jipa japan intellecual property association anti-counterfeits activities by japanese companies in...

JIPA Japan Intellecual Property Association

Anti-counterfeits Activities by Japanese Companies In China

Yasuhiro Tabata

Managing Director, JIPA

October 29, 2003


Contents

(Part I Introduction)

1. Legal Environment in China

2. History of IP System in China

3. Distribution of Counterfeits on Japanese Products

4. Damage Caused by Counterfeits in China

5. General Approach of Japan toward Chinese counterfeits

(Part II Specific Activities)

6. A concept of Anti- counterfeits

7. R&D, Marketing & Anti-counterfeits Strategy Forming

8. Obtainment of IP Rights

9. Information, Investigation & Identification of Counterfeits

10. Crackdown of Counterfeits

11. Assessment of Crackdown Results


Part I Introduction

1) A complex legal system consisting of custom and statute.

2) Insufficiency in “Rule of Law”

3) Insufficient independence of judicial system

4) insufficient transparency in legislative, Administrative and judicial procedure

5) Local-protectionism in legislative, Administrative and judicial procedure

1. Legal Environment in China


2. History of IP System in China

• 1980 Membership in WIPO• 1982 Trademark Law • 1985 Patent Law• 1990 Copy Right law• 1993 Unfair Competition Law • 2002 Entry into the WTO and adherence to the Tri

ps


WestEurope4.8%

Midl e Ea s t& Africa

3.2%

LatinAmerica

2.4%

NorthAmerica

3.5%

ASEAN17.3%

EastEurope1.3%

Hong Kong12.9%

Korea14.8%

Taiwan16.0%

China23.8%

WestEurope5.8%

Midl e Ea s t& Africa

4.5%

LatinAmerica

3.7%

NorthAmerica

6.9%

ASEAN24.3%

EastEurope

2.4

Hong Kong8.2%

Korea12.2%

Taiwan13.9%

China18.2%

By manufacturing country 1)By Consuming country 2)

3. Distribution of Counterfeits of Japanese Products

1) 2): “Counterfeit Report 2001” by JPO


4. Damage Caused by Counterfeits in China

1)Number of Companies suffering from counterfeits

360417 385

752

0

200

400

600

800

1 2 3 41997 1998 1999 2000

2) Number of Companies suffering from counterfeits • 5-7% of the total world trade volume being that of the counterfeiting goods Accordi

ng to a survey of ICC.

• Damage suffered by Japanese companies in China market would being up to 850 billion Yen.


5. General Approach of Japan toward Chinese counterfeits

Central Administration

Private Organization like JIPA

Private Companies

China A

dministration

“Special Report” by Task Force on Industrial Competitiveness and Intellectual Property Policy (2001)

Strengthening of actions toward China in government for better-protection IP rights of Japanese companies

“Outline of National IP Strategy” by “The Strategic Council ON IP “ hosted by the Prime Minister (2002.3)

Policy of strengthening protection of IP rights overseas

“Guideline on the Action against Counterfeiting goods in China” by METI (2003.1.22)

•Establishment IP center in Beijing, Shanghai, Hong Kong in order to help Japanese company's activities against counterfeits.•Cooperation with China Gov. on raising the IP-protection-moral among Chinese people

Approach by Japanese Government

Missions dispatched by JIP, JTMA etc. lobbing China Gov. for better- control of counterfeits

Approach by Private Sectors

Missions dispatched by “International IP Protection Forum” requesting China Gov. To improve its IP system and crackdown of counterfeits

Joint Approach by Gov.

and Private Sectors


6. A concept of Anti- counterfeiting activity

Part II Specific Activities

R&D, Marketing & Anti-counterfeits Strategy Forming

Obtainment of IP Rights

Assessment of Crackdown

Results

Information, Investigation & Identification of

counterfeits

Crackdown of Counterfeits

(1)

(5)

(4) (3)

(2)


7. R&D, Marketing & Anti-counterfeits Strategy Forming

1) Strengthening of technology innovation in R&D from the point of preventing counterfeits

2) Designing of products with technical characteristics being difficult to imitate

3) Development of business models capable of making counterfeiters difficult to sell their counterfeiting goods

4)Development of efficient strategy for crack down counterfeits

R&D, Marketing & Anti-

counterfeits Strategy Forming


8. Obtainment of IP Rights

1) System concerning obtainment of IP rights in China

People’s Congress

State IP Office

State Council

State Administration of Industry and Commerce

State Publication Bureau

Patent Office Trade Mark Office Copyright Bureau

Granting patent for invention, utility model and

design

Registration of

software Registration of

trade mark



No Nation CorparationsApplications forinvention

1 NL Plillips 14152 J P Matsushita 13863 KR Samsung 10034 J P Mitsubishi 7045 KR LG 5336 J P Toshiba 5257 J P Canon 5048 DE Siemens 5009 J P Sony 48510 J P NEC 472

2) Strengthened Obtainment of IP Rights by Japanese Companies in China

Top 10 Foreign Corporation According to Their Patent Applications in 2002



(1) Too long time needed for grant of patents for invention→5-7 years at average, 7-8 years in edge-cutting field.

(2) Insufficient Protection for Cutting-edge Technology →e.g. the software can not be a subject of a patent.

(3) Insufficient protection of patent for industrial design→No protection for design-in-part→Many false or double patents for industrial design, because of non-substance-examination system.

(4) Insufficient protection of famous foreign trade markStill no foreign trade mark having been registered at State Administration of Industrial and Commerce (SAIC) as a famous trade mark.


3) The Main Problems in the System of I Obtainment


(1) Lobbying Chinese government to review its IP laws and practices to access the global standards

(2) Cooperation on staff education with China side• Planed to dispatch technology experts to China to train Chinese examiner under the joint efforts by Japanese private IP organizations or companies. • Acceptance Trainees from SIPO, SAIC under JPO's Human Resource Development Project every year.


4) Japan’s Approach Toward the main Problems


9. Information, Investigation & Identification of counterfeits

1) Information Collecting( Information source):

•Chinese administrations in charge of controlling counterfeits ( AIC, TSB, Customs, etc.) • Chinese private investigation companies• Local branches or dealers of Japanese company• informants

2) Investigation of suspected counterfeits: Use of Chinese local investigation companies for carrying out further investigations of the suspected counterfeits based the information gathered from above information source, to reveal the detail of the suspects.


counterfeits


3) Preliminary Identification of Alleged Counterfeiting Goods Usually for the case the counterfeiter is a whole seller or retailer

4) Problems (1) Insufficient information share between parent company and its Chinese local subsidiaries or dealers (for a few companies).

(2) Difficulties on catching the good timing to take action

(3) Time consuming for the identification of counterfeiting goods (as deadly copied original products).


counterfeits

To Dispatch IP experts responsible for anti-counterfeits from parent company to its Chinese affiliate

Measure

No good idea yet !

To Develop identification technology to make counterfeiting goods easy to identify

Measure


10. Crackdown of Counterfeits 1) IP enforcement System in China


Central Level

Regional Level

State IP Office

State Admini-stration of Industry and Commerce

People’s Congress

State Council

State Publi-cation Bureau

Copyright Bureau

Ministry of Public Security

Local Patent Administration Bureau

Local AIC

Controlling 　Infringementof patent

Local Copyright Bureau

Local PSB

Local government

Controlling TM infringement and Unfair Competition

Controlling Copyright Infringement

Controlling products with Poor Quality

Supreme Prosecutor

Office

Supreme Court

Local Pros

Local Court

State Technology Supervision Bureau

Local TS B

Criminal procedure


2) Crackdown of Anti-counterfeits activity by Japanese Company in China

(1) Remarkable Progress made • Canon K.K.2001/Oct. to 2002/Mar.: 5 to 6 cases/month raid, supplies sale raised up to 30%2002/Mar. to 2002/Jun.: 43 cases raid, supplies sale raised up to 70%(Key Success factor ) a) 2 full-time IP experts dispatched to Beijing in charge of anti-counterfeits affair 　　

b) Continuous action against counterfeits

c) Strong position against counterfeits, which having been demonstrated through the activities of corporation top officer with China administrative bodies, law firms and investigation companies.



• Seiko-Epson K.K. 37 cases raid(2002); Seized the counterfeiting goods being of value of about 380 million Yen.(Key success factor) a)Special Project Team with the leader being director in

charge of corporation IP affair 　 b) Raiding counterfeits systemically and strategically

campaign against counterfeits with full use of mass-mediato demonstrate strong position toward counterfeiters.



• Matsushita Electric Industrial Co, Ltd. a) Two IP experts having dispatched to China( one to Beijing in1994, another one to Guangzhou in 1997) b) Each of 43 Chinese branches has One staff in charge of IP.

c) Group IP meeting held twice each year. (Key Success factor ) To build a win-win relations with China(Administration, Law firms, etc.) 　



3) Problems Concerning anti-counterfeits in China(1) problems at Chinese side

• Insufficient number of qualified IP enforcement Staffs (AIC staff s, TSB staffs or local court judges) • Local-protectionism in a few local IP enforcement bodies (a) No action on its own initiative to take against counterfeits in 　 quite a few local IP enforcement bodies (b) A few decisions on counterfeits case without fairness and transparency • No damages in Administrative Enforcement (by AIC,TSB) • Expensive and time-consuming in civil Procedure (courts) compared with administration procedure. •Criminal Enforcement(police, prosecutor) not fully engaged yet 　


(1) Lobbying Chinese government to review its IP laws and practices to access the global standards(2) Cooperation on human source with China side

Measure


2) issues to solve at Japan side(1) No full-time staff in its Chinese subsidiary in charge of affair of anti-counterfeits in quite a few Japanese companies.(2) Insufficient budget for anti-counterfeits in quite a few Japanese companies

(3) Inefficient case-by-case raid tactics


To persuade the top managing officer by assessing exactly anti-counterfeiting activities to make its merit more clear

Measure

No good idea yet !


11. Assessment of Crackdown Results

1) assessment to the marketing result of anti-counterfeits activities

2) feeding-back of the assessment results to the stage of “R&D, Marketing & Anti-counterfeits Strategy Forming” to develop a better anti-counterfeits strategy and realize the spiraling-up of anti-counterfeits cycles.

3)Issues to solvehow to assess exactly the marketing result which caused by the anti-counterfeits activity having been taken. And attention to be paid on the possible conflict with other laws e. g. anti-trust law (competition law), while carrying out the anti-counterfeits activities.

Assessment of Crackdown

Results


- END -

Thank you !

jipa japan intellecual property association anti-counterfeits activities by japanese companies in...

Documents

distribution of counterfeits

lobbing china

china market

concept of anti counterfeits

history of ip system

general approach of

china yasuhiro tabata

obtainment of ip rights