 142 responses from 34different countries to the IPSTARS survey on conference-at-

tending habits. The US accounted for 37.1%of answers, followed by the UK, with 15.0%,and France, with 6.4%.

When asked how many IP conferences theypersonally attend in a typical year, 68.1% saidone to three, 25.5% said four to six, 5% saidseven to 10, and a hardy 1.4% said more than10. We asked respondents which specific con-ferences they attend. The INTA Annual Meet-ing was the clear favorite, with 90.1% ofrespondents attending it. Other popular meet-ings were the INTA Leadership Meeting(41.5%), AIPLA Annual Meeting (13.4%),AIPPI Congress (13.4%), PTMG AnnualConference (12.7%), ECTA Annual Confer-ence (12.0%), MARQUES Annual Confer-ence (12.0%), APAA Annual Conference(9.9%) and FICPI Congress (6.3%).

Respondents were asked what their primarygoal was if attending the INTA Annual Meetingin Barcelona. It seems catching up with oldfriends is the priority – the overwhelming fa-vorite answer, with 75.0%, was to meet existing

clients/contacts. Make new clients/contacts wassecond with 16.4%, learn about latest trade-mark developments got 4.3%, and “other” got4.3% (this included answers such as “it is a dualpurpose meeting old and new clients/contacts”).

Ever wondered if your peers attend events in the same way that you do? Ahead of the INTAAnnual Meeting in Barcelona, IP STARS conducted an online survey. Michael Loney reports

Learn about latest trademark developments

Make new clients/contacts

Meet existingclients/contacts

Other0

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SURVEY: TRADEMARK TRENDS

The truth about conferences

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Likelihood of conclusions We also asked respondents to tell us how likelythey were to do 12 specific activities on a scaleof “not likely”, “somewhat likely” or “verylikely”. Having one-to-one meetings with ex-isting clients/contacts is the most likely activ-ity, with 95.2% of respondents saying this wasvery likely, 0.8% saying somewhat likely and4.0% saying it is not likely.

Having one-to-one meetings with potentialclients was also a popular activity, with 81.5%of respondents saying it was very likely, 8.9%saying it was somewhat likely and 9.7% sayingit was not likely.

Food and drink also feature prominently intrademark practitioners’ plans. Attending recep-tions/parties hosted by firms/companies wasvery likely for 87.3% of respondents, somewhatlikely for 7.1% and not likely for 5.6%. Simi-larly, having group meetings/lunches was verylikely for 72.4%, somewhat likely for 20.3%and not likely for 7.3%.

Attending actual INTA activities is less popular,however. When asked how likely they were toattend INTA educational session, 23.4% saidvery likely, 28.2% said somewhat likely and48.4% said not likely. Attending table topicsessions was very likely for just 16.9%, some-what likely for 26.3% and not likely for 56.8%.

Attending INTA social events was very likelyfor 47.6%, somewhat likely for 32.3% and notlikely for 20.2%. Attending committee meet-ings was very likely for 51.2%, somewhat

likely for 14.0% and not likely for 34.7%. Vis-iting the exhibition hall was deemed very likelyby 46.3% of respondents, somewhat likely by36.6% and not likely by 17.1%.

Non-INTA training and sessions do not ap-pear to be much of a pull. Only 5.9% of re-spondents said they were very likely to attendnon-INTA training/sessions (for example, runby IP offices or exhibitors), 27.7% said some-what likely and 66.4% said not likely.

Trademark professional’spriority claims We quizzed respondents on the importance ofthe INTA Annual Meeting for six criteria. Talk-ing to existing clients/contacts was deemed veryimportant by 82.5% of respondents, quite im-portant by 12.4% and not important by 5.1%.

Making new clients/contacts was very impor-tant for 68.1%, quite important for 26.5%and not important for 5.1%. Meeting withtheir own colleagues from other offices wasvery important for 31.6%, quite important for22.1% and not important for 46.3%.

Using the INTA Annual Meeting for leaningabout trademark developments in the respon-dents’ county/region was very important for22.2%, quite important for 33.3% and notimportant for 44.4%. Interestingly, learningabout trademark developments in other coun-tries/regions was deemed more important.Some 24.3% of respondents said this was veryimportant, 49.3% said quite important and26.5% said it was not important.

We also asked respondents how a number offactors affect their views of an IPadvisor/firm. It seems the more personalized,the better. An invitation to attend a privatedinner was viewed very favorably by 51.1%,somewhat favorably by 28.1% and deemedto have no effect by 20.1%. Likewise, an in-vitation to schedule a one-on-one meetingwas viewed favorably by 47.8% and some-what favorably by 36.2%.

Other methods were deemed less likely tosucceed. An invitation to attend a receptionwas viewed very favorably by 21.7% andsomewhat favorably by 46.4%. An invitationto a meeting in a hotel suite was viewed veryfavorably by 18.1% and somewhat favorablyby 36.2%. An impromptu meeting in or nearthe conference venue or hotel was viewedvery favorably by 17.4% and somewhat favorably by 58.7%.

We also asked respondents whether they hadever done a number of actions as a result of at-tending a reception/meeting at INTA or otherIP conferences. Some 55.8% of respondentssaid they has given new instruction to an ex-isting IP advisor/firm, 54.4% said they hadgiven instruction to a new advisor/firm,40.1% said they had given additional (un-planned) work to an existing advisor/.firm,36.7% said they had changed the IPadvisor/firm used in a particular jurisdiction,29.9% said they had renegotiated terms or feeswith an existing IP advisor/firm and 19.7%said they had conducted a review of their legalpanel for IP work.

Very important

Not important

Quite important

Talking to existing clients/contacts

Quite important

Very important

Not important

Making new clients/contacts

Very important

Quite important

Not important

Meeting with own colleagues from otheroffices

Quite important

Very important

Not important

Learning about latest trade mark developments in my country/region

Very important

Quite important

Not important

Learning about latest trade mark developments in other countries/regions

Quite important

Very important

Not important

Obtaining educational material/samples(eg from exhibitors)

How important is attending the INTA Annual Meeting for:



What are the most populartypes of trade mark licensing inChina?

Well, actually it depends.

Unlike the traditional ways of franchising andmerchandising, co-branding can [involve]crossover[s] combining two distantly-relatedproducts, like Nike+Ipod bringing sports andmusic together.

Co-branding has been catching more eyeballsof both media and consumers in China as wellas in other countries. After all, who couldargue with playing Lego toys with Batmanminifigures therein, meeting Marvel heroes inShanghai Disneyland, getting extra bonus[es]or even plane ticket[s] with a credit card jointlylaunched by China Guangfa Bank and ChinaSouthern Airlines, or licking a KFC Cremiaice cream out of a Shiroi Koirito cone? As forthe two brands, co-branding is usually a win-win strategy with half [the] marketing expensebut doubled exposure.

However, as appealing as it is, most co-brand-ings do not last as long as the other traditionallicensing types. Intel processor’s co-brandingwith Dell and HP computers is an exception,but this is mainly because [a] processor alonedoes not serve any function and is hard to beadvertised on its own.

As compared with co-branding and merchan-dising, franchising conveys a business modelmore than [the] mere licensing of IP rights.Along with the attendant trade marks, designpatents, know-how and other IP rights, a fran-chisee is always required to take the businesspattern set up by the franchisor so that goodsor services of consistent quality and style aresecured. For example, a consumer entering 7-11 would expect the food to be not only cleanand healthy, but also 7-11-styled, not a burgeror fries like McDonalds, although the latter isof equally good quality. Accordingly, franchis-ing is adopted in business[es] like restaurants,beauty salons and supermarkets more oftenthan other types of licensing, where consumerswould expect goods and services to be alike orsimilar.

Merchandising is an old and long-establishedform of licensing, which is still very active inChina today. We can see little girls wearing T-shirts or dresses with different images of Elsafrom Frozen every day, and it is reported thatDisney has profited much more from mer-chandising Frozen characters than sellingmovie tickets and DVDs. When items likemugs, plates, clothes, caps, towels are addedwith sports teams, universities, well-liked char-acters, popular stars or trade marks, sales willbe instantly boosted despite…the premiumprice as compared with the same goods with-out licensed IP rights. The key [to] merchan-dising is the IP rights per se are so popular thatconsumers are willing to pay extra.

To sum up, it is hard to say one type of licens-ing precedes the other in popularity in China.It really depends on which sector the businessis in and what [cooperative] relationship theparties can build.

What are the pros and cons ofthe main types of licensing?

On one hand, when two renowned companiesare together in co-branding, they share re-sources, marketing expenses and even riskswhile enjoying individual profit margin in-creased by sales volume. On the other hand, ifanything negative from either side happens,both brands will be affected. And two separatebrands tend to have different missions and vi-sions, which makes co-branding more likely tofail or be short-lived than other types of licens-ing. For example, one brand may prefer to ad-vertise the co-branding more to increase sales,while the other brand may think too much ad-vertising of the co-branding would dilute itsown brand, and such difference may lead theco-branding to end.

For a franchisor, franchising is a cost-effectiveand risk-less way to expand business, as thefranchisees typically assume costs and risks.And to avoid loss of investment, local fran-chisees would do diligent [research] to openup new markets for the franchisor. In…decades [past], many foreign companies havebuilt up their presence quickly in China byfranchising. Successful examples in China in-

clude KFC, McDonalds, 7-11, Hilton, Shera-ton, and Super 8 Motel…However, much cat-tle, much care. With the rapid growth, whichis a trait of franchising, a franchisor needs extraefforts to keep the train from [running away].Otherwise, adverse experience from one hotelin China may stop a customer from bookinganother hotel sharing the same brand in US.

Although profit margin[s] can be enormouslyincreased by merchandising, IP right owners[should] pay more attention to the quality ofmerchandised items, as products of poor qual-ity may not only decrease the popularity of themerchandised IP rights, but also do harm toreputations built up [over] years. When mer-chandised products are in large volume[s] anddiffer in type…quality control can be a realchallenge. And target markets may vary a lotwith different merchandised IP rights. For ex-ample, it is never a good idea to sell Red Soxsouvenirs in New York.

Each coin has two sides. [The] [p]ros and consof each type of licensing [should] be consid-ered before a decision is made.

What are the most important is-sues for licensors to consider?

First, licensors need to decide if the license[will] be exclusive, non-exclusive or sole, andwhether sub-licensing is allowed or not. Thisis ordinarily based on the relationship [andthe] business strategy.

Second, although there is no so-called “nakedlicensing” in China. China[‘s] Trade Mark Lawdoes require licensors to supervise the qualityof licensed goods and services. And licensorswould be held jointly liable for [any] problemcaused by [poor] quality of licensed goods andservices.

Besides quality control, the licensors may alsowant to have control over the…use [of ] thetrade mark, the design of packaging and dec-oration, the prices and the distribution chan-nels, so as to protect the trade mark fromdilution, degrading (especially when the li-censed trade mark is associated with “[higher]end” [goods]) or other possible harm.

Issues in trade marklicensing

Q&A: CHINA

Lily Lei and Yuan Yuan of Liu, Shen & Associates explain the complexities of trade mark licensingin China

B A R C E L O N A 2 0 1 7 | MANAGING IP.COM | 1 5


Last but not least, licensors [should] considerrequesting the licensees to cooperate in actionsdefending the licensed trade marks. For exam-ple, licensees’ help in collecting evidence is es-sential [in defending] the mark in non-usecancellation[s].

What are the most important is-sues for licensees to consider?

First and foremost, licensees [should] alwaysreview and evaluate the trade mark to be li-censed before licensing. Is the ownership of thelicensed trade mark clear and stable? Is thereany risk of being accused of infringement? Willthe profit and other business benefits be goodenough for royalties?

Second, although record[ing] of trade mark li-cense[s] [are] not mandatory [under] China[‘s]Trade Mark Law, it is prudent to have the li-cense recorded with [the] Trade Mark Office(CTMO) anyway, which will not only defendthe licensees from third parties…but also savetime for licensees in future possible inspections.

If the licensees decide to [record their license],it shall be noted that the term of license shallnot exceed the valid period of the trade markregistration, and the licensed goods/servicesshall not go beyond the registered ones. And[this should] be re-filed whenever there is anychange in the term of license, contents of li-

censed goods/services or ownership of the li-censed trade mark.

[Third], licensees shall consider whether thelicense [will] be kept valid after [the] owner-ship of [the] licensed trade mark is changed.[The] Supreme Court has provided that [thisshould happen automatically], unless it is ex-plicitly agreed upon otherwise in the licensecontract. However, if the licensees choose tokeep the license after change of ownership, aclear clause in the contract may save time andmoney with the new owner of the licensedtrade mark. And [if ] the licensees choose notto keep the license after [a] change of owner-ship, the licensees shall consider what compen-sation [will] be made by the licensors whoassign the licensed trade marks during [the] li-censing period.

Last, if the licensors record the licensed trademarks with…customs, the licensees shall re-quest [that] the licensors list licensees and theirimport and export agencies as authorized userswith…customs, which may [save] licenseesfrom trivial [problems] in future.

What are the key points forboth parties to include in a li-censing agreement?First, both parties shall include the type of li-cense in the agreement, that is, whether it isexclusive, non-exclusive or sole.

Second, quality control is a key point forboth parties.

Then basic and general issues like extent andscope of licensed rights, right to sub-license(or not), field of use, territory, manufactur-ing of products, design of packaging anddecoration, payable fees, renewals, termina-tion, consequences of termination, infringe-ment and counterfeiting, miscellaneousprovisions regarding governing law and ju-risdiction are key points too. Each of theabove points has to be considered thoroughlyand addressed adequately. Take payable feesas an example. The agreement [should] ad-dress the following questions: How is the li-censor to be paid? Lump sum or instalment?If the latter, guaranteed minimum royalty, orpercentage royalty, or combination of both?If the latter two, should the licensee be re-quired to explain how the royalties are calcu-lated, and does the licensor have [the] rightto audit? What is the payment term, annually or quarterly?

Furthermore, obligations and responsibilitiesof both parties in special situations likechange of ownership, bankruptcy are alsokey points to be included in the agreementtoo.

To be continued on www.managingip.com

Lily Lei

Lily Changxin Lei is a part-ner at Liu, Shen & Associ-ates, heading the firm’strade mark practice. Sheobtained her BA from theInstitute of InternationalRelations, majoring in Inter-national Relations andEnglish Literature.Part of her legal trainingwas on a Young ChineseLawyer’s training schemeat the University of London,Clifford Chance and theChambers of ChristopherMorcom QC. Lily has pre-sented on trade mark is-sues in China at INTA andat seminars sponsored bycorporate clients.

Yuan Yuan

Yuan Yuan is a partner atLiu, Shen & Associateswhere she covers trademarks. She holds a Bache-lor’s degree in English Lit-erature from WuhanUniversity and a Master’s inIntellectual Property Lawfrom the Franklin PierceLaw Center (now part ofthe University of NewHampshire). She trained inUS trade mark practice atBirch, Stewart, Kolasch &Birch in 2008.

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