N. 42, April - June 2009 
IP & RTD: Articles 

Design protection and China
José J. Izquierdo Peris1
Head of Special Cooperation Programmes Sector,
Institutional Affairs and External Relations Department
OHIM
 
On 5th June 2008, China’s State Council adopted the country’s National IP Strategy. The idea is that, by 2020, China will become an innovative country by improving its capacity to create, utilise, protect and administer intellectual property. This means transitioning from an economic model based on the “made in China” label to a “designed in China” model, similar to the transition experienced by Japan or South Korea in the 80s and 90s. Many observers outside China believe that this transition is not only feasible but is actually happening: the number of design registrations obtained from the State IP Office (SIPO) illustrates this change.

China has a design protection system based on the registration of rights. The system is growing fast: between April 1985 and March 2009, 1,582,462 designs were filed. Of those, 93.4% were filed by Chinese undertakings.

When compared with OHIM’s Registered Community Design (RCD) system, the magnitude of the Chinese design system becomes even more manifest: in 2008, 312,904 designs were filed for protection at SIPO, against 77,067 Community designs received by OHIM. Chinese filers (including those from Hong Kong and Taiwan) make up 2.85% of the total number of RCDs filed at OHIM.

It seems quite obvious that EU companies, and particularly SMEs that invest time and resources in protecting their designs in Europe, should also spend some time and resources doing the same in China. Design litigation in China is also increasing, and the news is not always “that bad”. Two examples:

In January 2009, German bus maker Neoplan Bus won damages of Rmb 21.16 million (around 2 million €) against two Chinese companies for copying its Starliner bus design. Neoplan’s Starliner design was registered before SIPO in September 2004 and was manufactured and sold in China. The Beijing Number 1 Intermediate Court found that the difference between the accused bus design and Neoplan's design was too slight to constitute a notable visual effect on the entire design.

In 2006, Nokia sued two Chinese companies accused of copying the designs of its Nokia 7260 mobile phone. The parties reached a settlement agreement.

Unfortunately, success stories are relatively rare. In December 2008, Fiat lost an appeal alleging that the Chinese car manufacturer Great Wall's GWPeri compact car was an infringement of its design right patent. In 2003, Philips faced difficulties in enforcing its design rights on “shavers”. The Chinese defendants requested invalidation of Philips’ registered designs at SIPO, and the designs were invalidated in June 2003 and June 2004 by SIPO’s Patent Re-examination Board (PRB). After successive appeals, in November 2005, Beijing’s High People’s Court endorsed the decisions and found the defendants non-infringers.

On 27th December 2008, the Chinese National People's Congress passed an amendment to the Patent Law (designs being governed under this legislation). The law will come into effect on 1st October 2009, once the implementing regulations are adopted. This will be the third time Chinese Patent Law has been amended. While most of the changes have to do with patents (the intention of Chinese leaders is to encourage more investment to improve invention quality), some changes were made to the legal system of design protection. For example, “offer for sale” will constitute an infringing act which can be prevented by design owners. Absolute novelty will constitute the validity standard for design registration (e.g. designs disclosed in the EU will need to be taken into consideration when determining the validity of Chinese registrations). Bi-dimensional designs will no longer be protectable as designs (a change which makes the EU system and the Chinese system different as regards the scope of protection for graphic design items such as logos, Web site layout, etc.). Finally, similar designs of a product will be able to be filed in one “multiple application” (like under the RCD system).

SIPO’s Commissionner Tian Lipu told Managing IP in February 2009 that the aim of these modifications to the design system is to raise the quality of design rights: "The amendment requires search reports for design patents. Applicants need to prove that their patent is reliable before they can enforce it. We have also developed an online search database with pictures for design patents. And patent agents have been advised not to accept low-quality applications and will provide relevant consultation services."

In this context, what can SMEs doing business in China expect as regards their design rights? To find out, they should look into means of protecting themselves. In this regard, the European Commission’s “China IPR SME Helpdesk”, which provides free information, first-line advice and training support to European SMEs to protect and enforce their IPR in China2, is a good starting point.

On the other hand, the EU contributes different actions to improve the performance of Chinese authorities. Two examples: 1) the multi-annual EU-China project “IPR23”, which aims to increase the effectiveness of IPR enforcement by providing capacity-building solutions to institutions like SIPO; 2) the EU delegation has two IP officers based in Beijing. One is fully dedicated to trade marks and designs (an OHIM staff member) and is there to help SMEs, whether or not they are holders of Community trade marks and designs4. Design owners, you will not walk alone…





1. The opinions expressed in this paper are exclusively those of the author and may not coincide with those of OHIM.(«)


2. Visit its Web site at http://www.china-iprhelpdesk.eu/ («)


3. http://www.ipr2.org/ («)


4. Contact OHIM (http://oami.europa.eu/ows/rw/pages/OHIM/contact.en.do ) or the EU delegation (http://www.eu-in-china.com/ )(«)