15 Jul
2021

George Chan

 

What has been the secret to your success over the years?

Bearing in mind that ‘success’ can mean many different things to different people, when it comes to work, I think that finding an occupation that you enjoy and that also provides you with an opportunity to effect positive change would be my criteria for being successful. In this regard, I was fortunate to come across IP law.

While the practice of law, or more specifically IP law, might not be for everyone, I see it as a means to attribute value to human qualities such as expression, ideas and distinctiveness, which makes it easy to find a purpose in what we do.

Equally important is having great clients and earning their trust. As IP attorneys, we are completely dependent on our clients’ IP rights for our work, as well as their trust in more challenging cases that require extraordinary solutions. These cases also tend to be the ones that help to bring changes to the law. Therefore, it is incredibly important to have the trust of your clients.

Lastly, I think that taking some risks in life helps. Before starting a career in IP law, I completed a PhD in medicine. However, by the time I had finished, I was fairly certain that a career in medicine was not for me. I therefore decided to start over and returned to school to study law. Some people thought I was out of my mind, but I have never regretted this decision. I ended up being much happier as an IP lawyer than I could have been as a physician or a medical researcher.

What does effective leadership look like to you?

Effective leaders seem to share two qualities: they are authentic individuals and they have the ability to make the people around them better.

Certain leadership styles may be better suited for certain situations. For example, Nelson Mandela, for me, epitomises effective leadership, while others might think of Michael Jordan, who I also admire. However, I cannot imagine Nelson Mandela successfully leading the Chicago Bulls to six championships, nor can I picture Michael Jordan successfully heading the anti-Apartheid movement.

In this sense, I think that there are many effective leaders in our profession, who are also authentic people and who tend to make those around them better. It may also be that certain styles of leadership in our profession may be better suited for specific circumstances.

What are the most important factors for foreign brand owners to consider when looking to enforce their rights in China?

I was surprised to learn that in 2019 there were over 40,000 registered trademark agencies in China and 225 foreign firms with offices in the country. It should be obvious that you cannot expect the quality of services and work product among this many service providers to be consistently high, and there can be drastic differences in overall success rates.

Taking this into consideration, the most reliable factor for determining a foreign brand owner’s success rate when enforcing its rights in China is its choice of counsel.

I have seen a number of failed contentious cases that were later salvaged after a brand owner opted for new trademark counsel. In some of these, new counsel introduced new grounds on appeal that carried that day. In others, it was the new counsel’s revised arguments and evidentiary submissions that made the difference.

The Chinese authorities have made clear their intentions to continue strengthening IP protection in the region. How is the IP regime improving and what still needs to be done?

The Chinese authorities have done a tremendous job in improving the country’s IP regime. Many people lose sight of the fact that China had to create this from scratch in the early 1980s.

Although many government institutions were involved in developing the regime, the judiciary has been particularly active in promoting the protection of IP rights through efforts such as regularly publishing interpretations, opinions and other guidance on how to address emerging and novel issues relating to IP infringement. The creation of specialised IP courts has also led to a more consistent application of IP law throughout the country. We are now seeing a trend among Chinese courts that they are prepared to deter IP infringement with larger damages awards and punitive damages issued against repeat infringers.

If I had to single out one area that needs improvement, I do not believe that I am alone in thinking that trademark squatting continues to be the biggest challenge to China’s trademark system. IP rights are private rights; therefore, brand owners cannot expect the Chinese government, the China National IP Administration (CNIPA) and the courts to solve this problem on their own. However, they can create an environment that deters trademark squatting, perhaps by making squatters liable for their actions.

Personally, I think that trademark squatters in China have inflicted a lot of damage on brand owners and have contributed nothing to China’s economy. If anything, they discourage foreign direct investment in China and waste an incredible amount of public resources each year. They should be treated as the bad-faith actors that they are.

What are the biggest challenges facing clients when it comes to protecting their brands online, and how can these be overcome?

In my experience, the biggest obstacle to enforcing brands online is the lack of registered trademark rights. Although there are many efficient brand enforcement mechanisms available for dealing with online infringement, these systems are almost entirely based on registered rights. Without registered trademarks, brand owners are typically forced to address online infringement through a civil action based on unfair competition, copyright infringement or the infringement of some other prior right, which is costly and ineffective for dealing with multiple infringers.

The problem with the lack of registered trademark rights for online enforcement purposes can be further exacerbated if a trademark squatter or pirate has already misappropriated a brand owner’s trademarks and put its marks to use. This can prevent the brand owner from entering the Chinese market or force it to abandon the market altogether. In other cases, the brand owner may need to rebrand to continue operating in China or decide to purchase its pirated rights at unreasonable prices.

How can brand owners work with external parties such as online platforms and regulatory authorities to clamp down on online infringement?

Major online sales platforms such as Taobao/Alibaba and JD have established IP dispute resolution mechanisms, through which brand owners can submit a written complaint directly to the platform via either its brand protection portals or email.

In addition, brand owners can submit online infringement complaints to the government regulatory authorities through the 12315 hotline.

However, there are limitations with these mechanisms, which were designed to deal primarily with straightforward trademark infringement disputes. Complicated issues of online infringement will still need to be addressed by the courts.

How have client demands changed over the course of your career, and how have you adapted to this?

There has been a notable trend among our clients asking for lower legal fees and more cost certainty, which is understandable. The challenge is to deliver on this request without sacrificing quality of service and work product in the process.

One simple solution that has been adopted by many trademark agencies is to expand the use of fixed fees for more commoditised or routine work.

For more complicated matters, we have found that abandoning the traditional law firm business model has helped us to deliver more value and greater cost certainty to our clients. For example, we introduced non-billable time targets, which our attorneys are expected to use for training purposes. This can include conducting legal research into clients’ cases or discussing their cases with colleagues for additional perspective. This additional training component has helped with the overall professional development of our attorneys, increased collegiality and resulted in more bespoke advice and solutions for our clients.

This does not mean that we can ignore improving efficiency, but we believe that this can be achieved by applying automation and technology to more repetitive work, with very low risk thresholds, to help save time and effort. We believe that our time is better spent on client needs that require individual attention, rather than just labour.

How has your involvement with INTA helped your professional development, and why is engagement with national and international IP associations important?

The importance of INTA cannot be overstated. Besides being the largest professional organisation representing brand owners around the world, INTA has helped to create access and opportunities for brand owners through dialogue and understanding.

In particular, the INTA Annual General Meeting has been invaluable for bringing trademark professionals from around the world to a central venue and gives some perspective on how the profession is truly international. The INTA Annual General Meeting is akin to being at a United Nations for Trademarks. Unfortunately, INTA has had to cancel its in-person meetings for the past two years due to the covid-19 pandemic. However, giving credit where credit is due, it has continued to host a virtual Annual General Meeting to ensure that we, as international professionals, continue to have a (virtual) meeting place each year.

In addition, through INTA, I have been provided with an opportunity to learn about emerging issues in trademark law, recent developments in IP law in other jurisdictions and different perspectives on the commercial value of trademark rights, as well as to expand my professional network. There are even opportunities to help shape trademark policy around the world.

You gain as much as you put in to your involvement with INTA, and the same can be said for other international or national IP associations.

What long-lasting impact do you expect the covid-19 pandemic to have on global IP practices?

The pandemic has forced many firms to rethink their work from home policy. In the past, there may have been more resistance to these arrangements, perhaps due to concerns about how it might affect productivity or the development of junior attorneys. While these concerns may still be valid, the extent to which working from home may be detrimental to productivity and training has been tested and it appears that these concerns may have been overstated.

In addition, business travel continues to be curtailed for safety reasons. However, this may persist in the future, with business travel reserved for cases that truly warrant in-person meetings. The pandemic has shown us that meetings can be conducted more personally through videoconferencing, which is both easy and cost-effective. This also has the added benefit of reducing our carbon footprint.

How do you envisage the Chinese brand protection landscape evolving in the next five years?

I am optimistic that brand protection will continue to improve in China. It has advanced concurrently with the country’s economic development, and I do not think that there will be any uncoupling of this in the near future. As China’s economy continues to grow, brand protection will continue to improve as well.

As an optimist, I also expect that trademark squatting in China will finally begin to be reined in through the collective efforts of the Chinese government, the courts, the CNIPA and brand owners. Although this is not a problem limited to China, the government and the courts have had more time to consider it when compared to other countries, and I think that China is best positioned to provide its guidance on how the problem of trademark squatting may be dealt with.

There have already been cases in which trademark squatters and pirates have been found liable for trademark squatting under the Anti-unfair Competition Law. Perhaps the Chinese government or the courts will further advance this issue of liability to add an additional (and increasingly necessary) level of deterrence against trademark squatting. However, attaching civil liability to trademark squatting as a deterrent will only be effective if brand owners are prepared to step up and commit the necessary resources to pursue litigation against offenders.

George Chan

Partner, Head of Beijing Intellectual Property Agency
[email protected]

George Chan is a partner in the China dispute resolution group and head of the Simmons & Simmons (Beijing) Intellectual Property Agency. He is a leading authority on intellectual property in mainland China and leads a veteran team that specialises in securing and enforcing IP rights, as well as advising on commercial and regulatory IP matters. Mr Chan is also at the forefront of the rapidly evolving field of online branding in China.