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Global IP & Innovation Summit, Shanghai - Day 2 updates




Litigation in China, Brexit, online platforms and trade secrets are among the topics on the agenda in Shanghai. Stephy Tang and James Nurton report

14.50: Japan focus

Shanghai-networkingThe two speakers in the final session focused on Japanese and international patent issues. Aki Ryuka, president of Ryuka pointed to the need to think about where to file and when, particularly given the risk of patent invalidation in the US.

“The order of the examination is important”, he emphasised in his speech. Factors to consider when deciding the order of examination:

  • Importance of the patent in each country
  • Importance of pendency
  • Whether keep it as a continuation or adjust it to divisional prosecution

In a nutshell, he suggested IPR holders accelerate Japanese examination in the first step; secondly, speed up non-US and non-Japan examination; and lastly have the US application or continuation examined.

Tomotaka Homma, director of IP rights department of JETRO, closed the two-day conference by introducing Japan Patent Office‘s efforts and challenges to make the national prosecution system better for international users.

14:00: Trade secret infringement in China

Shangahai_panel_orrickTrade secrets are increasingly important, and more attention needs to be paid to protecting them – that was the message from this afternoon’s first session. Xiang Wang, partner, Orrick Herrington & Sutcliffe pointed out that it is hard to collect evidence for trade secrets matters in China without the Public Security Bureau (PSB)’s help in a non-discovery jurisdiction. 

Bruce Wang, IP counsel of 3M China, explained how to collect evidence from computer hard discs for trade secrets infringement issues. Wang also found it necessary to introduce trade secret-related articles into employee manual and labour employment contracts.

James Zhou, IP department manager at Saint-Gobain Research Shanghai, underlined the importance of the IP holder’s testimony in trade secret cases. Even if a criminal case is taken over by the PSB, rights holders have to collect prima facie to convince the PSB of the necessity to carry on the proceedings.

BASF takes a conservative and defensive approach to protecting trade secrets. Head of IP Xia Liu said the company’s employment contracts listed what to do and not to do regarding protecting trade secrets in detail. “Even though we’ve done everything on legal aspects, we don’t come up with good results. The legal system is not mature at this moment,” said Liu.

12:10: Online brand protection

Shanghai_panel_YellowModerator Daniel Bennett is the CEO of Yellow Brand Protection. He opened this panel by providing tips to combat infringement online: search as many platforms as you can; and identify the key players, major distributors, and active vendors – these all are the potential offenders.

Yanwei Fan, legal and IP department senior manager of JD.com, said JD.com has a “zero tolerance” policy of counterfeits goods. The company enforces strict punishments on sellers: they will be kicked out for good if one fake product is sold. But patent issues are relatively hard to tackle. “We handle deign patent complaints on our own, and sometimes seek exterior assistance from SIPO to deal with invention patents infringement issues,” said Fan.

Maurice He, Wechat senior legal counsel of Tencent, wrapped up the panel by illustrating Wechat’s brand protection system and its workflow to address infringement issues. 

11.20: Brexit, the EU and IP

Shanghai_Harris_Gordon
Gordon Harris
Post-coffee break, Gordon Harris, a partner of Gowling WLG, shared his observation on the impact of Brexit on IP rights. He stressed that EU registered IP rights remain protected in UK for the time being, and there will be no change to European patents.


Some tips Harris gave to businesses were:

  • Adapt drafting – ensure that terminology in the documents is drafted in a way that the extraction of the UK from the EU and unitary IP systems can be accommodated without a further revision in the future.
  • Review existing documents - identify which covers pan-EU and which covers only UK, and adjust strategy accordingly.
  • Consider filing national UK applications for trade marks and designs.


10:00: Litigation versus arbitration

Ian Liu, senior associate at Deacons, briefly went through the pro and cons of civil litigation, administrative proceedings and arbitration in China.

Wade Zhu, senior IP counsel with DuPont, suggested choosing arbitration proceedings when a technology licence matter is involved, given the importance of cost and confidentiality. “Actually it [an arbitration proceeding] is beneficial to licensees. The cost is considerably higher in a litigation process, thus the licence fees might be higher,” Zhu said.

Jinjie Chen, legal counsel, Dover Corporation echoed Zhu’s comments on dispute resolution in domestic disputes. He suggested companies settle disputes through the court system rather than arbitration method if enforceability is a concern. There is a greater chance that arbitration decisions will not be executed or be cancelled by Chinese courts in the end. 

Another practitioner from Deacons, partner Catherine Zheng, shared her know-how on cross-border patent dispute resolution. Cost, time and business goals are some key elements to consider. Zheng also suggested Chinese companies utilize the “one country two system” option given that the Hong Kong International Arbitration Centre is a port of call for companies seeking confidentiality, cheap fees and a close location in cross-border disputes.   

9:10: IP enforcement in China

Jamie Rowlands, partner of Gowling WLG, moderated today’s first panel, on the legislative changes affecting IP enforcement in China. China’s IP system has developed and improved since the country joined the WTO in 2001, but repeated infringers remain a problem, says Rowlands. 

Shanghai_2_lunchSteven Wang, senior IP counsel of Philips, is a senior trade mark practitioner. “Enforcement is a big problem in China’s trade mark law,” Wong said. He also introduced the changes to trade mark infringement in the previous 30 years, and pointed out that knotty issues in China include OEM export, “innocent seller” (Article 60(2) & Article 64(2)) and trade mark squatting.

“It’s much easier to prevent the trouble rather than fix it,” said Jeff Lindsay, head of IP at Asia Pulp & Paper. Lindsay shared his opinions from patent and trade secret perspectives. Make sure the company’s management board is well trained as most of them grew up at a time when IP law was very weak in China and are sometimes not fully aware of IP problems.

New technology is a threat to trade secrets, such as photocopiers with hard drives. It causes a risk when photocopiers are sold without being check and there are chances that the company’s business secrets come to their competitors in the end.


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