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Linda Liu & Partners

 
Foreword

With the development of China’s economy, exhibitions have developed rapidly as well. The Blue Book of Convention and Exhibition Economy of China showed that in 2011, as many as 7333 various large and small exhibitions were held in China, and the number is still rising.

Companies have paid more and more attention to exhibitions and actively participated in them, as a way or a means to sell products, attract investment, demonstrate corporate images and improve business visibility.

With the vigorous development of exhibitions, the IPR protection issues relevant to exhibitions become increasingly prominent.

Taking “China Import and Export Fair” (hereinafter referred as “Canton Fair”) as an example, although more attention has been paid towards IPR protection in the exhibitions and the number of IP complaints has been decreasing, it is still in a high level.

 

Among the IP complaints in all the sessions of Canton Fair, the complaints relevant to patents remain high over these years.
 

The year of 2013 has begun and various exhibitions are going to be held. It is advisable for exhibitors to pay attention to IPR protection when to take part in exhibitions. This article will provide some opinions and advice on IPR protection relevant to exhibitions and the author hopes this can be of some reference to you.

I. The relationship between exhibitions and IPR

The behavior of enterprises at exhibitions is closely related to IPR. Slight negligence may cause damages to the enterprise’s own IPR or infringe the IPR of other enterprises.

1. Exhibition is an act of disclosure which will affect novelty

Generally speaking, an exhibition is an excellent opportunity for enterprises to display new technology and new products in relevant industries or fields. A lot of enterprises choose to display their latest scientific research achievements or products at the exhibition in order to achieve publicity. However, an exhibition is a two-edged sword, particularly when it involves patents.

The reason is that, before filing a patent application, the product may lose novelty due to exhibition. Once an invention loses novelty, it would not meet the requirements of a patent application, so the product exhibited would lose the opportunity to be patented.

The Patent Law of China stipulates several circumstances where the disclosed inventions or creations would not lose novelty. Among them, one circumstance is when “the inventions or creations were displayed in the exhibition that hosted or recognized by Chinese Government or at an international exhibition for the first time”. However, in practice, the examination on exhibitions where novelty is claimed not to be lost due to the disclosure is very strict by the SIPO.

First of all, the examination on the levels of exhibitions where novelty is claimed to not be lost due to the disclosure is very strict. The international exhibitions hosted by the Chinese Government include those hosted by the State Council and ministries or those hosted by other organizations or local governments approved by the State Council. The international exhibitions recognized by the Chinese Government include those that are hosted abroad and recognized by the State Council and ministries (regarding these exhibitions, in addition to the products from the hosting country, there must be products from other countries). The public disclosure at international exhibitions that are not hosted or recognized by the government could not support the claim that the novelty is not lost.

More importantly, it is necessary to obtain the certificate issued by the host that is the relevant government in order to claim the novelty is not lost. However, the procedure for the government to issue the certificate is very complicated. Usually, the organizer is required to issue a certificate first and then applies to the government to issue the certificate. However, it is very difficult to obtain the certificate issued by the government. 

Thus, although the Patent Law of China stipulates that in some circumstances the novelty is not lost due to public disclosure, in practice, it is very difficult for enterprises to claim that the novelty is not lost if the inventions or creations were disclosed before the application date.

2. Commercial use or offering to sell may infringe IPR

Several IPR infringement issues often involve exhibitions. The IPR infringements of exhibitors are mainly reflected in the following aspects:
 

The detailed explanation is as follows:

(1)Trademark Infringement

According to Trademark Law, Implementing Regulations of Trademark Law and Interpretation of the Supreme People’s Court on Several Issues Concerning the Trial of Trademark Civil Dispute Cases, any of the following acts shall be an infringement of trademark: to use a trademark that is identical with or similar to a registered trademark in respect of the same or similar goods without the authorization from the trademark registrant; to sell goods that infringes the exclusive right of a registered trademark; to use a sign that is identical with or similar to the registered trademark of another person, with respect to the same or similar goods, as the name or decoration of the goods, which is misleading among the public; to noticeably use the word that is identical with or similar to the registered trademark of another person as the trade name on identical or similar goods, which easily causes confusion among the relevant public.

In recent years, the infringement cases of directly using others’ registered trademarks are dropping off, but the unnoticeable infringement cases are increasing, such as using others’ well-known trademark as the name of goods or on the package. Some exhibitors do not exhibit the infringing product samples, but discuss business with customers only with the brochures bearing the infringing trademark. Although the products are not exhibited, the brochures are advertising materials at exhibitions of which the purpose is to trade, and is captured under “use”. As long as the use of the trademark of another person on the package and container of goods or the use is for trade or advertising (such as the above mentioned brochures) or in business activities, it constitutes trademark infringement.

(2)Patent Infringement

It is stipulated in Article 11 of Patent Law of China that, after the grant of patent, no entity or individual may, without the authorization of the patentee, offer to sell the patented product. That is to say, the right of offering to sell is entitled to the patentee.

Article 24 of the Several Regulations of the Supreme People’s Court Concerning the Trial of Patent Dispute Cases prescribes “To offer to sell prescribed in Articles 11 and 63 of the Patent Law refers to the declaration of intention of selling goods by means of advertisement, displaying in a shop window or in an exhibition.”

Thus, the exhibition of products shall be deemed as an act of offering to sell.

If the products on exhibition are suspected to infringe the patent of another person, the exhibition as a means of offering to sell is suspected to infringe the patent of another person.

(3)Copyright Infringement

Articles 46 and 47 of Copyright Law of China stipulate various copyright infringing acts.

The disputes on copyright infringement account for a small proportion of the IPR disputes at exhibitions. Generally speaking, the design of exhibition booths, brochures, slogans, product instructions, pictures, as well as software and background music used at an exhibition, may infringe copyright of another person if they are not properly handled. For example, when introducing the products on the brochures, the exhibitor uses pictures from another person for publicity without authorization, which is an act of plagiarism and constitutes copyright infringement.

In some special industries, for example toys, the products constitute works which are protected by Copyright Law. The exhibition of toys designed or created by others constitutes copyright infringement.

(4)Unfair Competition

Anti-unfair Competition Law of China stipulates 11 acts of unfair competition explicitly. Among them, the acts regarding IPR are market transactions by deceptive means stipulated in Article 5, false or misleading publicity in Article 9, trade secrets infringement in Article 10 and business discrediting in Article 14.

Quite a number of the IPR cases in exhibitions are relevant to unfair competition. For example, the unrealistic or overstated publicity of the function, usage, technical features and so on of the products may be deemed false publicity, which is in violation of Article 9 of Anti-unfair Competition Law. The use of a unique name，package，or decoration of another’s famous commodity，thereby misleading the relevant public on the source of goods, may violate Article 5(2) of Anti-unfair Competition Law. If the information at the exhibition is suspected to infringe trade secrets of another person, such act may violate Article 10 of Anti-unfair Competition Law. If the exhibitor fabricates or spreads false information at the exhibition in order to damage the competitors’ commercial credit or product reputation, such act may violate Article 14 of Anti-unfair Competition Law.
 
II. Points Worthy of Notice Relevant to IPR in Exhibitions for Enterprises

1. Points Worthy of Notice before exhibition

(1) File patent applications for new products timely

As mentioned above, it is easy to lose novelty if the new products are exhibited. And since the exhibition is normally held by an industry, the participants will usually be in the same industry. The new technology of a company would come into focus and it is very easy for new products to be imitated by others. Product innovation costs a great deal of money and time, but imitation is much easier. If the enterprise exhibits the new products or technology which has not yet applied for patent, it is very easy for the products to be imitated and it is very difficult for the exhibitors to claim rights. That will be a great attack to the exhibitors. Thus, the enterprises at exhibitions need to plan ahead and file patent applications for the new products and technology actively and timely so as to cope with the potential infringement.

(2) Investigate the situation of exhibition joined by the competitors

The enterprises should pay close attention to the development trend of the industry, especially to the products and technology exhibited by the competitors. The enterprises in obvious competition should pay more attention with respect to this point. To learn the situation of exhibition of the competitors helps the enterprises learn the trend of development of the products and technology of the competitors and predict the possibility of the IPR being infringed so as to make preparations in advance and cope with the infringement promptly.

(3) Before exhibitions, search relevant IPR in case of infringing other’s rights

It is of the same importance for exhibitors to take measures to avoid infringing other’s rights as it is to protect its own IPR. A product exhibition is held for a great number of enterprises and individuals. It is possible that a product can be accused of infringement due to negligence. In order to have a smooth exhibition and ensure no disputes arise, it is better to do the search in advance just in case.

For the “new products” at exhibitions, it is advisable to do a patent search. For various signs, it is advisable to do a trademark search. And for the products or signs of which the exhibitor owns the relevant intellectual property right, it is advisable to take along the relevant certificates and other certified documents. 

(4) Make preparations to cope with infringing products

As exhibitions don’t last long, it is often too late to take relevant measures after finding out about infringing products. For example, when filing complaints at exhibitions, foreign enterprises need to file a notarized and legalized identity certificate and Power of Attorney. Usually, it takes more than 2 weeks to do the notarization and legalization. The exhibition will usually be over by the time the notarization and legalization is done after finding out the infringement.

Thus, exhibitors, especially whose IPR is often counterfeited, may make necessary preparations before the exhibition. Once they find out about the infringement, the enterprise may take measures promptly. You may refer to the following contents for detailed documents which need to be prepared.

2. File complaint against the suspected infringing products

The exhibitors can file complaints according to IPR Protection Measures in Exhibitions once they find out about infringing products at the exhibition.

(1) Complaint office

According to Measures for IPR Protection in Exhibitions, if the exhibition lasts three days or more and if the administrative department of the exhibition believes it is necessary, the exhibition host shall establish an IPR complaint office during the exhibition. The complaint office usually is comprised of members from the host, the administrative department of the exhibition, the administrative authorities for patent, trademark, and copyright and so on. If the exhibition does not set up a complaint office, the local IPR administrative department may receive the IPR cases that arose at the exhibition.

The main responsibilities of the complaint office at the exhibition are as follows:

a. Receive complaints of IPR holders, and suspend the exhibition of the products suspected of infringing on IPR;

b. Transferring the relevant complaint materials to the competent IPR administrative departments;

c. Coordinate, supervise and urge the handling of the complaints;

d. Create statistics and perform analysis on the information regarding the IPR protection during exhibitions; 

e. Other relevant matters.

(2) Materials required for filing a complaint

According to Measures for IPR Protection in Exhibitions, IPR holders shall, when filing a complaint with the office, submit the following materials: 

① Legitimate and effective IPR ownership certificates:

Where any patent is involved in, the patent certificate, the patent gazette, the identity certification of the patent owner, and the certification on the legal status of the patent shall be submitted; where any trademark is involved in, the trademark registration certificate which should be confirmed by the signature or seal of the complainant and the identity certification of the trademark owner shall be submitted; where any copyright is involved in, the copyright certificate and the identity certification of the copyright owner shall be submitted.

② Basic information of the suspected infringer

In exhibitions, the right owner needs to confirm the information of the exhibitor who exhibits the infringing product once the infringing product is found. If it is learned that a certain exhibitor is very likely to exhibit the infringing products, it is advisable to obtain the information of the exhibitor from the website of the administration of industry and commerce in advance.

③ The grounds and evidence of the suspected infringement; and

④ Where an agent is entrusted to file a complaint, the Power of Attorney shall be submitted.

Among the above-mentioned materials, where the complainant is from abroad, the identity certification of the enterprise and the Power of Attorney should be notarized and legalized in the country of nationality.

(3) Process of Complaint

The process of complaint is as follows:


 

① As for exhibitions with a complaint office, the IPR holders may file complaints with the office during the exhibitions upon finding out about the infringing products. In the circumstance that the complaint office confirms that the materials submitted by the IPR holder are complete, it takes 24 hours for the office to transfer the materials to the relevant IPR administrative department. After receiving the complaint materials, the relevant IPR administrative department shall inform the alleged infringing enterprise promptly. At the same time, the IPR administrative department may investigate to obtain evidence, consult and copy the documents relevant to the case, inquire with the involved parties, conduct an on-site inspection by means of taking photos, camera shooting, etc., or collect evidence through sampling. The alleged infringer may respond, but whether or not they do would not affect the administrative department decision-making. Before transferring the complaint materials to the relevant IPR administrative departments, the complaint office may mediate for the cases in which infringement is confirmed. When the mediation fails, the materials shall be transferred to the IPR administrative departments. After investigation, if the IPR administrative department believes the infringement is constituted, it may make penalty decisions corresponding to various IPR cases. If the infringement is not constituted, the case shall be concluded.

② As for exhibitions without a complaint office, the IPR holders may file complaints directly with the relevant local administrative departments upon finding out about infringing products. The process is as same as mentioned in the above point.

(4) Measures for Complaints

The IPR administrative departments may the following measures after the infringement is confirmed:

① As for those of suspected infringing patent right, if the local IPR administrative department determined that the infringement is constituted, the decision shall be made in accordance with the provision that prohibits offering for sale, as prescribed in Article 11(1) as well as the provision that orders the infringer to stop infringement immediately, to remove the infringing products from the exhibition, destroy the publicity materials and change the exhibition boards of the infringing products prescribed in Article 57 of Patent Law.

② As for those suspected of infringing trademark right, if the local administration of industry and commerce determines that the infringement is constituted, it shall decide the punishment in accordance with Trademark Law and the Regulation on the Implementation of the Trademark Law, etc.

③ As for those of suspected infringing copyright, if the local copyright administrative department determines that the infringement is constituted, it shall decide the punishment in accordance with Article 47 of the Copyright Law so as to confiscate and destroy the exhibited products and publicity materials, and change the exhibition boards of introduction to the exhibited products.

④ As for the counterfeiting of another’s patents or passing unpatented products off as patented products or unpatented methods as patented methods, the local intellectual property office shall decide the punishment in accordance with Articles 58 and 59 of Patent Law.

After the investigation of IPR administrative department, where a complaint is determined untenable and no infringement is caused by the respondent, the relevant measures should be stopped at once. For example, some organizers may ask the exhibitors to cover or withdraw the relevant exhibited products before the investigation is completed. After the infringement is confirmed as not constituted, the organizers shall resume the exhibition at once so as to maintain the lawful rights and interests of the respondent.

3. Preservation of evidence regarding infringement in exhibitions

Upon finding suspected infringing products at the exhibition, it is necessary for the IPR holders to preserve the evidence immediately under the following circumstances: if the IPR holders cannot be sure if they are the infringing products on site; the case could not be settled during the exhibition as most cases could not since the exhibition lasts only a few days but it usually takes longer time to determine IPR infringement; the case may need to be solved by judicial means. Thus, usually, the IPR holders or lawyers entrust the Notary Office with evidence preservation to the suspected manufacturers or distributors who take part in exhibitions.

As for special occasions such as exhibitions, it is advisable for the IPR holders to prepare well before for the preservation of evidence. Generally, these are the following steps

① To confirm the location of the exhibition in advance by people that the suspected infringers do not know.

② The notarization formalities should be complete; these are usually handled by a law firm.

③ To elaborate the evidence to be preserved to the notaries. It would be best to present the products of the IPR holders or the pictures and the suspected infringer’s products or the pictures to the notaries and make them familiar with the products.

④ To have the notaries at the exhibition booth of the suspect infringers with the presence of lawyers.

⑤ To take photos of the entrance of the exhibition, logo of the exhibition, the exhibition booth of the suspected infringer, and the suspected infringing products. It would be best to show the responsible person of the suspected infringer in the pictures.

⑥ To ask for the name cards or other materials that show the information of the suspected infringing products or infringer.

⑦ To notarize the purchase of the suspected infringing products if the suspected infringer also sells the products.

After preserving the evidence, the IPR holder should check the evidence and make up a written list as an attachment to the notarization document or write it in the notarization document with lawyers before sealing these materials by the notary office. The backup list should also be sealed by the notary office and kept by the lawyers.

After preserving the evidence, the IPR holders can choose to file a complaint at the exhibition or file a complaint with the local IPR administrative department or institute a legal action after the exhibition.

4. Preservation of evidence regarding publicity at exhibitions

As mentioned above, the exhibition of products is a means of disclosure. For products that have not yet been included in a filed patent application, they can easily lose novelty and be imitated by others at the exhibition. Moreover, many enterprises may file patent applications based on the information of new products or technology of others leaned from the exhibition. Technically speaking, such patents should not be granted due to lack of novelty. However, in practice, the examiners of SIPO usually determine patentability only according to the published literature they searched and have no idea if the relevant technology is disclosed due to an exhibition, so such patents are likely to be granted. The patents would create obstacles to the continuous manufacturing and sales of the relevant products if the products or technology developed by oneself but was filed for patent applications by others.

Thus, we advise you to file patent applications before exhibiting the new products or technology. As for products not filed for patent applications for various reasons, it is advisable to preserve the exhibition as evidence through notarization in order to fight against the applications of others for the imitated technology and products.

Other than as an opportunity to exhibit new products or technology, an exhibition is also a good opportunity to preserve evidence of the technology known to the public or used by the public due to the publicity of exhibition and the exhibiting of a number of products simultaneously. That is to say, all the products and technology at the exhibition and their information can be notarized. In case someone files applications for the imitated inventions or creations, the preserved evidences can be used to prove the public awareness and use effectively in the invalidation procedure.
 

（2013）