China and Portugal: the main differences in Intellectual Property law

Over the past few decades, China has vigorously expanded its influence in all creativity related matters. This trend, as far as the creative development in China is concerned, has led us to become acquainted with the concept of “Created in China” in parallel with the globally known “Made in China” label. In the words of the Chinese President “China is changing from a big country of introducing intellectual property rights (IPR) to a big country of creating IPR, and from pursuing IPR quantity to improving quality.”.

As such, China needs to protect itself and its artists and inventors from IPR infringement, just like any other country with creative power.

Now more than ever, the Chinese Government is focused on investing in this field of law. A demonstration of such dedication is the fact that, since 2008, China has put in place several national plans for IPR protection and the 14th Five-Year Plan period from 2021 to 2025 renewed the emphasis on protecting IPR, talent attraction, tech infrastructure, and establishing mass interdisciplinary and cross-regional innovation centers. Such plans aim not only to protect IPR but also to ensure public interests and create the proper incentives for innovation.

With a long history of friendly, constructive and mutually beneficial cooperation, but being in two very distant parts of the globe, China and Portugal’s legal frameworks in respect to intellectual property (IP) have noticeable differences and similarities that IPR owners should be aware of.

To begin with, it should be noted that both parties are members of the World Intellectual Property Organization (WIPO) and of multiple international agreements on such matters (e.g., the Paris Convention, Berne Convention, TRIPS Agreement, Patent Cooperation Treaty). Consequently, both legal systems protect the same types of rights and foresee practically the same requirements for protection.

In terms of geographical protection, the registration of an IP right in Portugal covers all its territory, while in China, one must always consider that Taiwan and the Special Administrative Regions of Macau and Hong Kong must be treated separately because each geographic area has its own registration and filing system, different legal systems and separate enforcement mechanisms. As such, filings made in the Mainland China are not effective in said territories and must be filed separately, before the correspondent public authorities.

On the other hand, and specifically with regard to Portugal, an inventor is granted provisional protection – for the beginning of damages calculation – from the date of filing the respective application. In China, similarly to the Portuguese legal regime, the duration of an invention patent shall count from the date of application.

With regards to trademarks, it is important to mention that since recent amendments introduced in the Portuguese legal regime not only the traditional trademarks – i.e. graphically represented – are registrable, but also non-conventional trademarks, such as olfactory, taste, hologram and motion trademarks, as long as it is presented in such a manner that allows to determine clearly and precisely its scope of protection and fulfills the essential trademark function of uniquely identifying the commercial origin of the products or services. On the other hand, in China, 3D and sound trademarks can be accepted but non-conventional trademarks are still not registrable.

When it comes to patent rights, one of the main differences is the fact that if a company or individual wants to file a patent application in a foreign country, for an invention that was developed in China, a prior authorization should be submitted before the Chinese Intellectual Property Office, for a confidentiality review. If the company or individual do not submit the said request and decides to directly file a patent application in a foreign country, the consequence is that such invention cannot be protected by a patent in China. As for Portugal, following the European legislative framework, such mandatory confidentiality examination is not required. Either being a Chinese or a Portuguese national, it is always possible to file a European Patent before the European Patent Office (EPO) and ask for protection under the European Patent Convention (EPC) or an international patent application under the Patent Cooperation Treaty (PCT), designating the contracting States of this treaty selected by the applicant.

On the subject of copyright, both legal systems grant protection from the date of creation of the artistic work. Furthermore, in neither system there is a need to register the right in order to benefit from the protection.

Regarding trade secrets, both in China and in Portugal, three conditions are required for the existence of such secret: i) the protected information must be secret ii) have commercial value as a result of such secrecy and, iii) the secret must have been subject to reasonable diligence by the person legally in control of the information, in order to keep it confidential.

Both in China and in Portugal, patents, utility models, designs and trademarks must be registered for the respective enforcement. In general, the prior use of a distinctive sign is not considered as a sufficient ground to overcome IP granted rights (with a few exceptions in a couple of EU member States like Germany where the earlier use of a trademark in certain circumstances is relevant for protection and enforcement).

In China, design protection falls within the scope of patent law, which is why the legal institute that protects designs is commonly translated to “design patent”.

In Portugal, designs (including shapes, colors, patterns or the combination of these elements) can be protected trough “design”, a specific legal concept foreseen in the Industrial Property Code, while “patents” and “utility patents” aim to protect the technical aspects and utilities of a device or process.

Similarly to the Portuguese law, design protection in China covers the appearance of the product, excluding from protection aspects which relate exclusively to its technical function. In general terms, only the aesthetic value of a product, where the design is original and adds commercial value to the product, such as its geometrical or formal appearance, distinctive configuration or surface ornamentation, is protected by a “design” in Portugal and a “design patent” in China. In short, in China, “patents” and “utility patents” protect how a product works, while “design patents” protect how a product looks.

In what regards to the duration of protection, in Portugal, it is 5 years from the date of application, which can be renewed, for equal periods of up to 25 years; in China, a design patent is subject to protection for a period of 10 years from the filing date. The China Intellectual Property Administration (CNIPA) announced at the end of last year that the term of protection for design patent rights will be extended to 15 years, the new law is expected to come into effect on June 2021.

In addition, the procedural requirements and administrative proceedings for the protection of IPR also diverge, as well as the enforcement proceedings. Although the concept of IPR is more recent in China than in Portugal, the Chinese legislator has imposed, in the past decades, several measures to improve the enforcement of IPR in China. Notably, China has established a dispute resolution system for intellectual property conflicts that include an IP tribunal of the Supreme People’s Court, four IP specialized courts in Beijing, Shanghai, Guangzhou and Hainan Free Trade Port, together with 20 IP specialized tribunals across different provinces. The introduction of the Supreme IP Court with national jurisdiction over civil and administrative cases regarding to appealing IP disputes also signifies a milestone.

Both China and Portugal have a specialized IP Court. Portuguese and Chinese judges are often assisted by technical advisors, particularly in patent cases. China has an IP Court of Appeal and in Portugal the Court of Appeal of Lisbon has an IP chamber.

A very distinctive feature of the Chinese procedure for the protection and enforcement of IPR is that IPR’s are protected both through judicial and administrative proceedings. Administrative entities are the authorities responsible for granting, register and manage IPRs, re-examine disputes against their decisions and make decisions on infringement disputes (they are entitled to impose administrative measures and penalties). Afterwards, in case the parties are not satisfied with the administrative decision, they may apply for administrative reconsideration. In parallel, the IPR holder can also initiate the proper civil judicial proceedings before the IP Court based on infringement of IPR. However, once the CNIPA accepts the application in accordance with laws, IPR holder shall not bring an administrative suit before a court within the statutory time limit for administrative reconsideration. If the IPR holder brings the suit before a court, and the court accepts the suit, the IPR holder shall not apply for administrative reconsideration. An administrative case involving the granting or confirmation of any IPR filed against a ruling or decision of CNIPA, shall be under the jurisdiction of the Intellectual Property Right Court of Beijing as the court of first instance.

In Portugal, the National Institute of Industrial Property (INPI) has the exclusive competence to grant IPR. Additionally, it must be referred that the national rights granted by INPI are only valid for the use and exploration of such industrial property in Portugal. The IP court is thus responsible for, among other matters like unfair competition, deciding on the appeal against INPI’s decisions granting or refusing IPR, as well as decisions concerning the enforcement of IPR, transfers, licenses, declarations of expiration, declarations of nullity and annulments or any other acts affecting, modifying or cancelling IPR.

Considering the overall picture, it is possible to conclude that, although the substantive regime for the protection of IPR is somewhat similar in the two countries (much due to the international treaties to which both are signatory parties), it is clear that in procedural, administrative and judicial matters, the differences are noticeable.  Because of the resemblances and differences between these two legal systems it is most advisable that any project seeking or enhancing IPR protection in both jurisdictions to be carefully planned and coordinated.