Hear about IP Rights in China from the Horse's Mouth

Author: Unknown US serviceman or woman
Licence  Dedicated to the public courtesy of US Government

Jane Lambert

There is an awful lot of rubbish spoken about IP rights in China so here are some facts:-

• In 2015 some 2.9 million patents were applied for throughout the world (an increase of 8% over the 2.7 million applications the previous year). Of those 2.9 million, China accounted for 1.1 million (an increase of 18.7% over the 928,177 sought the previous year). The USA was number two in both 2014 and 2015 with 587,802 and 589,410 respectively and Japan came third with 325,989 in 2014 and 318,721 in 2015.  How many patents did we seek during those years?  A mere 23,040 in 2014. I have been unable to find figures for Britsh patent applications in 2015 (sources page 7 World Intellectual Property Indicators 2016 published by the WIPO and Building the Evidence Base on the Performance of the UK Patent System published by the IPO).
• According to the WIPO China is also number 1 on trade mark, industrial design and utility model applications (ibid).
• According to Gabriela Kennedy, a partner of the international law firm Mayer Brown JSM, China enforces the intellectual property rights that have been granted by SIPO (its national intellectual property office).  She writes in the current issue of her firm's IP and TMT Quarterly Review that 

"As of 2016, 224 Intermediate People’s Courts and 167 Basic People’s Courts have been designated as having jurisdiction over the hearing of IP-related matters. Between 1985 to 2016, the People’s Courts accepted 792,851 civil IP cases and concluded 766,101 cases. Between 1998 to 2016, the People’s Courts accepted 77,116 criminal IP cases and concluded 76,174 cases."

So much for the urban myth that China does not invent or create anything but instead copies other countries' technology and other intellectual assets.

China is already an important trading partner. Under its One Belt One Road programme (which I mentioned briefly in my article on the Shanghai Cooperation Organization in NIPC Brexit), it plans to invest trillions of pounds into new roads, railways, ports and other infrastructure projects between now and 2049. Some of that money could be invested in new technologies such as a 4,000 km/h train hovering above the tracks (see Steve Hanley China Proposes 4000 km/h Flying Train As Part Of Its One Belt, One Road Plan 11 Sept 2017 CleanTechnica).  As magnetic levitation and graphene were invented in the UK, there is no reason why businesses in this country could not get a share of the research work to develop, manufacture and install that train) as well as supply a range of other goods and services.

But British businesses will only be able to do that if their inventions, designs and brands are protected adequately in China. As few British business people and their professional advisors speak Mandarin that is not easy to do.  Happily, we do have a senior diplomat in our embassy in Beijing who does speak that language and is well connected with officials and advisors in the Peoples' Republic who can help.

That diplomat is Mr Tom Duke. He will be in Leeds between 09:30 and 12:00 and Barnsley between 14:30 and 16:30 to address business owners, creatives, designers. entrepreneurs, innovators and investors on how to protect and make money from their brands, designs, technology and works of art and literature in China.  His meeting at Leeds will take place at Northern Ballet at Quarry Hill, Leeds LS2 7PA and the meeting in Barnsley at Barnsley Business and Innovation Centre, Innovation Way, Barnsley, S75 1JL You can find full details in Meet our IP Attaché to China 21 July 2017.

There are still one or two spaces in Leeds and a few more in Barnsley but you will have to move fast.  Call 020 7404 5252 or email my clerk Steve Marshall without delay if you want to book your place. We look forward to seeing you there.

Supporting Enterprise, Innovation and Creativity in South Yorkshire

South Yorkshire

Author Nifanion
Licence Creative Common Attribution-Share Alike 3.0 Unported

Jane Lambert

You only have to look at the map to see the importance of the metropolitan county of South Yorkshire. Close to the Leeds-Bradford and Greater Manchester conurbations, not far from the North Sea and Atlantic ports with its own growing international airport, good rail and road links to London, Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Liverpool and Newcastle, one of the world's great research universities as well as many other fine universities, schools and colleges, excellent theatres and concert halls and famous sporting venues, there is no better place to found or expand a business than Barnsley, Doncaster, Rotherham or Sheffield.

To support those businesses Barnsley Business Innovation Centre holds regular intellectual property clinics with patent counsel. "What's so special about them?" I hear you say. "There are regular patent clinics with patent attorneys at Leeds and Sheffield." True! And they are excellent. But the sessions at Barnsley are with counsel. It is counsel who advise attorneys and solicitors on difficult points of law, draft complex legal instruments and, where necessary, represent them before judges and hearing officers in the IPO. It is from their ranks that the judges of the Patents Court, Chancery Division and Intellectual Property Enterprise Court are drawn (see my article IP Services from Barristers 6 April 2013 revised 16 May 2017 NIPC News).

What you get from a barrister is independence because they don't prosecute patent, trade mark or design applications and years of experience of the things that can go wrong since they are only consulted when a case is out of the ordinary and that is why they are relatively expensive. A 30-minute conference in London would cost many hundreds of pounds. What Barnsley BIC offers every month is a similar 30-minute slot in Barnsley with specialist counsel for nothing.

On the second Tuesday of every month, I am to be found at Barnsley between 16:00 and 18:00 and I shall see anybody who books in advance. The sort of questions I get are

• "I hope to set up a business in Barnsley in the next few weeks but I am not sure of the best way of protecting my brand, product or service?"
• "How can I find out whether this invention is patentable and if so how do I apply for a patent?"
• "I have just received this nasty letter from Sioux, Grabbit & Run. What should I do about it?" or
• "A company in China has offered to manufacture my product but how do I protect my business there?."

If you have any question on IP I shall be at the BIC on Tuesday 12 Sept, 10 Oct, 14 Nov or 12 Dec 2017 between 16:00 and 18:00. If you want to save yourself several hundred pounds in legal fees, you need only fill in this form or call Steve Marshall on 020 7404 5252 to reserve your slot.

As the last question "A company in China has offered to manufacture my product but how do I protect my business there?" arises frequently, we have been lucky enough to persuade Mr Tom Duke, our IP attaché in China to talk to our local entrepreneurs, inventors, creatives and their investors. Tom will give you a great start to protecting and licensing your brands, designs, technology and creative works in China so that you can invest in, export to, import from or otherwise make loads and loads of money in that increasingly important market. He will be at Barnsley BIC on 19 Sept 2017 at 14:30. 

Now if that time happens to clash with a round of golf, dental appointment or anything else that you can do another day or get a colleague to cover, ponder this. You can do all those things some other time but if you want Tom's contacts and information you will have to go to China for it and that's a lot further than Wilthorpe. So call Steve on 020 7404 5252 to book your place. You will find further information in Meet our IP Attaché 21 July 2017. You could save or earn yourself a whole heap of renminbi if you turn up.

If you want to discuss this article or IP in China, England or anywhere else, call me on 020 7404 5252 during office hours or send me a message through my contact form.

Trade Missions from Yorkshire to China, Germany, the Netherlands and the USA

Jane Lambert

Yesterday I received an email from DIT North West stating:

"Working closely with our colleagues in both Yorkshire & Humber and the North East, we have created a calendar of 16 trade missions, covering various markets, trade shows and exhibitions to support your business to win sales overseas."

The email contained details of trade missions to California, Amsterdam, Cologne, Dusseldorf, China and Boston between 24 Sept and 28 Nov 2017 for the healthcare, food and drink and other industries.

Should any of my readers in Yorkshire or the Humber wish to learn more about those missions, I have written a short article on them entitled Powerhouse Trade Missions in IP Northwest.  Readers will find in that article a link to the Eventbrite page which contains details of each of the missions with links to the each of the mission Eventbrite pages.

I wish anyone whom goes on any of those missions the very best of luck and would urge them to have regard for their trade secrets and designs. They may find the following extract useful:

"If you plan to go on any of those trade missions, be careful not to disclose anything that you might wish to patent, register as a design or otherwise keep under wraps except in confidence (see Duty of Confidence). However, there is a year's grace period for design registration in Britain and the rest of the EU (see Registered Designs and Registered Community Designs) and don't forget the international exhibition exception provided by s.2 (4) (c) of the Patents Act 1977. Make sure that any non-disclosure or confidentiality agreement is to be construed and enforced in accordance with English law. We are harmonizing our trade secret law across the EU with the Trade Secrets Directive which will come into effect o 9 June 2018 just before Britain flounces out of the EU but we are not there yet (see my article on The Trade Secrets Directive 7 July 2016 NIPC Law).

You must also be aware of the ease with which it is possible for IPR owners to get without notice injunctions just before international exhibitions in Germany and some other countries and serve the orders on the first day (see the penultimate paragraph of Pre-Action Correspondence: What to do if you get a Stroppy Letter ....... or worse 4 Aug 2017 NIPC Law). That nearly happened to one of my clients not long ago. The antedate in Germany is to get a German lawyer to file a Schutzschrift ("protective brief") with the court in which the application is likely to be made setting our reasons why such an order should not be granted. You should also take a look at the arbitration schemes that exist in Italy and Switzerland (see my article Resolving IP Disputes at Trade Fairs 1 June 2017)."

Should anybody wish to discuss any of these matters, call me on 020 7404 5252 during office hours or send me a message on my contact form.


Further Reading

Northern Powerhouse Index

Meet our IP Attaché to China

Author Ssolbergj
Creative Commons Attribution-Share Alike 4.0 International Licence
Source Wikipedia

Jane Lambert

Mr Tom Duke is our IP Attaché to China. His job is to build relations with the Chinese government to understand and actively engage with IP policy makers in that country.  He is part of a network of British IP attachés in Brazil, India and South East Asia which has significantly increased the level of support available for UK businesses operating in those markets. Based in the British Embassy in Beijing he supports over 200 companies each year on IP strategies and on dealing with problems such as infringement whenever they arise.

Every year Mr Duke and his colleagues hold a series of business outreach events across the UK called the “China IP Roadshow” with the aim of raising awareness of protecting IP in China amongst (potential) UK exporters and companies involved in other types of business/innovation collaborations with Chinese partners. This year they plan to visit Yorkshire as well as Scotland, Liverpool, Manchester and London.

Mr Duke will be in Yorkshire on 19 Sept 2017 and plans to speak in Leeds morning and Barnsley in the afternoon.  His talk in Leeds will take place in the boardroom of Northern Ballet and the provisional programme is as follows:

09:30 -  10:00	Registration and networking
10:00 - 10:30	Tom Duke, British Embassy Beijing/UK Intellectual Property Office “Succeeding in China – How to mitigate IP risk”
10:30 - 11:30	Other presentations, questions and answer and discussions
11:30 - 12:00	One to one meetings (please request at time of registration)

The Barnsley meeting will take place at the Barnsley Business and Innovation Centre and will follow a similar format:

14:30 -  15:00	Registration and networking
15:00 - 15:30	Tom Duke, British Embassy Beijing/UK Intellectual Property Office “Succeeding in China – How to mitigate IP risk”
15:30 - 16:00	Questions and answer and discussions
16:00 - 16: 30	One to one meetings (please request at time of registration)

According to the WIPO China has a population of 1,371 million and a GDP of US $18,374.71 which is even bigger than that of the USA in terms of purchasing power parity, In 2015 there were nearly a million applications to the SIPO for patents for Chinese inventions. That is more than the applications made to their national patent office by the inventors of any other country. China is an important innovator and shares our national interest in ensuring proper protection for brands, designs, inventions and creative works around the world.

Mr Duke will tell you all about registration of patents, designs and trade marks in China and Hong Kong, licensing and joint ventures and enforcement through the courts and tribunals. As the new Business and Property Courts will launch in Leeds and other major cities I will tell you all about your contractual and IP rights, remedies and liabilities in respect of your dealings with Chinese partners here.

Space is limited at both venues and demand is likely to be heavy. If you want to be sure of your place, call Steve on +44 (0)20 7404 5252 and ask to reserve a place at either venue or send me a message through my contact form.

How far (if at all) is it possible to protect Innovation in Financial Technology?

Head office of the Yorkshire Bank

Photo Wikipedia

Although only three British companies were listed in the 2013 FinTech 100 rankings compared to 10 from India and many more from the USA our government aspires to make this country the world leader in financial technology (see "Plan to make Britain global centre of financial innovation set out by government" 6 Aug 2014). With over 42,000 people employed in the financial services in 2012 Leeds hopes to develop a local financial technology industry. As part of the International Economic Conference that took place shortly before the start of the Tour de France, Pinsent Masons hosted a half day seminar called "At the Forefront of FinTech" to discuss the opportunities for fintech businesses in the City Region. On 16 July 2014 the dotForge accelerator announced plans to set up the first fintech accelerator outside London in Leeds ("New “fintech” accelerator for Leeds" 16 July 2014 Yorkshire Post).

In Fintech The UK’s unique environment for growth UK Trade and Investment listed several advantages for the UK:

"– the presence of a large and technologically sophisticated customer base
– London’s position as a world-leading centre for financial services
– good availability of business capital
– a supportive regulatory approach
– excellent financial services infrastructure, and
– London’s position as a global trading hub."

All that is very true but the UK does suffer one important disadvantage in relation to its global competitors which is that it is very difficult to protect investment in the development of financial technology in this country.

The problem is that s.1 (2) of the Patents Act 1977 declares that

"the following (among other things) are not inventions for the purposes of this Act, that is to say, anything which consists of -
(a) a discovery, scientific theory or mathematical method;
(b) a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever;
(c) a scheme, rule or method for performing a mental act, playing a game or doing business, or a program for a computer;
(d) the presentation of information......"

Much of the technology used in the financial services industry are computer programs. methods of doing business or the presentation of information. These exceptions are themselves subject to the following proviso:

"but the foregoing provision shall prevent anything from being treated as an invention for the purposes of this Act only to the extent that a patent or application for a patent relates to that thing as such."

Those words - particularly the last two - enable a skilful patent attorney occasionally to draft a specification for a software implemented invention that can be patented but that is not possible for all such inventions. Other countries that are party to the European Patent Convention which include all our EU competitors have similar statutory exclusions as their laws like ours have to correspond to art 52 (2) and (3) of the Convention; but there are no similar statutory exclusions in American, Chinese, Indian, Japanese or Korean patent legislation.

In his  speech at the launch of the new trade body for FinTech, 'Innovate Finance' 6 Aug 2014 the Chancellor of the Exchequer said:

"We’re introducing the right tax regime for this new industry.

• With major new incentives to encourage investment in start-ups

• Patent Box, so that if you invent in the UK you only pay 10% on those profits

• and now we will allow peer-to-peer lending in ISAs."

The exclusion of many software implemented inventions from patent protection renders nugatory at least one of the incentives to innovation that the Chancellor of the Exchequer announced in his. Without a patent nobody can take advantage of the patent box.

In Digital Opportunity A review of Intellectual Property and Growth Prof, Hargreaves advised the government to

"work to ensure patents are not extended into sectors, such as non-technical computer programs and business methods, which they do not currently cover, without clear evidence of benefit."

 HMG accepted that recommendation without demur in The Government Response to the Hargreaves  Review of Intellectual Property and Growth:

"The Government will resist extensions of patents into sectors which are currently excluded unless there is clear evidence of a benefit to innovation and growth from such extension."

There was no debate on the legal protection of financial technology during the passage of the Intellectual Property Bill through Parliament not even any detailed discussion of the topic during the extensive consultation on the implementation of Hargreaves' recommendations.

If they can't protect financial technology with patents then the new businesses that the Chancellor hopes to encourage including any that may be set up in Leeds will have to rely on other intellectual property rights. Traditionally software houses have relied on copyright and trade secrecy to protect their technology but that does not work terribly well with free open source software and decisions such as the judgment of the Court of Justice of the European Union in C-406/10 SAS Institute Inc v World Programming Ltd  [2012] WLR(D) 131, [2012] EUECJ C-406/10, [2013] BUS LR 941 do not help. That leaves trade marks that protect a business's brand but not its technology and the advantage of being first in the field.

In the USA there is extensive discussion on intellectual property protection of financial technology (see for example the slides for Wilmer Hale's webinar What Should Financial Institutions and FinTech Companies Be Doing?  6 March 2013 but I struggle to find similar discussion here. If I were a business angel or manager of a private equity fund I am not sure that I would be particularly happy with that.

Yorkshire's Links with China

I have just returned from the Chinese New Year Show at Sheffield City Hall and was bowled over. It was an excellent show with acrobats, dancers, dragons, face changers, jugglers, pandas and even acrobats on roller skates.  The night before I attended the Liverpool Chinese Business Network's VIP Dinner in Liverpool which also had a show (see Jane Lambert "Welcome to the Year of the Dragon" IP North West 23 Jan 2012). That was very good but the Sheffield spectacular was even better. Everyone knows that there have been Chinese communities in Liverpool and Manchester for generations. What is less well known is that there is also a Chinese community in Yorkshire. Its links with China are at least as strong as the North West's.

One of the most important connections between China and Yorkshire is the Confucius Institute of Sheffield University. This is an international collaboration between the University of Sheffield, the Office of Chinese Language Council International (commonly known as Hanban), Beijing Language and Culture University and Nanjing University. Its mission includes a number of objectives the first of which is to be "a focal point for China-related activities in Sheffield and the broader region of the Midlands and Northern England."

Another connection will be the "Visions of China" theme park which is to be built in Rotherham. This £100 million project will include ornamental lakes and gardens; retail outlets; a Shaolin temple and cultural centre, a theatre, restaurants, spa, pavilions and an hotel. The project will be undertaken by the Chinese government.

In "Happy New Year - this could be the year the recovery starts"  I argued that China and other rapidly growing emerging economises would lift us from recession starting this year.   The "Visions of China" investment is one sign that that is happening.  Other signs include China Telecom's MVNO and Huawei's continuing  investment in the UK.

As the State Intellectual Property Office of China is now the second largest recipient of patent applications according to the WIPO, demand for Chinese technology is likely to increase from the UK. Should you require advice or assistance in drafting licences and technology transfer agreements, do not hesitate to call me on 0113 320 3232.