China Trademark Firm of the Year: Chang Tsi & Partners

Q: Can you tell us about your trademark practice (eg, team size, practice focuses and key individuals)?

A: Our practice focuses on:

• strategy development for overall trademark protection, prosecution and enforcement;
• worldwide trademark rights verification and maintenance, trademark and patent protection planning, and global registration services;
• trademark searches and monitoring;
• trademark prosecution at home and abroad;
• trademark oppositions, reviews, disputes and cancellation proceedings;
• appeals against administrative decisions;
• trademark renewals and recording changes of address;
• recording trademark registrations at Chinese Customs and training officials to identify counterfeit products;
• conducting trademark infringement investigations and evidence collection;
• handling trademark administrative actions, including raids of manufacturers and vendors of counterfeit products;
• handling trademark infringement litigation and assisting in criminal prosecutions;
• drafting, revising and reviewing trademark-related agreements, including assignments and licences;
• IP due diligence in business transactions such as investments and M&A; and
• trademark licensing and franchise strategy.

Our key individuals are Simon Tsi (managing partner), Spring Chang (founding partner), Jianmin Chen (partner), Kenneth L Ng (partner, United States), Michael Fu (partner), David Lee (partner) and Tracy Shen (partner).

Q: What are some of the advantages of working in and with a full-service firm such as Chang Tsi & Partners?

A: The lawyers of Chang Tsi & Partners are more likely to understand laws and how to manage risks than IP agents and regularly provide clients with expert legal services on complex issues. When handling complicated cases, IP lawyers work with the firm’s litigation team to assess risks and resolve disputes for clients. Chang Tsi & Partners carries out its trademark business using project teams. Each team is directed by a client manager, who provides the client with a comprehensive, one-stop service. Most trademark lawyers and agents at the firm have a Master’s or doctorate from a reputable university or law school, and have extensive experience in trademark business and litigation.

Q: A major project for 2019 was the launch of a new office management system at the Beijing office. How and why was this developed?

A: Well-known Chinese software company China Great Wall Technology Group developed a database system to specifically address the needs of Chang Tsi & Partners – this was officially launched on 1 September 2019. It creates a new digital platform based on cloud computing technology to provide attorneys and staff with flexibility and speed – efficiencies, which we are then able to share with our clients. At Chang Tsi & Partners, we constantly seek to improve our client care and firm management. This new database allows us to maximise our efforts in both realms and thus increase our value to clients.

Q: Within that structure, the firm has worked positively to ensure interaction between different departments. Can you tell us a little about how you foster a positive working environment for staff and why this is so important?

A: To create a more comfortable office environment, in September 2019 Room 602 of Tower A in Hundred Island Park, Beijing officially became one of the offices in the Chang Tsi & Partners headquarters. After being decorated, the office area was equipped with two elevators, new office furniture and hardware designed according to ergonomic principles, facial recognition devices and other convenient functions. The changes were designed to improve office efficiency and staff comfort.

Nanning Office was also expanded and the refurbishment project was extended to the new office so as to keep it in the same style as the headquarters and add more desks, so that we are well prepared to handle supporting work for headquarters.

Q: What are the main priorities for your firm’s development over the next five years?

A: Over the next five years, the Asia-Pacific market will play a significant role in the global IP market and propel worldwide development, benefiting from rapid growth in China, India and Southeast Asian countries. In this regard, Chang Tsi & Partners has made plans for the entire Asia-Pacific market, which will greatly promote its strength and reach.

The North America market has maintained its prominent position for several years now. It is predicted that development there will remain stable, especially in the United States – obviously any change in the United States will have a considerable influence on global IP progress. The leading position that Chang Tsi & Partners has maintained in the IP field for years will help it to retain quality clients in China and overseas, and to continue to grow its market share.

Q: How does the team keep abreast of the latest legal developments so as to ensure that strategic advice remains at the forefront of the industry?

A: From its services for Fortune 500 companies, Chang Tsi & Partners has grasped international concepts, cultures and methods, and rules about communication, as well as the norms and skills of international cooperation; lawyers stay abreast of industrial developments by participating in significant international meetings. The firm attaches great importance to employee training and provides comprehensive and professional training projects inside and outside the firm for both full-time and part-time employees. Thus, the service level and overall quality of all employees can be enhanced in the process of establishing a learning and innovative firm. In addition to training, the firm holds regular talks with young lawyers, where they can share their thoughts freely with partners. At Chang Tsi & Partners, the partners and the heads of department share the latest developments with their team members and regularly write relevant articles on important news.

Q: What challenges are being cited most frequently by clients?

A: Foreign clients are keen to see further improvement to the Chinese IP system, so that they can enjoy the same advantages as patent and trademark businesses in the United States. At the same time, law enforcement should also be strengthened, with greater penalties introduced for acts of IP infringement. International cooperation mechanisms should be fully utilised during customs enforcement actions so as to crack down on cross-border IP crimes and maintain the international trade order.

Most of China’s high-end electronic products are exported, while US enterprises have the best patent layout overseas. It is not uncommon for US enterprises to lodge overseas litigation and force Chinese enterprises to pay huge licence fees annually. The Chinese government should thus invest more in IP innovation, boost IP yields and devote more efforts to publicising IP protection, as well as promoting communication and cooperation with other countries.

Q: One notable win for the firm in 2019 was Jianfa v Michael Kors. Can you tell us a little about that and what makes the case so notable?

A: Chang Tsi & Partners won a second-instance ruling in a trademark infringement lawsuit, securing rights for Michael Kors to use its MK logo in China.

The issue in this case was whether the use of the unregistered MK logos by the defendant would infringe the exclusive rights of the plaintiff, who had a prior registration for the MK logo in connection with bags. The plaintiff was the senior user and its registration rights dated to 1997. In contrast, the defendant, as junior user, did not own a registration for its MK logo as used in China; indeed, it did not develop its MK logo until 2000 and did not put it into use until 2007.

The plaintiff subsequently filed a lawsuit against the defendant and its affiliated company in China, together with two other distributors before the Hangzhou Intermediate People’s Court on 9 January 2017. These claims were based on the grounds that the defendant’s use of a series of MK logos infringed the plaintiff’s trademark right. The plaintiff sought as relief an order for the defendant to cease infringement and damages of Rmb95 million (approximately $15 million).

As lead attorneys for the defendant, Simon Tsi and Michael Fu presented arguments to the first and second-instance courts that the defendant’s use of its MK logo was always in conjunction with its trademark MICHAEL KORS, which was registered in China in connection with handbags. In December 2017, the first-instance court issued a judgment to reject all the plaintiff’s claims. After a lengthy and difficult trial, the defendants prevailed. In June 2019, the Zhejiang High People’s Court issued a final judgment rejecting all claims by the plaintiff.

Q: China recently amended its legislation and issued new regulations designed to combat bad-faith filings. How do you expect these changes to affect both the trademark strategies employed by companies and the work of leading firms?

A: While agencies offering IP services are run for profit, it is more important for them to shoulder social responsibilities. Chang Tsi & Partners not only refuses to perform and incite bad-faith filings, it also plays an active role in preventing such acts. Even if the volume of business temporarily falls as a result of this stand, such actions help to establish the right idea about trademark registration in the long term and encourage an increasing number of Chinese and foreign entities to register trademarks of more substantive value and meaning. This should be how IP agencies make profits.

Q: Finally, are there any other changes that you would like to see in terms of the Chinese trademark landscape?

A: Growing optimism in the Chinese business environment should help to raise confidence and interest in investing in China from rights holders around the world. In this context, IP lawyers should find themselves dealing with higher quality clients and will need to make a greater effort to represent more complicated cases. As the Chinese government continues to reform the economy, moving from an emphasis on high-speed growth to high-quality growth, the role of intellectual property will become increasingly important.

With their profound understanding of the IP systems, IP lawyers can be involved in all aspects of this – from applications and grants to utilisation and protection. An atmosphere in which IP protection is valued will give IP lawyers a great opportunity to contribute more.