Thursday 29 May 2014

New customs agreement between the EU and China: What does it mean for trademark owners?

Silk Market Beijing
(by gruntzooki via Flickr)
China and the EU have signed a landmark mutual recognition agreement on customs cooperation. Its main goal is making the customs procedures easier, cheaper and faster for trusted traders. Two other initiatives which complement this agreement have also been signed, namely a new Strategic Framework for Customs Cooperation and a new EU-China Action Plan on Intellectual Property Rights.

The “trusted traders”, also known as “Authorized Economic Operators”, have been present under EU customs regulations since 2008 and enjoy simplified customs procedures if they manage to prove that they are safe, reliable and compliant with security standards. In other words, the trusted traders go through fewer and quicker customs checks when entering or exiting the European Economic Area (EEA).

China is not the first country to sign such an agreement with the EU; there are mutual recognition agreements already signed with countries such as the US (2012) and Japan (2011), but the addition of China makes the EU certified trader system the most widely accepted in the world since there are currently around 15,000 companies listed as safe traders (for more information see the European Commission's press release here).

There is a more important point to be considered though. China has a reputation of a country where a lot of infringements of IPRs are being committed every day. However, on 1st May 2014 a new Trademark Law has come into force (for details on the amendments, see our previous blog post here) which is supposed to strengthen the protection of trademark owners against infringements and bad faith applications. We are still to see how exactly it will be implemented in practice, but the combination between the new Trademark Law and the recently signed customs agreement, definitely means good news for trademark owners!

Our experience in China has proven that European trademark owners sometimes have more problems with trademark squatters rather than infringers. The reason behind this is simple – the widely established practice of European trademark owners to manufacture their goods in China without registering their trademarks there and later sell them on the European market. What happens then? A Chinese company simply goes to the SAIC and registers the European trademark without any problem since the Chinese trademark system is a first-to-file one. Then, they also register the trademark with the Chinese customs (GAC) and when the European owner tries to send his/her next shipping to Europe, the goods are stopped at customs for infringing a Chinese registered trademark. From here onwards, there are basically two options and neither of them is good – pay a subordinate amount of money to buy our own trademark or go to court / TRAB.

Maybe the most common route chosen by European trademark owners is to try to cancel the said registration on grounds of bad faith or non-use after the first three years from registration. In this case, the biggest problem faced by the rightful owner is to prove the use or at least some influence of the trademark on the Chinese market. However, this is quite difficult if not impossible, because manufacture only for export is not usually considered as actual use of the trademark (there is no precedent in Chinese judicial system, so Chinese courts are not obliged to follow previous decisions even if there are such) and only extremely famous trademarks have been recognized by the courts when they had not been used on the Chinese market.

With the strengthening of the good faith requirement in trademark registration and use by the new Chinese Trademark Law and the mutual recognition agreement with the EU, the cases  mentioned above should decrease. Not only because of the protections offered by the Law, but also because the enhanced customs cooperation will ease the fight against squatters by recognizing the European safe traders in China and maybe motivate EU companies to register their trademarks in the country in order to be fully protected. This way, Chinese customs will be able to dedicate much more resources to the high-risk traders and fight against infringements more efficiently.

While the Chinese IP-related legislation and the actions of the authorities is improving more and more every time, we should be conscious of the dangers that still exist and align our IP strategy in accordance to them. For the common person living in China, the efforts of the Chinese authorities are almost invisible, which once again shows the scale of the infringements and the enormous amount of resources and time which have to be put into this fight. If a trademark owner is manufacturing, using or planning to use his/her trademark on the Chinese market, his rights should better be registered before starting any commercial or other activity in China. In case the owner has already entered the Chinese market, it is highly advisable to register the trademarks as soon as possible.   

Author: Geri Dimitrova,

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Wednesday 14 May 2014

The CJEU endorses the "right to be forgotten" in the EU

Paul David
(via Flickr)

On 13 May 2014, the Court of Justice of the European Union (CJEU) handed down its judgment in case no. C-131/12 between Google and the Spanish Data Protection Agency (AEPD).

On 5 March 2010, Mr. Costeja González filed a complaint with the AEPD against the publisher Vanguardia Ediciones S.L., Google Spain, S.L. and Google Inc. In the complaint he requested that La Vanguardia be required to remove or alter pages so that his personal data no longer appeared, or to use certain tools made available by search engines in order to protect the data. Mr. Costeja González also requested that Google Spain or Google Inc. be required to remove or conceal the personal data relating to him so that they ceased to be included in the search results and no longer appeared in the links to La Vanguardia. All these requests were based on the fact that the embargo proceedings to which Mr. Costeja González had been subjected at the time had been fully resolved for a number of years and were now entirely irrelevant.

On 30 July 2010 the AEPD dismissed the complaint against the publisher and upheld the complaint against Google Spain, S.L. and Google Inc., requiring them to withdraw the data from their index and prevent future access thereto. Google Spain, S.L. and Google Inc. proceeded to lodge appeals against the Audiencia Nacional (Spain’s High Court) requesting that the AEPD’s judgment be vacated.

Under these circumstances, the Audiencia Nacional suspended the proceedings and referred a series of preliminary questions to the CJEU:

  • The territorial application of EC Directive 95/46;
  • The definition of the scope of responsibility of search engines as providers of content in relation to EC Directive 95/46;
  • And the scope of the right of erasure and the right to object in relation to the right to be forgotten.

First of all, the CJEU classified the activity of a search engine which consists of “finding information published or placed on the internet by third parties, indexing it automatically, storing it temporarily and, finally, making it available to internet users according to a particular order of preference” as “processing of personal data”, thus converting the operator of the search engine into the controller of that processing of personal data, and the guarantor that the requirements of EC Directive 95/46, as well as the full and effective protection of the rights of the individuals in question, be fulfilled.

Turning to the territorial application, the CJEU rejected Google’s argument that Google Search did not carry out the processing of personal data as part of its activities in Spain. The CJEU ruled that Google Spain, S.L. must be regarded as an establishment within the meaning of Directive, since it is the subsidiary of Google Inc. in Spain. When a company with a seat in a third state has an establishment in a Member State and carries out the processing of personal data for the purposes of the service of a search engine in the Member State establishment, the Directive considers that this processing is carried out ‘in the context of the activities’ of the establishment if the intention is to promote and sell its goods and services in that Member State.

With regard to the extent of the responsibility of search engines as content providers in relation to the Directive, the CJEU stated that the controller of a search engine is obliged to remove from the list of results displayed following a search made on the basis of a person’s name links to web pages published by third parties and containing information relating to that person.  The CJEU added that this obligation also exists in a case where that name or information is not erased beforehand or simultaneously from those web pages, and even when the publication is lawful. According to the CJEU, a structured overview of the information relating to the individual in question may potentially affect his private life.

The CJEU in turn identified the need to consider the user’s right to access information on the one hand, and the affected individual’s right to protect his personal data on the other. This balance depends on the nature of the information in question and the role played by the affected individual in public life.

Finally, the CJEU introduced the possibility that after a certain time the affected individual may exercise his right to be forgotten and request that the list of results obtained be removed. If it is found that the list of results is at this point in time incompatible with the Directive, the information and the links displayed therein must be removed. These results are to be deemed incompatible when they appear to be inadequate, irrelevant or no longer relevant, or excessive in relation to the purposes for which they were processed and in the light of the time that has elapsed.

This judgment affects more than 220 appeals lodged by Google against decisions issued by the AEPD that are currently pending before the Spanish Audiencia Nacional.

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