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Trade Marks and Trade Secrets in the Service Industry. Alessandra Chies 18 March 2015

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Trade Marks and Trade Secrets in

the Service Industry

Alessandra Chies

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Today’s speaker

Name: Alessandra Chies

Occupation: Partner

Firm: Ferrante Intellectual Property

Location: Beijing, China

Email: info@ferrante.asia

Speaker’s Bio:

Alessandra is a partner of FERRANTE INTELLECTUAL PROPERTY. Alessandra has advised and assisted European companies from a wide range of industries on various aspects of IP prosecutions and enforcement in China, evaluating

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Agenda

1. What is a Trade Mark and How to Protect It

2. What is a Trade Secret and How to Protect It

3. How to Enforce your Trade Mark and Trade Secret in Case of

Infringements/Misappropriation 4. Q&A

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Poll 1

Question: Do you think that registering a trade mark when offering services is as important as when offering products?

A. Yes, I think it is just as important. B. No, I don’t think it’s as important. C. I am not sure.

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First things first: what is a trade mark?

Do I have to register a trade mark even if I offer

services?

Trade marks are not just for products but are vital also to identify services

A trade mark is a sign (or a sound, or a shape, a color, a sentence ) which distinguishes products or services of a particular source from one another

IPRs are territorial rights: they are only protected in the territory/jurisdiction where they are registered. Your trade mark in your home country (or Hong Kong, Taiwan, Macao) is not valid in Mainland China

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Registering your service mark in China as soon

as possible is very important

China uses the 'first-to-file' system, meaning that you may lose legal protection if a similar/identical mark has already been or will be registered by another party (do not rely on prior-use)

The sooner the better!

A trade mark owner can be an individual or a legal entity (but foreign entities/individuals have to use a China Registered Trademark Agent for the procedure)

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Cost and timing for trade mark registration

• The official fees are CNY 800 (EUR 120), per trade mark per class (for a maximum of 10 services). Each service after the 10th has an extra fee of

CNY 100 (roughly EUR 15)

• It takes about 1 year for a trademark to be registered (if nobody starts an opposition procedure or if your trade mark is not refused for other reasons (i.e. a similar/identical mark has already been registered/filed)

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The Chinese system may be different from that

of your home country

China uses the Nice Classification but with strict sub-class division

The assistance of a professional is very important : they will be able to guide you through the peculiarity of the system

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Poll 2

Question: The Nice Classification has 45 Classes. How many relate to services?

A. 5 B. 10 C. 6 D. 11

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Nice Classification: 45 Classes, 11 for Services

(35-45) but with detailed sub-class division

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Practical example

Your company offers various repair services for home appliances: boilers repair, wallpapering, painting, electric appliance installation, air condition installation, furniture repairing, etc. and you register the trade mark in Class 37

Class heading of Nice Classification:

Class 37: Building Construction; Repair; Installation Services

Make sure you evaluate all subclasses of Class 37 otherwise a third party may register the same service mark in the same class but in different

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Better to be safe than sorry

• Consider at least one service per subclass

• Consider registration of the trade mark also on certain goods that may be

closely connected with your business/used in providing your services • Trade fairs participation

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Other important aspects to consider

• Protection starts from the registration date in China

• For enforcing an international trade mark extended to China, a further document is required: the confirmation certificate

• The trade mark can be cancelled if it is not used for 3 years from the registration date in China

• In China, trade marks shall be used exactly in the way they have been registered

Chinese translation/transliteration of the trade mark shall be registered as well

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Monitor the market-place (also online) and

CTMO Gazette

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What can I do if someone has

applied/registered a similar/identical trade

mark?

Oppositions – China Trademark Office (CTMO) - for not yet registered marks

Invalidation actions - Trademark Review and Adjudication Board- TRAB (absolute and relative grounds)

Cancellation Actions (CTMO)

- Non-use

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What can I do if someone is infringing my trade

mark (registered in China)?

Administrative

Enforcement Civil Lawsuits

Criminal Enforcement

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What is a Trade Secret?

Trade secrets can be technical information but also operational information, such as processes, recipes, marketing/product strategies, customer lists, production processes, pricing information, non-patentable or unpatented technology/processes.

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Trade Secret examples

Search Algorithm

The New York Times's Best-Seller List: the method for compiling the data is classified as a

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Definition of Trade Secret in China

Article 10 of the China Anti-Unfair Competition Law defines “trade secret” as: 1. Technical and business information that is unknown to the public;

2. Which has economic value and practical utility and can bring competitive advantages for the right owner;

3. For which the trade secret owner has undertaken measures to keep it secret.

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Advantages/disadvantages of Trade Secrets

protection

Advantages:

• Through trade secret you can protect non-patentable processes

• Trade secrets do not have a set term of protection (so can last longer than

other IPRs)

Disadvantages:

• Obtaining information through reverse engineering or through research and development efforts is not considered trade secret infringement

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Keep it secret!

Once you have information or a process, etc. that is unknown to the public and gives you a competitive advance, you must put in place necessary steps to keep it secret, otherwise you may lose any right over it

Training employees is a core part of protecting trade secrets

Around 60% of misappropriation cases are related to business secrets

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Prevention is very important

!Remember that in a lawsuit you have to prove that you put in place the protective measures!

• Limiting access to trade secrets only to certain personnel • Password protection

• Locked cabinets

• Stating on the carrier that it encloses classified information (i.e. Confidential- do not disclose)

• Block possibility of transfer files and adding contacts on chat engines (where files can be transferred)

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… more tips

• Executing carefully drafted confidentiality agreements and

non-disclosure agreements (employees/business partners) • Enclosing specific clauses in employment contract

• Put in place and record periodical trainings for employees • Sign additional logs when employees access the trade secret

• Adopt any other suitable measure for ensuring the confidentiality of information

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Poll 3

Question: Have you put in place any of the measures above to protect your Trade Secrets?

A. No, I do not have any information/process that is a Trade Secret. B. Not yet, but I will do.

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What can I do if someone is using my trade

secret to their advantage?

Administrative

Enforcement Civil Lawsuits

Criminal Enforcement

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Difficulties in Trade Secret lawsuits: burden of

proof and evidentiary requirements

Plaintiffs in a trade secret misappropriation lawsuit must prove the following

three elements (mostly with documentary evidence) :

1. Existence and ownership of the trade secret. Providing evidence of: • content of the trade secret

• its commercial value

• protective measures taken to keep it secret

2. That the Defendant possesses information that is identical or

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Take-away Messages

Always register your trade mark as

soon as possible in China

Put in place well constructed

measures to protect your trade secret

Always consult a PRC Lawyer to evaluate how to register and enforce your rights

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Q&A

Name: Alessandra Chies

Firm: Ferrante Intellectual Property

Location: Beijing

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PLAY the Serious Game

Interactive training and learning tool • Common business scenarios to

experience doing business, protecting and enforcing IP in China

Available online at:

http://www.chinaiprhelpdesk. eu/en/serious-game/

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References

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