Podcast: SPB’s Paolo Beconcini Covers Global Counterfeiting and the Importance of Protecting Your Brand in China

Counterfeiting is a global problem that affects a wide variety of entrepreneurs and innovators – from small businesses to global corporations. Action in China can be an important tool for combating these problems. Head of the firm’s China Intellectual Property team, Paolo Beconcini covers the complex challenges of fighting global counterfeiting for INDICAM (Italian Association for the Protection of Intellectual Property), with focus on the “offline” counterfeiting issues in China. Paolo shares his first-hand experience with raids and enforcement in China over the years and how brands can find the right strategy to enforce their brand in China. Check out the full discussion here.

*It is also worth noting that the deadline for stakeholder comments on future strategies in anticounterfeiting and antipiracy is quickly approaching! The USPTO’s notice can be found here. *

As Paolo notes, in the online context, “in taking down listings, you still have the problem that listings will still pop up (you have not only ecommerce platforms and you have also social media now days that is used for counterfeiting) and all this traffic starts in China.”

Therefore, “…if you want to have an impact on counterfeiters, you must consider enforcing your trademarks in China, against the manufacturers and the organizations that supply counterfeits globally.”

Paolo explains the options. In brief, “China has dual enforcement structure. Civil enforcement, you go to court against an infringer of the trademarks. Or you use administrative enforcement.”

We note that the US Patent and Trademark Office is currently seeking comments on effective strategies to combat counterfeiting and piracy (see here). The deadline has been extended to September 25, 2023, and the Office will be sponsoring a roundtable discussion thereafter.

U.S. Outbound Investment Restrictions and Notification Requirements Mandated by Executive Order: Currently Limited to Certain Investments in China Tech

By Squire Patton Boggs on August 22, 2023 Posted in China, Technology, US

U.S. businesses and investors may be subject to new compliance requirements for outbound investments in certain technology sectors pursuant to U.S. President Joe Biden’s Executive Order (“EO”), titled “Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concerns,” and the corresponding the Advance Notice of Proposed Rulemaking (“ANPRM”) issued by the Treasury Department. Our colleagues at our sister blog The Trade Practitioner recently posted on this topic here and we wanted to take a moment and call this to your attention.

Background

The EO and ANPRM establish a “program” to prohibit or require notification concerning certain outbound investments by U.S. persons involving the People’s Republic of China (including Hong Kong and Macau), however other countries may be added in the future.

Whether a U.S. person is subject to a prohibition or notification requirement will be based on the type of activity that the “covered foreign person” conducts with a “covered national security technology or product,” which are defined technologies and products in the following sectors:

semiconductors and microelectronics
quantum information technologies
artificial intelligence

The EO indicated that China’s “rapid advancement” in these three sectors “significantly enhances [China’s] ability to conduct activities that threaten the national security of the United States . . . such as the development of more sophisticated weapons systems, breaking cryptographic codes, and other applications that could provide [China] with military advantages.”

The ANPRM program proposes to regulate the following types of activities: acquisitions of equity or contingent interests, greenfield investments, joint ventures, certain debt financing transactions by U.S. persons, and potentially “indirect” transactions to the prohibition or notification requirement (“potentially” because the ANPRM stated Treasury was “considering” including this activity as well). U.S. businesses and their controlled subsidiaries operating in semiconductors and microelectronics, quantum information technologies, or artificial intelligence sectors are wise to take steps to manage compliance with the forthcoming requirements.

Patent Linkage Litigation in China: A Two-Year Review

By Paolo Beconcini and Xiaoban Xin on August 18, 2023 Posted in China, IP Litigation, Patent Litigation, Patents, Technology

On June 1, 2021, the Fourth Amendment to the Chinese Patent Law became effective. An important part of the amendment is the introduction by Article 76 of the patent linkage system in China – a system for litigation of drug patents prior to market entry of generics, similar to that provided by the Hatch Waxman Act in the US. On July 4, 2021, the National Medical Products Administration (NMPA) of China and the China National Intellectual Property Administration (CNIPA) jointly issued the Measures for the Implementation of Early Resolution Mechanisms for Drug Patent Disputes (“Measures”), which provide more details on how litigations are handled under the patent linkage framework.

How has this new legislation impacted foreign patent holders? Has the Chinese Patent linkage framework worked as designed? On occasion of the second year’s anniversary of the Chinese patent linkage we will try to answer the above questions.

Overview of the Patent Linkage System

A New China Trademark Trojan Horse: Hold Registered Trademarks Ransom by the Filing of Bogus Non-Use Cancellations

By Paolo Beconcini on August 11, 2023 Posted in China, Trade Mark, Trademark Infringement, Trademarks

The recent draft amendment of the Chinese trademark law seems to finally zero in on trademark squatters, as described in my previous blog here). The new regulations, if approved as drafted, will make it more difficult for squatters to steal others’ trademark by abusing the first-to-file system in force in China. This could be a historical turning point in China’s fight against trademark theft, a plague that has negatively affected many foreign right holders more or less famous in the past twenty years. Even before the draft amendment, the China National Intellectual Property Administration (CNIPA) had already started loosening evidence and administration standards to favor oppositions and invalidations proceedings filed by victims of trademark theft. However, squatters have taken notice of all this. Ever resourceful and ready to exploit as much as possible any possible legal loopholes, they have devised new ways to hold right holders’ trademarks ransom and thus gain illicit profit. One of the most recent trends is attacking trademark holders with non-use cancellations.

Podcast: SPB’s Joe Grasser Covers Art Appropriation with INDICAM

By Tamara Fraizer on August 4, 2023 Posted in Copyright, Designs, Intellectual Property, IP Litigation, Judiciary, Supreme Court, Team News, US

Blog editor and partner in our IP group, Joe Grasser, covers one of the year’s most intriguing IP cases, Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith et al, Case No. 21-869, as part of INDICAM’s podcast series “IPxSUMMER 2023 around the world”. As many will recall, SCOTUS recently upheld a ruling that an early 1980s Andy Warhol’s photograph of the artist Prince was not fair use. The case – and the SCOTUS ruling – have many in the art world still thinking through the impact. Download and listen in on the discussion here.

“Ultimately the dispute at issue was: does Prince made by Warhol, is that a fair use in the context of being used on the Vanity Fair magazine when compared to the original photograph?”

“The Idea of copyright is actually a bundle of different rights… one of the copyright rights is the right to prepare derivate works (e.g., turning a book into a movie, a translation of a book from one language to another). It’s a way where you take your original work and add new expression to it. And you do it sufficiently that it’s sufficiently different, that it’s a new a different thing.”

“Looking forward, what do we say about other fair uses? You have to look at the use, not the work, but the use.”

Trademark Litigation in the Post-Abitron World: District Court Rules That the Supreme Court’s Decision Does Not Preclude Plaintiff from Introducing Evidence of Foreign Sales

By Nicholas Zalany on August 3, 2023 Posted in Counterfeiting, e-Commerce, Europe, IP Litigation, Piracy, Supreme Court, US

As we recently covered in this space, the Supreme Court in Abitron Austria GmbH et al. v. Hetronic International, Inc. held that Sections 1114(1)(a) and 1125(a)(1) of the Lanham Act are not extraterritorial and extend only to claims where the infringing use in commerce is domestic. We anticipated that district courts would soon be addressing this decision in pending and future litigation. The first reported decision has now been issued by the District of Delaware, and it holds that Abitron does not prohibit a party from introducing evidence of foreign conduct in support of an infringement claim under the Lanham Act claim.

UK Product Safety and Online Marketplace Consultation

By Paul Jinks on August 2, 2023 Posted in Consumer Law, Data Protection, e-Commerce, Europe, Social Media, UK

The UK government announced on 2 August 2023 a new consultation for proposed changes to the UK’s product safety laws.

Whilst much of this consultation is concerned with the regulatory compliance arrangements for the testing and marking of products what has received less immediate media coverage are proposals also included to impose additional duties on the operators of online marketplaces through which products are sold in the UK.

Specific proposals for online marketplaces which the government is now consulting on include:

Senators Propose Legislation to Provide Multiple Tools for Combating IP Theft

By Douglas Goldhush and Alex Wolcott on July 31, 2023 Posted in IDEA Act, Intellectual Property

On July 27, US Senators John Cornyn (R-TX), who serves on the Senate Judiciary Subcommittee on Intellectual Property, and Tammy Baldwin (D-WI) proposed legislation that provides additional resources to small business owners and local law enforcement agencies for combating ongoing theft of intellectual property by foreign actors. The American IDEA (IP Defense and Enforcement Advancement) Act would provide resources in defending against actors in countries on the United States Trade Representative (USTR) Special 301 Priority Watch List, including China, Russia, India, Indonesia and Venezuela. In particular, the American IDEA Act would:

The rising regulatory tide on environmental claims – Shell found in breach of the Advertising Standards Authority’s rules, again!

By Carlton Daniel, Natasha Maric and Dannielle Jones on July 21, 2023 Posted in Advertising, Europe, UK, UK Advertising Standards Authority

Last month, oil giant, Shell, was caught out again by UK regulator – the Advertising Standards Authority (“ASA“) – for breaching its rules against making misleading environmental claims.

Previous ASA ruling against Shell

This latest ruling is reminiscent of a 2020 ASA ruling against Shell for a radio ad, where it used the claim “Drive carbon-neutral by filling up and using Shell Go+ today. Make the change. Drive carbon-neutral“. There were multiple complaints about the ad, challenging whether it was sufficiently clear that Shell Go+ is a loyalty scheme. The scheme permits subscribers to purchase fuel and Shell then offset the associated carbon emissions by obtaining carbon credits e.g. with tree re-forestation projects. The ASA held that the public would not understand that Shell Go+ was actually a loyalty scheme, and instead would assume that it was a carbon neutral fuel.

Generative AI Is Changing How We Do Business and How We Practice Law

By Susie Ruiz-Lichter on July 18, 2023 Posted in Artificial Intelligence, Copyright, Cybersecurity, Data Protection, Designs, e-Commerce, Inclusion & Diversity, Internet, Judiciary, Metaverse, Social Media, Technology, US

The news about Steven Schwartz, the attorney who asked ChatGPT, an artificial intelligence chatbot, to find cases relevant to his client’s lawsuit only to submit a brief full of bogus caselaw, spread gleefully fast, as embarrassing news does. And although we shook our heads in disapproval, I suspect many attorneys were grateful to Mr. Schwartz. His blunder suggested that we are not so easily replaceable by AI. And it couldn’t have come at a better time—according to a recent report from Goldman Sachs, AI is putting 44% of legal jobs at risk. GPT-4 passed the Uniform Bar Exam (UBE), and it didn’t just barely squeak by: it scored in the 90th percentile, outperforming the average real life test taker. If the legal cartel were not beholden to so many ethics rules, I might suspect Mr. Schwartz had been planted to take one for the team.