On October 15, the national authority in China responsible for administrative enforcement of trademarks, the State Administration for Industry and Commerce (SAIC), issued a notice announcing an unusual year-long campaign to provide special trademark protection to the Walt Disney Company.
The SAIC notice states that the campaign has been initiated to protect the opening and future development of the Shanghai Disney Resort, to protect the interests of Chinese consumers and to “uphold China’s international image for safeguarding intellectual property rights”.
The campaign is being launched as Disney enters into the homestretch towards the planned opening in spring 2016 of its $5.5 billion theme park. Disney is a minority investor in the resort, with 57% of the park owned by a group of companies controlled by the city government of Shanghai.
The contents of the campaign are not entirely unprecedented, as similar initiatives are pursued from time to time for special events, such as the Olympic Games or where public health and safety are threatened. But the focus of this new campaign is unusual in that it focuses on a sole brand owner, Disney.
Highlights of the campaign are summarised below.
The SAIC notice provides for the creation of a “key trademark protection zone” covering approximately seven square kilometres surrounding the Shanghai Disney Resort. Within the zone, enforcement efforts by local Administrations for Industry and Commerce (AICs) will be significantly increased to “comprehensively eliminate” Disney trade mark infringement.
In addition, the special campaign will establish “coordinated protection zones” in other areas of Shanghai and northeast China in conjunction with local AICs and market supervision bureaux (MSBs) to increase local enforcement efforts and develop cross-border information and evidence-sharing practices.
Special “emergency teams” are to be formed within designated zones to provide swift resolution of trade mark enforcement actions undertaken during the special campaign. (Just how these teams differ from existing AIC and MSB raid teams remains to be seen.)
National collective rectification
In addition to these protection zones, the SAIC notice also calls for local enforcement agencies nationwide to carry out “collective rectification” against local infringers for a period of one year following the opening of the Shanghai Disney Resort. The focus of these efforts appear targeted on production, with emphasis given to areas where fake goods are produced, where trademarks are printed and where wholesale distribution is conducted.
The SAIC notice also encourages authorities in medium and large cities nationwide, as well as popular tourist cities, to liaise closely with the Shanghai AIC to strengthen enforcement and “narrow the space for criminal elements to carry out activities infringing on Disney’s registered trademarks”.
The SAIC notice calls for “major internet platforms” to establish “Disney trademark protection mechanisms” to crack down on large scale infringement of Disney marks online. The notice does not otherwise suggest a particular role for local AICs in online monitoring or enforcement – a long-standing gap in China’s current enforcement regime. (See Online Counterfeiting Best Practices).
Training and public awareness
The SAIC notice states that the SAIC will organise training for provincial-level AICs and MSBs to boost their knowledge of Disney brands and the implementation measures for the special campaign. Local AICs and MSBs are also required to strengthen public awareness of Disney trademarks through seminars, training, media briefings and other activities carried out through the course of the campaign.
Provincial-level AICs and MSBs are required to file a report to the SAIC of their enforcement results by November 2016.
Relevance to other IP owners?
No doubt other foreign and local IP owners suffering from extreme levels of counterfeiting in China will cite the SAIC Notice in their future efforts to press the SAIC and local AICs for more systematic measures for protecting their rights. But few foreign companies have a major city government as their joint venture partner.