Mickey Mouse Heads Overseas
After it was announced that Shanghai will soon have its own Disneyland theme park, and just when you thought Mickey Mouse could not get any bigger, he announces that Disney is planning to open 25 to 40 stores across major cities in China. While some North American brands are hesitant to do business in China because of counterfeiting and intellectual property rights issues, Mickey Mouse is not afraid.
Below is a brief comparison of certain intellectual property laws in China and Canada:
Trademarks
China operates on a first-to-file system, which makes trademarks available to third parties with no evidence of past use or ownership.
Canada operates in a similar fashion, however, the Canadian Intellectual Property Office (CIPO) requires evidence of prior use or ownership, and allows third parties to contest such registrations. This system is more akin to a first-to-use system (for clarification, see Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC).
A key difference between Chinese and Canadian trademark law is enforcement levels. To avoid potential enforcement issues, foreign businesses should register their trademarks with China’s Trademark Office in Beijing and companies should register Chinese versions of their trademarks before entering the market. Apple learned this lesson the hard way. For more on that, click here.
Copyright
In China, registration is not required for copyright protection. Although copyright protection is offered in China to individuals whose countries are members of copyright international conventions or bilateral agreements, registration should be completed to combat potential enforcement issues.
China subscribes to the basic standards of copyright regulation, as signatories to the Berne Convention and the Trade-Related Aspects of Intellectual Property Rights agreement (TRIPS). For example, Canada's fair use exception is not mirrored in Chinese copyright law, which only has explicit exceptions for private study, comment, or news media. Accordingly, it is unlikely that a court would interpret these exceptions to include expressions like political speech.
Over the past few decades, China has strived to improve its intellectual property laws, and is gradually moving towards more comprehensive protective measures. It is a signatory to the World Intellectual Property Organization (WIPO), the Paris Convention, and TRIPS, in addition to other international intellectual property treaties. China has also established judicial mechanisms to settle intellectual property disputes, with an intellectual property rights trial division that has jurisdiction over all intellectual property matters not involving criminal or administrative law. Additionally, the Supreme People’s Court of China has recently established the Intellectual Property Rights Office which provides guidance for intellectual property proceedings.
In addition to these judicial measures, China has implemented administrative mechanisms to protect and enforce intellectual property rights. The country’s Trademark Office oversees the registration and administrative controls of trademarks, and also handles infringement issues. Similarly, the China National Copyright Administration investigates copyright infringement cases. On the enforcement side, the Chinese Customs Agency investigates goods suspected of violating Chinese intellectual property laws, and can detain such infringing products. Despite these improvements, countries including Canada and the U.S. remain concerned about China’s ability to enforce IP rights. These concerns often revolve around copyright-protected products such as books, DVDs and software.
Disney is no stranger to the Chinese judicial system, having won a copyright infringement case in 1995. In Walt Disney Co. v. Beijing Youngsters and Children Publishing House, Disney pursued an action for the illegal production and distribution of children’s books featuring some well-known and loved Disney characters. While the court awarded Disney a lower sum than it had claimed, the win was seen as a promising sign in the mid-90’s that enforcement mechanisms are available, and continuing to evolve.
*Special thanks to Monique Ashamalla, Student-at-Law, for her intellectual property law research assistance
