(and how this system helps Western brands to save $$?)
When the boss has spoken, everyone listens.
In March of this year, I published a short post about China’s new idea – an online system which I’ve roughly translated to “National Business Credit System” (国家企业信用信息公示系统). I will refer to it simply as “Public Credit System”. The idea is based on a century old principle – using public shaming to discourage bad conduct. The government will start publishing repeat infringer’s information on this public credit system.
China, however, never gave details on exactly how this would work. Luckily, we just received an update.
In May 2017, SAIC (essentially the head boss of the China Trademark Office and the Appeal Board) decided to endorse this idea. Later, SAIC issued a public statement (the “Notice”). Based on my review of the original text of the Notice and the media comments, I think the Notice has the following three key points:
- The Chinese government will now afford greater protection for marks such as well-known trademarks, foreign trademarks (Good news), and China’s century old brands. I was not sure exactly what the last category of marks referred to until I passed a restaurant in Chinatown this morning and it caused me to ‘connect the dots’. It refers to very famous local Chinese brands such as Quanjude (全聚德) Peking Roast Duck – the brand started in the 19th century (around the time of the Qing dynasty) and is known by virtually every Chinese. However, I don’t think a lot of local Chinese brands will fall in this category.
- The SAIC will push for more enforcement through the trademark administrative system. I expect we will start seeing more enforcement in China.
- The SAIC is keen on cutting down trademark infringement, especially involving online counterfeit products. Message: if you have been fighting an online counterfeiter for a while, this is the time to bring an action.
So, exactly what is the best way to utilize this public credit system?
Going forward, the Credit System will start incorporating infringer information so long as the infringer has received administrative penalties and its violation concerns either trademark infringements or counterfeits. Essentially, being on the list means a company / individual is a “proven” bad guy. So essentially the list helps brand owners, especially Western brand owners, to save money. There is no longer a need to prove a bad guy is a bad guy over and over again.
Take away message? Consider reporting your or your client’s bad guy to this public credit system. Citing the above SAIC notice will for sure get the authorities’ attention in China. SAIC, after all, is the head of the trademark authorities in China; the authorities may choose to ignore a lot of things but definitely not a message from their boss.
For those who want to read more, below is the link to the original publication of SAIC’s notice: