China and the US, as the world's two most important economic entities with a GDP of more than $10 trillion, have finally reached the first phase of the Sino–US Economic and Trade Agreement (Sino–US agreement) on January 15 2020, which eases the haze of world economic development and boosts the confidence of market investors.
IP protection
The first chapter of the Sino–US agreement focuses on IP rights, which not only shows the important position of this issue in the Sino–US economic and trade negotiations, but also shows that both countries attach great importance to the protection of IP rights and can continue to expand and deepen cooperation under the common interests of both sides.
In terms of IP protection, the Sino–US agreement further divides it into five parts:
Protection of trade secrets;
Patent link of pharmaceuticals;
Protection of geographical indications;
Treatment of malicious rush to register trademarks; and
Law enforcement and rights protection of counterfeit products.
Among them, the protection of geographical indications is one of the most interesting aspects. In particular, the relevant contents may cause disputes in the future international coordination of geographical indication protection rules, which has attracted special attention.
According to the Sino-US agreement, the two sides should ensure full transparency and procedural fairness in the protection of geographical indications. At the specific level of protection, both sides should:
Protect the using of generic terms;
Respect the prior trademark rights;
Clearly allow the objection and cancellation procedures; and
Provide fair market access for the export products of the other party relying on the trademark or using the common name.
According to the Sino–US agreement, the parties shall ensure full transparency and procedural fairness with respect to the protection of geographical indications, including:
Safeguards for generic terms (also known as common names);
Respect for prior trademark rights;
Clear procedures to allow for opposition and cancellation; and
Fair market access for exports of a party relying on trademarks or the use of generic terms.
As for the protection of generic terms, the key point is the accurate identification of them. In 2017, Article 10 of “Provisions on Several Issues concerning the Trial of Administrative Cases involving Trademark Authorisation and Confirmation” issued by the Supreme People's Court of China stipulates that in principle, the recognition of the generic term shall be based on the general knowledge of the relevant public nationwide, and in particular, on the common appellation in the relevant market.
However, the recognition rules of generic terms in the Sino–US agreement are obviously more detailed and stricter than the above provisions. In particular, it is emphasised that in determining whether a name is a generic term in China, the factors to be considered shall also include “whether the good in question is imported into China, in significant quantities, from a place other than the territory identified in the application or petition, and in a way that will not mislead the public about its place of origin, and whether those imported goods are named by the term”.
Obviously, the US side hopes to rely on some objective criteria when determining the generic term. However, it is worth exploring whether the above objective standards have legitimacy and rationality from the perspective of a third party, to truly become a widely accepted universal standard.
Measures revised
Regarding respect for the prior trademark rights, it should be noted that the State Intellectual Property Office of China revised “the Measures for the Protection of Foreign Geographical Indication Products” (measures) on November 27 2019.
Article 5 of the new measures stipulates the objects to be protected by geographical indication products in China, and additionally adds the provisions that the geographical indication products to be protected shall not conflict with other prior rights. Among them, the so-called ‘other prior rights’ naturally include trademark rights. This means that for new protected geographical indications abroad, if their obligees seek to obtain extended protection in China, they will experience more rigorous examination than before, and the difficulty of obtaining rights will increase.
As for the opposition and cancellation of the geographical indication products, Articles 12 to 16 and Articles 33 to 35 of the above measures stipulate the relevant procedures respectively, so the form has met the provisions of the Sino–US agreement.
In addition, Article 16 of the measures also clearly stipulates that the application for review may be filed if the decision on opposition of geographical indication is not satisfied. However, it should be noted that the opposition review decision is final. Therefore, the examination procedures for opposition, opposition review and cancellation of geographical indications are all set up in the State Intellectual Property Office, which does not need to accept judicial review, so as to speed up the efficiency and authority of administrative examination of the application for registration of geographical indications.
With regard to fair market access, the US is concerned about the possible negative impact of agreements on geographical indication protection signed between China and other international regions. More directly, the “EU–China Agreement on cooperation on and protection of geographical indications” (China–EU agreement) reached on November 4 2019 should not hinder the export of US goods and services using trademarks and generic terms to the Chinese market.
According to published text of the China–EU Agreement, the agreement contains only 14 articles, but in fact, it sets a quite high level of protection requirements and rules for geographical indications. In the appendix of the statement, 275 geographical indication products (175 of these will be added by China and the EU as planned four years after the agreement comes into force), with regional characteristics that need to be protected by each other are also included.
It should be noted that the Sino–US agreement requires that if a part of the composite name that requires protection of geographical indications is a generic term, it shall not be protected. Although the geographical indication products listed in the China–EU agreement meet the definition of geographical indication regulated by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), they may not meet the requirements by the Sino–US agreement.
For example, the Greek most famous dairy products and iconic food feta. According to the provisions of the China–EU agreement, after the end of the transition period (eight years after the entry into force of the agreement), the term ‘feta’ will not be used in the People's Republic of China as a generic term for cheese. Therefore, whether there will be conflicts in practice and how to carry out the specific operation of the above agreements and the contents of the respective obligations in the agreements need to be further observed and clarified.
Since China joined the Paris Convention for the Protection of Industrial Property in March 1985, it has started to protect geographical indications at home and abroad. For example, the first geographical indication product to apply for registration and protection in China is Florida Citrus from the US.
As the foreword of the Sino–US agreement states “China recognises the importance of establishing and implementing a comprehensive legal system of intellectual property protection and enforcement as it transforms from a major intellectual property consumer to a major intellectual property producer.
For a country with a long history, vast territory, complex landform and climate, China does not have a lack of qualified geographical indication products.
In China, the former General Administration of Quality Supervision, Inspection and Qurantine of China is responsible for the protection of geographical indication products as a special protection system, while the Trademark Office of the State Administration for Industry and commerce is responsible for the protection of geographical indication trademarks, both of which have been in operation for nearly 20 years. It should be said that the protection concepts of the two systems are obviously different.
The protection of geographical indication products emphasises the objective causal relationship between product quality, characteristics and origin conditions, while the protection of geographical indication trademark tends to protect the regional reputation of the mark.
The two protection modes complement each other in practice. In the latest reform of government institutions in China, the functions and powers of the protection of geographical indication products and geographical indication trademarks are centralised to the State Intellectual Property Office, which provides a precondition for the integration of geographical indication protection.
According to official statistics, by the end of 2019, 2385 geographical indication products and 5324 registered trademarks have been approved in China. Of course, most of them are owned by Chinese obligees.
Quantity itself is a kind of quality. The fact that such a large number of geographical indication products and/or geographical indications are seeking to be protected and registered means, on the one hand, geographical indications can bring real or potential huge commercial benefits to economic entities. On the other hand, China can become as important as Europe and the US in the protection of geographical indications, a sensitive and important issue of IP rights, but more important independent and balanced power.
On several occasions, the Chinese government has vowed to continue to be committed to maintaining the rule-based free trade system, jointly building an open world economy and promoting economic globalisation. Therefore, it is not in China's own interest to protect geographical indications improperly if it limits competition and leads to more trade barriers.
To avoid being trapped in the dilemma of being bound by bilateral agreements between China and the US as well as China and the EU, China also needs to take more active and positive actions in consideration of maintaining the general pattern of global free trade rules.
Final remarks
For the protection of geographical indications, especially for the reasonable scope of protection, China should put forward its own compromise, which is helpful to bridge the differences. In the world market, we need to advocate a more rational, pragmatic and intelligent attitude and way to look at the real needs and expectations of consumers, and continue to promote the formation of a more balanced and reasonable scheme and criteria for geographical indication protection that can be basically accepted by all parties.
Gang Hu
Attorney-at-law
CCPIT Patent and Trademark Law Office
T: +86 10 6604 6375
Gang Hu is the director of the international trademark department at CCPIT Patent and Trademark Law Office. He has more than 20 years of post-qualification experience working on contentious and non-contentious IP issue.
Gang has worked on a number of influential IP litigation cases that have been widely reported in the media, and awarded as annual guidance cases by the Supreme People’s Court. He regularly advises clients on strategies involving a wide range of IP matters and manages corporate portfolios across various industries.
Gang has published many articles in professional law reviews and periodicals, and has been consistently ranked as a leading trademark practitioner by domestic and foreign professional rating agencies.
