Peter Rabbit and IP Protection of Fictional Characters in China Written by Jordi Llopis and Grace Wang
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Use of Mark. The trend is more favorable here (Article 7) because PRC’s Trademark Law allows a mark to be applied to an unlimited number of goods or services, independent of true activity of applicant and with no account taken of non-use of such a registered mark. Most legislation will contain provisions relating to effective use of a mark. It may sometimes be provided that an applicant or a holder should, by means of a statement or declaration, prove to competent authority that mark is being used (excluding token or ornamental use) at time of application (as a condition for registration), at regular intervals after registration and at time of renewal. Furthermore, most countries provide that any person may request, before court, that a given registered mark should be totally or partially invalidated and removed because of non-use. The PRC's TM Law does provide that a use shall not cease for a period longer than three years, however unlike other legal texts (such as that of Community Trademark Regulation) it does not contain any provision requiring that use to be 'effective' in relation to goods and services registered under that TM, nor a requirement upon user to submit proof – if applicant so requests – of use in case of opposition to a later trademark application. In short, PRC trademark law may only confer a rather limited protection, on face of it, for so registered fictional characters. Copyright vs. Design Patents Cartoon characters such as those of Walt Disney or literary characters like those of Beatrix Potter are timelessly popular, such that they keep being regarded as what they indeed are: story tale characters. Drawings or cartoons (two-dimensional works) of literary works may also be protected independently of copyright protection as design patents, provided they meet substantive requirements. According to Article 23 of PRC’S Patent Law, “Any design for which patent right may be granted must not be identical with and similar to any design which, before date of filing, has been publicly disclosed in publications in country or abroad or has been publicly used in country, and must not be in conflict with any prior right of any other person.” In that respect, it should be emphasized that a work which is original is not necessarily new, since a graphic adaptation of an already existing literary character (whether or not it has fallen into public domain) may qualify for copyright protection (for example, literary characters Pinocchio or Cinderella adapted to cartoon form by Walt Disney Company), but may fail to fulfill novelty requirement. The same applies to drawing of a common creature (for example, cartoon character Bugs Bunny). The Teletubbies (Tinky-Winky, Po, Dipsy, and Laa-Laa) are fictional characters whose copyright owner is Ragdoll Productions Ltd. – also a British company – from their creation in 1996. Unlike situation with Peter Rabbit, Ragdoll Productions Ltd. is a legal entity that actually owns copyright, which means that after 50 years from first publication in 1996 those friendly characters will also enter public domain. And again, these have also been subject to trademark registration in European Union in 1999, and in People’s Republic of China in 2000. Once design patent elapses, industrial design will also fall in public domain and may be used by anybody without authorization, unless owner of design can, for same article, avail him/herself of a longer form of protection (copyright or registered mark). Whereas in other countries copyright protection may be denied where a work is created with intention of being exploited industrially and embodied in mass-produced articles, which is an inherent quality of works (drawings, dolls, puppets, robots, etc.) designed for merchandising, PRC’s Copyright Law does not observe this circumstance, ultimately allowing an overlap between notions of artistic works and industrial designs, where two forms of protection are generally not available cumulatively at same time. Once an artistic work such as a fictional character is incorporated into any industrial or handicraft item including packaging, graphic symbols, etc, it becomes outward appearance of that product and becomes and industrial design with limited protection. And if copyrighted fictional character has been used for these purposes and has been made public as a result, Chinese patent law in its Article 24 concedes a small grace period of 6 months to claim priority, and after that period has elapsed it will become estate of art and will break novelty of that design, which ultimately makes it impossible for copyright owner to wait until expiration of its copyright to then obtain a design patent. CONCLUSION All in all, legislation on copyright, trademarks and industrial designs may be relevant in context of merchandising of fictional characters (as Peter Rabbit case illustrates), in a desperate race to exclude competitors from using anything that may make goods look more attractive for consumers to purchase. As discussed, design patents are likely best option available to seek longer protection for a fictional character, and although trademark protection may be renewed without limit, its scope is 1) just as limited or narrow as that of one conferred by design patents, and 2) even if respectively registered or granted, it may be left to a Judge to determine if trademark is distinctive enough to what all consumers simply regard as a fictional character. However, IP rights do have their own different purpose, and shall be protected according to what law says but not beyond it. Established in 1992 as one of first private law firms in China, Lehman, Lee & Xu employs a highly-experienced team of over 110 lawyers, patent and trademark agents representing both foreign and Chinese clients throughout China in a variety of enterprises. With branches in various Chinese cities including Beijing, Shanghai, Shenzhen and Hong Kong, Lehman, Lee & Xu is considered a leader of re-established Chinese legal profession. The firm has been recognized by media and Chinese Ministry of Justice as one of best law firms in China. For more information, please visit firm’s website at www.lehmanlaw.com.

Jordi Llopis and Grace Wang are attorneys in the Beijing office of Lehman, Lee & Xu.
| | Registration of Personal Names in the PRCWritten by Jordi Llopis
Continued from page 1
Although not explicitly included in China’s Trademark law when defining what may constitute a trademark, portraits of individuals are also registered as trademarks with consent of given person. What rights then, if any, exist under trademark law in terms of protection of personal names? When defining what a trademark is, most legal texts will apply to “any word, name, symbol, or device, or any combination used or intended to be used, in commerce to identify and distinguish goods of one manufacturer or seller from goods manufactured or sold by others, and to indicate source of goods”. As discussed, in foreign countries, it is common for big celebrities to commercialize their portraits or names, or for companies to use famous names to brand products, such as Napoleon wine and Churchill cigar, but this is not a common practice in China, especially when it comes to names of politicians – these names cannot be registered as trademarks. A harmful effect for social morality? Article 10.8 establishes that ‘any sign which infringes upon socialist morality or practice or of other harmful effects may not be used nor registered as a trademark’. Making a connection between Lu Xun and alcohol can definitively be claimed as a negative social influence. However, it can be argued that grape-based wine is only alcohol with proven health benefits and might be considered a health-conscience activity in China, as well as a fashionable trend and a more upper-class activity. The Chinese government is promoting grape-based wines as an alternative to grain-based alcohol, grain that could be used to feed China’s massive population. Beatrix Potter, also a deceased famous writer, was registered as a Community Trademark in February 2004 by publishing company which owned already expired copyrights for her works. But contrary to Lu Xun case, goods to be marketed do keep a relationship with author’s reputation. A possibility for Acquired Distinctiveness? Another discussion about personal names within context of this case is whether or not consumers could come to associate deceased writer’s name with said goods, and not really about registering personal names at all since product (wine) is not attached to any actual person seeking to use his or her personal name. Article 11.3 provides grounds to refuse registration, as opposed to Article 10.8 which prohibits both use and registration, thus leaving room for use of mark in question. Specifically, Article 11.3 prohibits registration of ‘any sign which is devoid of any distinctive character’. Therefore, sign listed in paragraph above may be registered as a trademark if it has acquired a distinctive character following use and is easy to distinguish. This option would surely leave Lu Xun’s reputation vulnerable to tarnish, for if goods bearing Lu Xun trademark were of a poor quality, consumers would say “Lu Xun wine” is so bad, eventually harming reputation of a name of such a great influence in PRC. But if wine so branded started to be successful among consumers, it might –in practice- acquire distinctiveness through use. On this basis, it can be concluded that if if Lu Xun’s descendants were to operate wine company and grow its reputation, a trademark registration might be successful. An example of this is Lu Xun Art School, founded in 1938 and enjoying an excellent reputation in educational field. The registration of the鲁迅艺术学院 trademark can only serve as a way to honor deceased author. Of course, that school is conducting a commercial activity on its own, like that of selling goods bearing name, but contrary to Lu Xun’s descendants, Lu Xun is only part of overall trademark. Perhaps, a trademark like鲁迅孙子的酒公司 (Lu Xun’s Descendants’ Wine Co.) could be an alternative. Thus, while personal names may be registered as trademarks in China, 1.There must be consent from person. 2.There must be a clear connection between name applied and company or product. 3.It must not infringe social morality or practice or of other harmful effects. 4.It must be distinctive. 3. Conclusion If Lu Xun were alive today, he would have probably tried to benefit from protection conferred by a trademark registration. Could we still see today a famous writer being denied registration of his name because people have come to associate it with moral values? The Amended Trademark Law of PRC lacks any reference to registration of personal names or portraits, but if harm to social morality is not an issue, then law may not be that different from other legal systems. From this study case, we can conclude that, 1.Presumably, as long as personal name is not held in such moral, historical, cultural esteem in China to be considered owned by all of society, one should be able to register that name; 2.As suggested above, if descendant’s wine company were to gain a reputation over time, an eventual trademark registration might be successful; and 3.If as for Lu Xun Art School, trademark application was changed to Lu Xun’s Descendants’ Wine Company, application might be successful. Established in 1992 as one of first private law firms in China, Lehman, Lee & Xu employs a highly-experienced team of over 110 lawyers, patent and trademark agents representing both foreign and Chinese clients throughout China in a variety of enterprises. With branches in various Chinese cities including Beijing, Shanghai, Shenzhen and Hong Kong, Lehman, Lee & Xu is considered a leader of re-established Chinese legal profession. The firm has been recognized by media and Chinese Ministry of Justice as one of best law firms in China. For more information, please visit firm’s website at www.lehmanlaw.com.

Jordi Llopis hails from Spain and works in the Beijing office of Lehman, Lee & Xu.
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