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June 15th, 2015:

Japan and Korea stake out tough anti-counterfeiting positions in proposed trade deal

Trade representatives from 16 Asian countries are convening in Kyoto this week for an eighth round of negotiations over the Regional Comprehensive Economic Partnership (RCEP) agreement. In the run-up to the meeting a series of leaks revealed the IP positions of four key parties to the deal (Japan, Korea, India and ASEAN), which indicate that the East Asian nations are hoping to codify tough measures against counterfeiting.

Back in April, this blog covered the leaked provisions of the proposed Trans-Pacific Partnership (TPP), which some observers feared could affect plain packaging laws in Australia and elsewhere by giving tobacco companies more leeway to sue governments over alleged appropriation of their brand assets. The RCEP is an alternative trade deal being negotiated exclusively by Asian countries. But while it is relatively unknown compared to the TPP, if passed the RCEP could have a greater impact on regional trademark enforcement efforts. That is because, unlike the TPP, it involves China, India and the whole of ASEAN (though four ASEAN states are also negotiating TPP). Taken together, these markets probably account for the lion’s share of the enforcement activities undertaken by global brands focused on the region. Therefore, any change in policy could have a notable impact.

The question on everyone’s mind is how similar or dissimilar the RCEP will be to the TPP. Four proposed IP chapters leaked by Knowledge Economy International (KEI) give insight into the negotiating positions of Japan, Korea, India and ASEAN (which is negotiating as a bloc), while a leak of the proposed IP chapter of the latter agreement revealed what is shaping up to be a strongly rights-holder friendly system. Given the Obama administration’s repeated refrain of “If we don’t write the trade rules, China will”, there has been some speculation about whether RCEP could emerge as a homegrown alternative to the TPP – potentially without all of the IP protections sought by Western corporations. But the leaks make clear that Japan and Korea are pushing for a TPP-style regime.

While many of the most contentious flashpoints are in the patent space, surrounding issues like compulsory licensing for pharmaceuticals, anti-counterfeiting is one area where there are marked differences in the proposals that have now been made public.

One area in which both Japan and Korea are seeking to enshrine strong anti-counterfeiting measures is in the realm of customs enforcement. Both propose that customs authorities be empowered to act ex officio to suspend the release of trademark infringing goods for import, export or transhipment. India’s proposal makes no specific mention of customs enforcement, while ASEAN’s includes a general call for cooperation on border measures. The leaked TPP draft makes clear that there are splits within ASEAN on the issue: Vietnam opposes the inclusion of ex officio powers for customs officials, while Singapore, Brunei and Malaysia support granting such authority only over goods imported into a country, not goods which are exported or in transit.

Another strict measure sought by both Korea and Japan relates to criminal prosecution in cases of wilful trademark infringement or counterfeiting on a commercial scale. Both countries’ proposals also detail standards to ensure that wronged parties are granted adequate damages and other remedies in civil and criminal litigation. Again, neither the ASEAN nor the Indian chapters cover this issue in detail. The TPP draft includes similar language but there is ample disagreement over the details; Vietnam, for example, supports criminal sanctions for commercial-scale import of counterfeit goods, but not export.

Beyond counterfeiting, there is discord over whether the agreement should require signatories to extend protection to non-traditional trademarks. India’s submission proposes that parties may require a mark be visually perceptible to be reigistrable. Korea, which allows sound and scent marks, wants such marks to be accepted throughout the region. It may be joined in this by Japan, which has introduced its own system of non-traditional marks in the time since its proposal was authored. The TPP draft in circulation looks set to extend protection of sound marks, while parties including Vietnam, Brunei and Japan oppose adding similar language about scents.

Another issue this blog has covered which is likely to be a hot topic in Kyoto is India’s strict FDI rules. Countries including Japan and Australia are likely to ask for the addition of an e-commerce chapter to the agreement pressuring India to open up that part of its economy, allowing foreign brands to sell goods online directly to Indian consumers.

Of course the usual caveats apply here: these positions are all at least nine months old and could be far from what ends up in the final agreement (especially because we haven’t yet heard from China). But it’s clear that Japan and Korea have an incentive (due to the former’s role in the TPP and the latter’s FTA with the US) to lobby for robust trademark protection policies. Rather than rival alternatives, it looks likely that the two agreements could be mutually reinforcing. With the TPP near completion and the RCEP aiming to wrap up negotiations by the end of this year, we should soon have more than just speculation to go on. And then we’ll know who gets the first crack at “writing the rules” for intellectual property in Asia.

Illegal immigrant jailed as £100k of tobacco seized

Trading standards officer Rhys Harries with the seized haul.

Trading standards officer Rhys Harries with the seized haul.

AN illegal immigrant living in Swansea has been sentenced to 15 months in prison after being caught with more than £100,000 worth of counterfeit tobacco.

Ming Chen, of Richardson Street in Sandfields, pleaded guilty to the illegal sale, manufacture and distribution of counterfeit tobacco.

The 170 kg counterfeit tobacco is thought to have a combined street value well in excess of £100,000.

The investigation by Swansea Council’s trading standards department led to the seizure of the tobacco along with all the packing equipment including plastic pouches and holographic stickers.

Officers from the council’s trading standards made the discovery at Chen’s flat in March.

Chen pleaded guilty to one count of fraud and seven further counts of possessing counterfeit tobacco and pouches.

Chen was also ordered to pay £120 victim surcharge.

Cabinet member for wellbeing and healthy city Mark Child said: “This is a significant find for our trading standards team and one which has resulted in a large quantity of counterfeit tobacco being removed from the streets of Swansea.

“This type of activity has links to serious organised crime and we are doing what we can in partnership with police to ensure that it is stopped in Swansea.

“I am pleased that trading standards have been successful and we will continue to take decisive steps to remove illegal tobacco from the streets.”

Members of the public with concerns about the sale of illegal tobacco in their community are encouraged to report the matter to the trading standards service on 01792 635600.