In a recent decision, a Chinese court imposed a fine lower than the statutory range under the Advertising Law of the People’s Republic of China (as amended in 2015) (“Advertising Law“). This suggests that courts retain certain discretion in reducing statutory sanctions under the Advertising Law. This decision, while not binding on other courts and may be specific to the facts, may be a welcome sign to minor and small-scale violators of the Advertising Law.
The case concerns the use of superlatives in advertisements. Article 9(3) of the Advertising Law prohibits the use of superlatives such as “national”, “highest” and “best”. The list is non-exhaustive. Other superlative words, for instance “world-class”, “supreme” and “No. 1”, have been found to fall foul of the provision.
The prohibition can catch the unwary since it applies irrespective of the intention of the advertiser and whether or not the superlative can be justified by objective facts. Violation of Article 9(3) carries, among other potential sanctions, a fine ranging from RMB 200,000 to RMB 1 million (about USD 31,000 to USD 156,000).
Before the recent judgment, it has been widely perceived that neither the court nor the authorities can impose a fine lower than the minimum of this range.
In this case, a store owner selling roasted chestnuts was fined RMB 200,000 by the authorities for advertising using the phrase “Top-of-the-top store for roasted chestnuts in Hangzhou” (“杭州最优炒货店”). The store owner was unhappy about the fine and appealed to the Hangzhou Xihu Court.
The Hangzhou court gave its judgment in May 2018, reducing the fine to RMB 100,000. In affirming its power to impose a fine lower than the statutory range, the court considered the Advertising Law in conjunction with the Administrative Punishment Law. The Administrative Punishment Law provides that the imposition of administrative penalties should take into account the facts, nature and seriousness of the violations of law and the damage done to the society. It is a mitigating circumstance where a person commits a relatively minor illegal act and promptly remedies the breach.
In reducing the fine, the court considered that the roasted chestnuts shop is a small-scale individually-run business. Furthermore, given that roasted chestnuts is a very common kind of food, customers are very unlikely to be misled by the superlatives. The court therefore concluded that the violation is relatively minor and that the harm done is minimal.
Virtually all industries are being reshaped with the use of Artificial Intelligence and advanced machine-learning. Everything from healthtech to self-driving vehicles, to education and smart homes, drones and space, social media, and beyond is being affected. These new technologies present a variety of commercial opportunities and the potential to change our daily lives. At the same time, new AI innovations bring many legal, policy, commercial, and strategic challenges that need to be considered thoughtfully across jurisdictions. In some instances, existing frameworks can be applied or adapted. For others, new paradigms and robust safeguards may be needed. And as machine-learning technologies continue to evolve, organizations will need dynamic, sophisticated compliance approaches.
If an AI system comes up with a technical solution that happens to infringe on third parties’ patent rights, or develops art or music that has too-uncanny similarities to known, existing works, who is the infringer?
In this guide, we highlight several of the key challenges and commercial opportunities for AI and advanced machine-learning. A specific chapter is dedicated to Intellectual Property issues such as:
- Ownership of patents, copyright and trade secrets
- Ownership of data
- Infringement challenges
…that’s the view of many of the respondents to our Brand Benchmarking 2018 survey.
Over 200 brand owners of all shapes, sizes, industries and locations were surveyed on how they manage their trademark portfolios. Our analysis revealed that:
- 93% of respondents believe that artificial intelligence (AI) will have a positive influence: saving them time and money.
- Six of the top 10 jurisdictions in which brand owners experience the greatest challenges in trademark prosecution are in Asia.
- Companies headquartered in Europe are investing more in their trademark teams, which are at least twice as large as their counterparts in the US and Asia.
- For both prosecution and enforcement, China is recognized as the most challenging country; however businesses also acknowledge that it is the most improved jurisdiction.
These are just a few of our findings. To view the full set of results and our analysis please use the link provided to download the report. LINK
Our reports from previous years are available below:
You might also consider taking a look at our Total Brand Care approach. It’s not just about registering and protecting trademarks. Brands and their value are positively and negatively impacted by a wide range of legal issues – Read more
Welcome to our first issue of TMT China Brief in 2018!
This edition features a total of 14 articles which capture various significant TMT developments in Greater China. These developments cover an extraordinary breadth of topics and demonstrate a strong increase in the nuance and complexity of TMT law and practice in the region.
Cybersecurity in China remains a hot topic. The Cyber Security Law is already in place but the question is how this law is going to be interpreted and implemented. In this edition, we will look at various draft/trial measures which provide further insight on key topics such as critical information infrastructure and security review of network products. We will also look at closely related topics concerning data localisation and cryptography.
We are pleased to present you this edition, which we hope will help you navigate through all these new developments.
Please click here to read the full briefing.
The Supreme Court handed down its much anticipated judgment in Cartier International AG v British Telecommunications Plc today. The Judges held unanimously that rights-holders should bear the costs of implementing website-blocking injunctions. In doing so, the Supreme Court reversed the Court of Appeal majority judgment. Although the case concerned blocking sites selling counterfeits, the judgment is not limited to online trade mark infringement. It will also apply in cases where ISPs (who are not caching or hosting) are required to block access to infringing copyright content. Continue Reading
On Saturday, 9 June 2018, with little or no fanfare, the UK’s Trade Secrets (Enforcement, etc) Regulations 2018 (SI 2018 No. 597) came into force. These Trade Secret Regulations implement into UK law the 8 June 2016 EU Directive on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure ((EU) 2016/943) (“the EU Directive”). Subject to any change of policy by the Government, the Regulations will remain in force in the UK after Brexit.
Over the coming weeks, Lime Green IP News will be focussing on key aspects of the UK’s Trade Secrets Regulations, including time limits and limitation periods, procedural protections in disputes before the courts, as well as interim and final remedies. We start by looking at the provisions at the heart of the new law.
The EU Directive is not directly effective in EU Member States (unlike an EU Regulation) and so it has to be implemented by national legislation in all 28 countries. The Directive is a minimal harmonising legislation, which means that Member States are permitted to provide for a higher level of protection for trade secrets, so long as at least the same level of protection and minimum standards for measures, procedures and remedies are ensured for trade secret holders.
Prior to 9 June, trade secrets in the UK were protected by the law of confidence derived from principles of equity and based almost entirely on case law: there was no statute defining a trade secret and no standalone legislation dealing with the procedural safeguards and remedies required under the Directive*. According to the UK Intellectual Property Office, many stakeholders responding in the short (one month) consultation period on the draft Trade Secret Regulations felt that no transposition of the Directive into a UK statute was necessary because the current system worked well, and indeed it has long been (rightly) held up as one of the gold standards in Europe. Nevertheless, after the consultation, the UK Government explained in May why it had decided (whilst taking on board many comments on the detailed drafting) to go ahead and put trade secrets protection on a statutory footing, as follows:
“… where it is clear that measures are already provided for under current legislation, case law or courts rules, there is no need for [the UK] to implement these. Where there is uncertainty as to whether the provisions of the Directive apply across all legal jurisdictions, in order to put matters beyond doubt and ensure transparency, coherence and consistency, the Government has taken the view that certain provisions should be implemented fully.“
The new UK law on Trade Secrets Continue Reading
Trade mark owners worldwide should watch out for the long-awaited first modern Trademark Law in Myanmar – very likely to come into force anytime in the coming months.
On 15 February 2018, the Upper House of the Myanmar Parliament passed the long awaited Trademark Bill, Patent Bill, Industrial Design Bill and Copyright Bill in an effort to set up a new regime of protection of intellectual property rights in Myanmar. As the next steps, the Laws will be submitted to the Lower House of the Myanmar Parliament and the Assembly of the Union of Myanmar for approval, and will be signed by the President before coming into effect upon publication in the Myanmar Official Gazette this year, probably in July 2018.
Notably, the Trademark Bill has introduced the first-to-file framework as an effort to align with the international standards. According to the Trademark Bill, the trade mark registration process in Myanmar would involve five steps, namely, filing of an application, formality examination, substantive examination, publication for opposition, and granting registration. Once registered, the mark shall be protected for a ten year period from the date of application, and this term can be renewed perpetually every 10 years for further 10-year periods.
Unfortunately trademarks which have been recorded at the Office of the Sub-Registrar of Deeds and Assurance under the current first-to-use system will not be automatically protected under the new first-to-file system. It is therefore very important that registrants of the current recorded trade marks in Myanmar re-apply for their marks as soon as possible when the new Trademark Bill comes into effect in order to be protected under the new trade mark regime.
The latest Trademark Bill is silent on whether there is a transition period during which such registered marks would remain valid for the registrants to prepare to re-apply for their marks, or whether there is any special examination procedure applicable to such re-applied marks. The latest option under discussion is that there might be a transition period for the registrants of current recorded marks to re-apply for their marks, and the re-applied marks will not be subject to substantive examination, but only to formality examination. Those marks would then proceed to be registration if no oppositions are raised. However, this option is still under consideration by the Myanmar government.
The big take away for trade mark owners worldwide is to review their portfolio in Myanmar so that they will be ready to re-file their marks and file other new marks once the new Trademark Bill comes into effect. We will monitor and report on developments here and are available for advice and guidance.
Court of Justice of the European Union, judgment of 7 June 2018, C-44/17
Glen is a Gaelic word with a wonderful lyrical sound to it and reminiscent of idyllic remote Scottish valleys with the mists from the last rain perpetually lingering over their green slopes. Also, it happens that 31 out of 116 Scottish distilleries producing “Scotch Whisky”, as protected by this geographical indication, are named after the glen in which they are located – Glenfiddich, Glenmorangie, Glenlivet, Glenfarclas, and many other fine drops. But is that enough to enjoin a distillery outside of Scotland from the use of “Glen”? The Scotch Whisky Association thinks so, and has brought infringement proceedings against the owner of the Waldhorn distillery in Southern Germany. He produces the whisky “Glen Buchenbach” – a pun derived from Berglen, the hometown of the distillery, and from the river Buchenbach which runs through its valley.
The District Court of Hamburg on considering the infringement action found that it raised several questions never yet answered in the prior case-law on geographical indications, and referred to the CJEU for clarification. Today, the CJEU gave its answers: It held, in essence, that the geographical indication “Scotch Whisky” could be infringed if consumers would directly think of “Scotch Whisky” when they see the German Whisky called “Glen Buchenbach”. In giving its answers, the CJEU also raised a new question – which it will now be up to the national courts to grapple with.
The challenged use of “Glen Buchenbach”
The defendant produces the whisky “Glen Buchenbach” in a distillery in Berglen in the German Buchenbach valley. The label of the bottles also includes detailed information about the local German origin of the whisky: “Waldhornbrennerei” [Waldhorn distillery], “Swabian Single Malt Whisky”, “Deutsches Erzeugnis” [German product], as well as “hergestellt in Berglen” [produced in Berglen]. The plaintiff, the Scotch Whisky Association, filed an action for infringement of the registered geographical indication “Scotch Whisky” before the District Court of Hamburg. It argued that the Gaelic term “glen”, used in the names of numerous whiskys of Scottish origin, constitutes an unlawful indirect use and evocation of the geographical indication “Scotch Whisky”. Consumers would wrongly assume “Glen Buchenbach” to be produced in Scotland, despite the additional information on the bottles that clearly identifies the whisky as a product of German origin.
The District Court of Hamburg noted that the case raised several questions about the interpretation of the EU Regulation in question (“On the protection of geographical indications of Spirit Drinks”, No. 110/2008):
- Does “indirect use” or an “evocation” of a registered geographical indication require that it is used in identical or phonetically / visually similar form? Or is it sufficient that the disputed term evokes some kind of association with the geographical indication or the geographical area?
- If the latter is sufficient, does the national court have to take the context into account in which the disputed term is used? Or can the context not counteract an unlawful indirect use, evocation or other false or misleading indication, even if it indicates the true origin of the product?
The Decision of the CJEU Continue Reading
Last month, Nikkei interviewed Senior Counsel Theodore (Ted) Essex on the importance of The United States International Trade Commission (“ITC”) for Japanese companies. Ted first provided an overview of the function of this quasi-judicial federal agency which decides, based on patentees’ applications, whether to give an injunction on infringing products. He commented that the ITC has started putting an importance on whether “the patentee actually manufactures and sells products in the U.S.” when they make a decision. Ted believes that this trend is rooted in an increasing understanding that in order to protect U.S. industries, patent trolls that acquire many patents and sues others, have to be stopped.
Commenting on specific links to Japan, Ted outlined some ITC proceedings where Japanese industrial companies on the world stage have applied for an injunction against each other. He believes that foreign companies are likely to be able to continue using ITC proceedings as they would be regarded as contributing to the U.S. economy as long as they manufacture and sell products in the U.S.
For updates on the more ITC cases and developments please click here to sign up for our Hogan Lovells ITC Section 337 Quarterly Highlights newsletter.
In May, SIDN, the Registry responsible for the country code Top Level Domain (ccTLD) extension .NL (Netherlands), published an article on the Ethical Hacker Rickey Gevers and the efforts of the Netherlands to make the Dutch public more aware of the risks of cyber criminality online.
The ‘Hackman’ on-line campaign (in Dutch), got underway earlier in May when Ethical Hacker Gevers accepted the challenge of hacking actress and presenter Lieke van Lexmond’s smartphone. He also gave advice on staying safe online with the aim of increasing awareness of digital security. As part of the campaign, a series of videos were posted online showing how Rickey Gevers goes about trying to hack into Lieke van Lexmond’s virtual world. The website also offers a quiz via which people can test their knowledge of online security. The aim of the exercise was to get the public thinking more about the potential risks of their everyday Internet behaviour.
With reference to the campaign, Ricky Gevers has stated:
“From my day job as a cyber-security expert, it’s clear to me that the Dutch public isn’t as aware of digital identity and security as they really should be. Many Dutch people give little or no thought to on-line security. That’s why I took on the role of Hackman. I want to get across the message that all it usually takes is a few simple changes to make yourself much safer on line.”
Gevers had an interesting start to his career, first coming to the attention of the FBI for hacking secure university and embassy networks before moving over to the other side and becoming a cyber-security expert. His role is now on the right side of the law searching out security weaknesses and hacking into corporate systems in order to discover security flaws.
The Dutch government is also very much present in the fight against cybercrime. The role of the government in combatting cybercrime dates back to 2012 when they opened The National Cyber Security Centre (NCSC), which works in collaboration with the business community, government bodies and academics in the Netherlands. Its mission is to continuously monitor suspect sources on the internet and alert public authorities and organisations if a threat is identified. They advise on how companies can protect themselves against such online threats and also monitor developments in new technologies to ensure that security systems are up to date.
A new bill currently passing through parliament will, if introduced, give public authorities even greater powers to fight cybercrime. The police and prosecutors will have the power to arrest persons suspected of selling stolen digital data, investigate or hack into suspects’ computers remotely (for instance by installing software to detect serious forms of cybercrime) and intercept data or make it inaccessible (for instance by blocking child pornography or intercepting email messages containing information about offences).
As the majority of us have some kind of activity online, be it via social networking or simply purchasing items from a retail website, the risk is ever present, so awareness is crucial. There are of course ways that each of us can minimise this risk on an individual level, starting by avoiding the use of public networks, using more complex passwords and being careful about which apps to install.
This post is selected from our Anchovy News publication: Anchovy® is our comprehensive and centralised online brand protection service for global domain name strategy, including new gTLDs together with portfolio management and global enforcement using a unique and exclusive online platform developed in-house. For more information please contact us at email@example.com