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Oldham, Li & Nie Solicitors in Association with Watson & Band

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Oldham, Li & Nie Solicitors and Watson & Band are pleased to jointly announce their formal association which significantly expands their Legal Service Network from 2020.

OLN is a leading legal practice established in Hong Kong in 1987.  Over the years, OLN has expanded into an ever-growing team of 40 plus lawyers admitted to one or more jurisdictions, including Hong Kong, France, The United Kingdom, The United States of America, Australia and Canada and covering various legal practices.  It has continued to expand its business by opening a branch in Shanghai in 2007 to serve its China clientele. 

The current scope of practice of the Firm includes China Practice, Corporate and Commercial Law, Dispute Resolution, Employment and Business Immigration Law, Family Law, French Practice, Insolvency Law, Insurance Law, Intellectual Property Law, Japanese Practice and Tax Advisory.  With a combination of professionalism, pragmatism, cross-border skills, local knowledge, and a results-oriented approach, OLN has served clients from publicly listed companies, developers, banks, private companies, and individuals, to government bodies. 

Watson & Band (華誠律師事務所) is one of the top full-service law firms in the People’s Republic of China with more than 300 professionals in China. Founded in 1995, Watson & Band is headquartered in Shanghai having its offices in Beijing, Guangzhou, Chengdu, Zhengzhou, Suzhou, Harbin, Lanzhou, Yantai, Chizhou and Tokyo. 

Watson & Band’s practice covers Intellectual Property, Big Data Law, Foreign and Domestic Investment, Corporate and Commercial, Financial and Tax, Security Law, Employment, Insolvency and Bankruptcy, Wealth Management and Family, Anti-Counterfeiting Practice, Fair Trade Practice, and Dispute Resolution.  With its motto of Integrity, Strategy, Professionalism, and Dedication, Watson & Band provides client-oriented services with pragmatic solutions to its clients mostly from multinational and Fortune 500 companies, publicly listed international, state-owned and/or private companies, banks and financial institutions, real estate developers, individuals, NGOs, and government organizations.

The new Association will strengthen OLN’s China Legal Service Network and Watson & Band’s international practice, allowing the Association strategic and direct access to lawyers in different jurisdictions. With a deeper understanding of clients’ needs and behaviour, it will complement the ambitious growth of OLN and Watson & Band to provide high-quality legal services on a global scale. 

In addition, OLN now stands in a strong unique position to provide professional legal services for domestic, regional and international clients by entering the Chinese market network while the Association strengthens Watson & Band’s capability to deliver its legal services internationally.  With the steady demand of business flow between the two jurisdictions, the Association sets a solid foundation to empower OLN and Watson & Band to approach clients uniquely with both a domestic and global perspective.  We thank our clients for their continued support and encouragement over the years.

IP ALERT- How to Protect the Rule of a New Game?

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Human creativity takes many forms. As with many forms of creativity, new games lead to disputes over who is entitled to exploit them. But could we actually protect the rule in the new game by preventing others from exploiting it?

Copyright

Copyright can offer protection to the set of rules if it is in written form (e.g. instruction booklet) or visual form (e.g. video). However, copyright only provides protection against unauthorized substantial copying of copyrighted work, e.g. the set of rules or video. Therefore, copyright does not offer protection if someone plays the game in accordance with the new form of rules.

Even though rules standing alone are not copyrightable, it does not mean that any or all expression related to game rule is unprotectable. It is because almost all expressive elements of a game are related in some way to the rules of the game.

In US case – Incredible Technologies v Virtual Technologies Inc (No. 03-3785), the Seventh Circuit of the United States Court of Appeals held that “sequences” and “arrangement” in video games can “provide something new or additional over the idea” and hence are entitled to claim copyright protection, even though the Seven Circuit held that copying an arcade golf game’s control panel and instruction guide did not constitute copyright infringement because the copied materials were functional elements of the allegedly infringed game.

Interestingly, the court in another US case – Tetris Holding, LLC v Xio Interactive Inc (United States District Court For The District Of New Jersey, Civil Action No. 09-6115) raise examples as to which part of the video game can be copyrightable, including game labels, design of game boards, playing cards and graphical works, which are expressive elements in the video game.

This case examined the similarities between Tetris – “a facially simple puzzle game in which the player is tasked with creating complete horizontal lines along the bottom of the playing field by fitting several types of geometric block pieces (called tetrominos) together,” and Mino – “a Tetris-inspired game that could be described in the same fashion”.

The court found “the dimensions of the playing field, the display of ‘garbage’ lines, the appearance of ‘ghost’ or shadow pieces, the display of the next piece to fall, the change in color of the pieces when they lock with the accumulated pieces, and the appearance of squares automatically filling in the game board when the game is over” are protectable under copyright.

In summary, even though historically, the rules of the games have not been protected by copyright, recent cases as discussed above showed that video games inventors are likely entitled to claim copyright protection by simply providing “sequences” and “arrangements” in the video game.

Patent

The United States Supreme Court’s landmark decision in Alice Corp. v CLS Bank International (Certiorari To The United States Court Of Appeals For The Federal Circuit, No. 13–298) has provided steps as to how to protect an abstract idea (game rules) under patent. The Supreme Court in Alice explained in two steps.

The first step requires that the claims be “viewed as a whole” to determine “whether the claims at issues are directed to abstract ideas” as the abstract ideas category embodies the longstanding rule that an idea of itself is not patentable.

The second step requires “a consideration of the claim elements…both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.”

A claim that recites an abstract idea can be patent eligible if it contains an ‘incentive concept’ – i.e. an element or combination of elements that are ‘‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the itself.” The claims “must include ‘additional features’ to ensure ‘that the claim is more than a drafting effort designed to monopolize the abstract idea. . . Transformation into a patent-eligible application requires more than simply stating the abstract idea while adding the words apply it.” The additional features must be more than well-understood, routine and conventional.

In the case of Alice, Supreme Court held the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention. Stating an abstract idea while adding the words “apply it” is not enough for patent eligibility.

As such, the key principle outlined in this case is that game inventors should make sure the game rules must contain “incentive concept” and include “additional features”.

Passing off

Passing off is a common law tort, which is a form of IP enforcement by holders of unregistered trademarks against the unauthorized use of the mark or packaging including “get-up” and presented the copied goods and services as if it were their good or services.

There are 3 requirements (referred to as “classic trinity”) to satisfy before initiating Passing Off action as laid down in Reckitt & Colman Products Ltd v Borden Inc. [1990] 1 All E.R. 873, – a.k.a. “the Jif Lemon case”.

1st requirement: The Plaintiff must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying “get-up” (whether it consists simply of a brand name or a trade description, or the individual features of labelling or package) under which his particular good or services are offered to the public, such that the get-up is recognized by the public as distinctive specifically of the plaintiff’s good or services.

2nd requirement: The Plaintiff must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that the goods or services are of the plaintiff.

3rd requirement: The Plaintiff must demonstrate that he suffers or, in quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source if those offered by the plaintiff.

However, passing off mainly applies to goods or services, but there are no precedents on video games.

There is “extended” tort of passing-off in an English case Erven Warnink v. Townend & Sons Ltd [1979] AC 731, [1980] R.P.C. 31, – a.k.a. “the Advocaat case”. In this case, the Plaintiff produced a drink called “Advocaat” while the Defendant produced a drink made from eggs and fortified wine which they called “Old English Advocaat”. The latter drink, although having same alcoholic strength as the Plaintiff’s, could be considerably cheaper price because, being a wine rather than spirit-based drink, it attracted less excise duty. The Plaintiff found that the defendants were taking away an appreciable share of the market and sought an injunction to prevent them from describing their drink as “Advocaat”.

The court held the name “Advocaat” had acquired a substantial reputation and goodwill as connoting a drink with recognized qualities of appearance, taste, strength and satisfaction. Accordingly, D had committed the tort of passing off.

There is also another case regarding “extended” tort of passing-off. In the case of Bollinger v Costa Brave Wine [1961] RPC 116, which concerned the term “Spanish champagne”, the court held “champagne” could not be used other than in relation to sparkling wine produced in the Champagne district of France. Use of the term “Spanish champagne” in relation to perlada sparkling wine from Spain was likely to mislead people who were not knowledgeable about champagne into thinking that the defendant’s sparkling wine was champagne from France.

This case extends the principle of passing off beyond protection of the products to protect defined classes of products associated with a particular word or name which has or is believed to have recognizable and distinctive qualities.

But it is uncertain as to whether  passing off applies to video game rules. Further, it is only applicable if the client has built up a substantial reputation and goodwill in the mark for the goods (e.g. actual product) or services (e.g. business activity).

Based on the above judgements, game rule inventors should promote the new game rules by other means e.g. online games, sports magazine in order to build up the reputation quickly so as to enjoy the “extended” protection under tort of passing off.

Trademark

Additional protection can be obtained under trademark. The game owner is advised to devise a name (word mark)/logo (design mark) for the game closely relating to the new idea/rules. The possible trademark classification for those game is Class 16 (e.g. instructional and teaching materials) or Class 41 (e.g. provision of video games and computer games on-line).

To register a trade mark, the required information and documents are: (1) a clear representation of the trademark; (2) specification of goods and services; and (3) the name and address of the applicant in English. It will normally take around 8-12 months to register a trademark application.

A trade mark registration is prima facie evidence to establish the trade mark owner’s right to sue the infringer, hence, there is no need to establish goodwill and reputation as in the case of passing off action as discussed above.

Should you have any questions related to this article, please contact evelyne.yeung@oln-law.com and we will be pleased to answer and assist.

Employment Matters to Consider in Economic Downturn

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Hong Kong economy faced a heavy blow first by a series of protests and social events stemming from the controversial Extradition Bill in 2019, now followed by the coronavirus epidemic since January 2020.  There is even mounting global concern now as tourism slows, consumer spending weakens and supply chains stall.

Hong Kong recorded an unemployment rate of 3.4% between November 2019 and January 2020, peaking in more than 3 years.

The Organization for Economic Cooperation and Development (“OECD”) said that global growth could plummet to just 1.5% in 2020, far less than the 3% originally projected before the virus surfaced. OECD also warned that Japan, Europe and the United States could plunge into recession if the situation worsens.

Employers’ strategies  

Facing a glum economic outlook, employers may consider a number of strategies to minimize expense and maximize income.

  1. Downsizing

To withstand the challenges of recession, the most common and quickest solution is to begin with direct cost-cutting. Companies may axe certain operations, or at least temporarily suspend non-critical business activities.  Reducing headcounts is also a viable solution in essential teams or departments that cannot be closed.    

  1. Alternative work arrangements

As economist Wayne Cascio says, “Morale is the first casualty of downsizing.” Business leaders who wish to take a more long-term approach to reducing expenses can consider alternatives, such as requesting employees take annual leave or unpaid leave, or suspending work for a certain period.

These options can ease pressure on the need of severance payment due to downsizing, minimizing attention or criticism from trade unions or media. The temporary adjustment will help businesses survive financial pressure while easing employees’ panic over potential redundancy. Cathay Pacific Airways Ltd launched a voluntary unpaid leave program last December with positive reception; more than 1,000 customer service staff have applied for unpaid leaves.

  1. More alternatives

Apart from the above, some employers may consider renegotiating remuneration packages with employees. Employers taking this approach will need to think outside of the box, and offer incentives that shift the focus away from monetary awards to employee recognition.

For instance, employers can offer non-monetary compensation, including flexible work hours or insurance packages in return for a lower salary. An example is that Linklaters provides a scheme launched in 2017 which allows German non-partners to take a reduced salary in return for a fixed 4-hour week, which won praise from both partners and participating fee earners. 

  1. Others

Other cost-minimizing strategies are available to employers, such as negotiating a lower rent with landlords of the office spaces, negotiating prices with service or product suppliers, and reviewing programs or pay practices that do not offer enough return on investment etc.

Employers’ obligations when considering above strategies

  1. Downsizing

Employers need to be aware of implications of redundancy. First of all, there are severance costs for redundancy in Hong Kong for employees employed under a continuous contract for not less than 24 months. 

Although under the Employment Ordinance (Cap. 57 of the Laws of Hong Kong), severance payment can be offset against the following payments already made to the employees, employers should be careful on the calculation and to what extent such payments can be made offset:

  1. Gratuities based on length of service or occupational retirement scheme benefits (excluding any part attributable to employee’s contributions) have been paid to the employee; or
  2. Accrued benefit (excluding any part attributable to employee’s contributions) has been paid to the employee, or is being held in a mandatory provident fund scheme by the employee.

On redundancy, employers still need to observe any notice period requirements under the employment contract. If an employment contract does not provide for notice periods, the Employment Ordinance provides that the length of notice required to terminate an employment contract shall be not less than one month for a continuous without or after probation period or a payment in lieu of the notice period required.

Any employer making redundancy of employees without notice or payment in lieu is a breach of the Employment Ordinance. 

  1. Alternative work arrangements

A substantial, fundamental and unilateral variation in the terms and conditions of employment arising from the employer’s conduct has been found sufficiently serious to amount to a repudiation or fundamental breach going to the root of the contract. This would warrant an employee terminating his contract of employment without notice or payment in lieu, on the ground of constructive dismissal under common law.  Such an employee can claim for termination compensation from the employer.

As such, if employers wish to implement alternative work arrangements, it should seek consent from employees first. Both parties should have a mutual understanding of the new work arrangement in order to avoid future disputes or possible labor action, and to achieve a win-win situation.

Employers should also notify the provider of MPF of any change of contribution if necessary, and draw attention to employees of any such changes. In any event, employers still need to comply with statutory requirements such as payment of wages and MPF contribution etc. unless an employment contract has been terminated. This is to avoid claims surrounding constructive dismissal. 

As long as the employment contract is not terminated, the length of years of service of the relevant employee being affected by any alternative work arrangements, like non-pay leave or suspension of work should not be affected in principle.   

  1. Renegotiate remuneration package

An employee employed under a continuous contract can claim remedies for unreasonable variation of the terms of the employment contract against the employer if, in the absence of an express term in the contract allowing for such variation, the employer unilaterally varies the terms of the employment contract (including reducing the employee’s wages or benefits) other than for a valid reason as specified in the Employment Ordinance. 

Any such variation or change in the terms and conditions of an employment contract should be mutually agreed upon by both the employer and employees before it is implemented, to avoid claims by employees in unreasonable variation.   

Maximizing manpower efficiency during off-peak period 

To make the most use out of available employees during down seasons, corporations can divert resources and manpower to tasks that usually cannot be done during peak business seasons, such as:

  1. Back-office maintenance and other practical matters

Businesses should plan the practical elements like staffing, inventory, back-office maintenance and supplier during off season. It is important to review and analyze business data to prepare for the next peak season, or to predict consumer trends and demands in your market for the coming year.

  1. Keeping social media accounts alive to attract clients and customers

It helps to keep the followers of a business around so that they remember your business when sales are active again. Businesses can work on marketing strategy to maximize traffic and interactions on social media accounts.

  1. Diversifying clientele

Businesses can partner with other companies who needs their services or products at other points in the year. For example, a company selling summer clothes can target consumers in other parts of the world during winter in its locality.

If you have any question and wish to discuss further regarding the topic discussed or on other employment issues, please contact victor.ng@oln-law.com.

This article is for reference only. Nothing herein shall be construed as any formal legal advice for that matter to any person. Oldham, Li & Nie shall not be held liable for any loss and/or damage incurred by any person acting as a result of the materials contained in this article.

Emigration from Hong Kong to Singapore: The Importance of Migration Tax Planning (5)

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Singapore has been considered a hitherto rival of Hong Kong in many respects.  Singapore has roughly 65% of the area of Hong Kong and 75% of the population count. Both are highly developed international financial centres and regional logistic hubs.  Both adopt the common law system, with a rather simple, single-tier tax regime.  Despite of the many striking similarities, there are differences. Among them, the most apparent distinction is that Singapore is an independent sovereign state, which might be the explanation why it is becoming one of the popular emigration destinations for Hongkongers amid recent social turmoil and the coronavirus plague.  Singapore is particularly attractive to working professionals (financial services professionals in particular), as well as entrepreneurs eyeing expansion of his/her business and investment portfolios. A trend of expatriates from China migrating and moving their assets to Singapore is also observed for similar reasons.

In the six months ended 31 December 2019 alone, Hong Kong underwent a net outflow of 28,500 residents, the largest since the end of 2012.  The same trend was observed in capital flow, with Singapore seeing an estimated USD4 billion inflow from Hong Kong from April to August 2019.

How to Become a Singapore Citizen / Permanent Resident

Singapore offers a number of pathways to citizenship through permanent residence, covering family, study, business innovation, investment, and employment. 

1. Investment visas – the “Global Investor Programme” (GIP)

The criteria for investment migration is relatively high, particularly after substantial overhaul to the GIP which will take effect from 1 March 2020.  The main applicant will be required to fulfil either one of the following:

  1. at least 3 years entrepreneurial or business track record, running a company with an annual turnover of at least SGD200 million (roughly USD143.07 million as at 26 February 2020);
  2. whose immediate family owns a 30% shareholding in a company with an annual turnover of at least SGD500 million (roughly USD357.63 million as at 26 February 2020);
  3. founding a company with SGD500 million valuation and invested in by reputable venture capital firms; or
  4. being a family office principal with at least 5 years entrepreneurial, investment or management track record, and net investible assets of SGD200 million.

This represents a substantial tightening of criteria from the previous 3-year experience and SGD50 million (roughly US$35.76 million as at 26 February 2020) annual turnover requirements, and a much higher threshold than most other popular jurisdictions.

In addition, the main applicant will be required to invest at least SGD2.5 million (roughly US$1.79 million as at 26 February 2020) in either a new business entity or the expansion of an existing business operation, or a Global Investor Programme (GIP) fund.

2. Employment Pass

While Singapore has a relatively higher investment migration threshold than the other popular destinations, its employment pass has the advantage of allowing its holders to work overseas for the Singaporean employer.

Whilst the respective websites of the Immigration and Checkpoints Authority and the Ministry of Manpower have set out some basic requirements, in practice applicants have been required to be engaged in specific industries (which changes from time to time depending on the prevailing administrative preferences), receive a salary well above the published threshold, and wait for such number of years roughly commensurate with the salary level.

For the time being, as it is observed the government is trying to boost (among others) the technology and financial services sectors, executives engaged or with experience in these sectors are believed to have an upper hand.  However, potential applicants are encouraged to seek help from migration experts on the most updated policies and practice.

3. Citizenship

With a few exceptions, a permanent resident is generally eligible to apply for citizenship after having been granted residency for 2 years.

Unlike other popular migration destinations, there are notable differences between the respective rights and duties attached to Singapore permanent residency and citizenship.  The most important is that renunciation of all other nationalities is a precondition for grant of Singaporean citizenship.  Citizenships also receives different rates of subsidies in education and medical treatments from permanent residents.

4. National Service Liability

Those with male children or planning to have kids must pay attention to the national service (NS) liability (colloquially known as military service) of male citizens as well as permanent residents.  While first generation permanent residents via (among others) employment pass and investor visas are exempt from NS, the second generation male citizens and PRs (i.e. the sons of the exempted first generation migrants) are not exempt and will be required to register for NS, even if the latter resides in another country.

Being enrolled in a university, whether in Singapore or overseas, is not by itself a ground for exemption or deferment of NS liability.

Singapore does not treat lightly those who are perceived as attempting to evade NS liability, even where the individual concerned has not lived in Singapore for an extended period.  Once the individual travels to or through Singapore, he will be arrested, charged and imprisoned for a substantial period (usually counting by years or half-years, rather than weeks).  Singaporean law also forbids renunciation of citizenship by a male citizen unless he has completed his NS.

The Singaporean tax system

Singapore and Hong Kong have a limited double tax agreement (DTA) which only covers air and marine transport operations and services.

On the other hand, a number of factors make Singapore a preferred destination for those who or whose business generates substantial cross-border income:

  1. Singapore only taxes income accruing in or derived from Singapore, or received in Singapore from outside Singapore (more on this below);
  2. Singapore has its effective corporate tax rate capped at 17% (with further relief in the first 3 years of operation for Singapore tax resident companies) and individual income tax rate capped at 22%; and
  3. Singapore has no tax on capital gains and dividend distributions, regardless of source.  There is also no estate duty.

Pre-Migration Tax Planning

Given (i) the largely territorial taxation on income earned by individuals; and (ii) the absence of taxation on capital gains, dividend and estate, there is not much pre-migration tax planning to do at the individual level.  On the other hand, employment pass holders must bear in mind that if he fails to stay in Singapore for an extended period of time (at least 183 days per year), his employment income from his Singapore employer is subject to non-resident tax rate, which is substantially higher than the resident tax rate.

The focus of pre-migration tax planning will be at the corporate level.  For a cross-border conglomerate looking to set up its headquarters or holding company in Singapore, particular attention must be paid to when and what foreign income will be considered “received” in Singapore and therefore subject to profits tax.  As a general rule of thumb, the corporate structure should therefore avoid having foreign income which:

  1. is remitted into Singapore, or applied to settlement of a debt incurred in respect of a trade or business carried on in Singapore, or spent on purchasing any movable property (e.g. goods, equipment, raw materials) which is brought into Singapore;
  2. forms an integral part of income deriving from the business of the Singapore entity;
  3. has not been applied to set off against the overseas losses of the Singapore entity; and
  4. has not been taxed by a foreign jurisdiction whose headline tax rate is no less than 15%.

A company is considered resident in Singapore if the control and management of the business is exercised in Singapore.  This generally refers to location of the board meetings during which strategic decisions are made, or having its executive director or key management personnel based in Singapore.

Conclusion

As seen from above, in terms of taxation Singapore is a relatively friendly jurisdiction to individual investors and executives.  Corporations, on the other hand, should seek tax advice prior to moving its headquarters or holding company to Singapore.

OLN provides a range of migration, corporate restructuring and tax advisory services.  If you have any questions on the above, please contact one of the members of our Tax Advisory Team.

Disclaimer: This article is for reference only.  Nothing herein shall be construed as Singaporean or Hong Kong legal or tax advice, whether generally or for any specific person.  Oldham, Li & Nie shall not be held liable for any loss and/or damage incurred by any person acting as a result of the materials contained in this article.

Coronavirus and the airline industry – a Claimant’s perspective

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Background

It is hard to get away from this topic right now which is dominating the news not just here in Asia, but globally. Many office workers in Hong Kong and mainland China are being advised to work from home, shops are running out of the most basic of commodities, and as for being able to buy facemasks or sterilizing fluid? – let’s not even go there.

The aviation industry is among the hardest hit. Airlines are cutting out routes, grounding aircraft, encouraging staff to take unpaid leave and airport passenger numbers are way down. There are knock-on effects too. Major sporting events and trade fairs have been cancelled. The Shanghai Grand Prix has been called off. So too the Hong Kong Rugby 7’s in April, which are always a nice little earner for the airlines based here.

Passengers hoping to travel may be affected by flight cancellations, or re-routings as the airlines look to consolidate their operations. Can passengers recover their financial losses if they are affected in this way? Worse still (and heaven forbid) what if a passenger were to contract Coronavirus during a flight? Let’s take a look.

The law

The Montreal Convention (or MC99 for short) is an international air law convention that generally applies, as more than 120 countries around the world have signed up to it. The convention provides a uniform and predictable set of rules that govern the international carriage of passengers by air. It also imposes limits on the amounts that can be claimed, but in return the convention imposes a strict liability regime on the airlines up to that specified limit (for injury claims the limit is currently 128,821SDR’s, or USD177,000 in real money!).

Can I claim for injury?

I am not aware of any claims for injury being made by air passengers (yet), although my friends working on the ‘dark side’ will no doubt correct me on this.

A claim of this type is not as straight forward as, say, a simple head injury caused by an item falling from an overhead bin, or being scalded by a super-hot cup of coffee being dropped on your lap by the flight attendant. In fact, the approach for a Coronavirus claim would be along similar lines to how the DVT (Deep Vein Thrombosis) cases were argued, where passengers alleged that being forced to sit in cramped conditions during long-haul flights led to the formation of blood clots. Whilst these DVT claims did not succeed on the whole, they did however force the airlines to re-think their advice to passengers, and airlines now encourage passengers to walk around the cabin and stretch whenever possible.

To succeed with a Coronavirus claim, a passenger would have to satisfy the requirement under the Montreal Convention that being infected during a flight constitutes an ‘accident’ – i.e. something unusual that occurs which is external to the passenger. There is caselaw which assists in helping to establish that this requirement is met. I am not a medical man, but the symptoms which affect a victim of Coronavirus are quite severe (we are not just talking about a mild cough and a sore throat), so that hurdle may well be satisfied in most cases.

In looking to establish a claim, consider the following –

Did the airline fumigate its aircraft on a regular basis (in particular after they flown to regions badly affected by the virus)?

Did the airline operate a regime of temperature testing passengers at check-in, or as they board the aircraft?

Did the airline carry masks on board which can be issued to any passenger taken unwell during a flight with Corona-type symptoms?

Also, did the airline take any steps to segregate, and move away any passenger who became unwell? (Bear in mind many flights are operating with poor load factors, so not having spare seats is no excuse for the airline)

Has the airline complied with local and international health regulations?

Has the airline checked the aircraft’s ventilation systems recently, bearing in mind the Coronavirus outbreak?

Has the airline taken steps to follow up on information provided by health authorities that an infected passenger may have been onboard one of their flights?

What about flight cancellations and denied boarding?

Here’s the interesting thing. Airlines are not cancelling services because of Coronavirus per se, they are cancelling because of poor demand and load factors. The distinction is a subtle one, but very important nonetheless for any passenger left out of pocket by a flight being cancelled at short notice.

The Montreal Convention allows air passengers to claim compensation for the damages which flow from their travel disruption. More precisely, the convention allows passengers to claim for any financial losses incurred such as booking alternative flights, hotels, meals, ground transportation etc. where the airlines have taken no, or inadequate steps to look after the affected passengers. Proof of loss is required though, so passengers should keep hold of receipts, invoices, credit card payment slips and the like. Passengers should also have in mind the strict 2-year limitation period that applies to claims of this nature.

As for denied boarding, well if you undergo a temperature check after arriving at the airport and are deemed to be carrying a fever then the airline may be within its rights to deny travel. There would be little point in making a claim if the airline has direct evidence to show that you may be infected. Whether you can secure a refund on your ticket may depend on the type of ticket purchased, as certain promotional or cheap fare tickets have restrictive terms that apply.

Contact

If you have any questions (or better still you wish to make a claim) then send an email to gdoldham@oln-law.com

Bad Faith Trademark Filling for Names related to the COVID-19 in China

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With the Amendments to the China Trade Mark Law, taking effect on 1 November 2019 and focusing on combating bad faith trademark filling and counterfeiters, we anticipate that maliciously pre-emptively trademark filling for names in connection with the 2019 Novel Coronavirus (now officially named as coronavirus disease (COVID-19) and severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) by World Health Organization (WHO) such as abbreviation/short names for the infectious diseases, names of hospitals and terms relating to the novel coronavirus would be refused for registration by the China National Intellectual Property Administration (“CNIPA”).

Bad faith trademark filling of 火神山 (pronounced “Huoshenshan”) and 雷神山 (pronounced “Leishenshan”)

As all may have known, to deal with and curb epidemic, China commissioned a new 1000-bed make-shift hospital in Wuhan, the epicenter for COVID-19 pandemic on 3 February 2020. The hospital was completed in a record span of ten days, named Huoshenshan hospital (Chinese火神山医院) serves as a quarantine hospital designated to treat patients infected with COVID-19 and will play an essential role in the ongoing battle against COVID-19, which attracted the world’s attention. In addition to this, a second field hospital, Leishenshan Hospital (Chinese 雷神山医院) has also commenced construction using the same model.

Surprisingly, there are some trademark applications for registration of these Chinese names of the above-mentioned two hospitals, i.e. 火神山 (screenshot 1) and 雷神山 (screenshot 2) filed on 3 February 2020 in the following classes:

Class 5 for pharmaceutical and medical products

Class 10 for surgical and medical apparatus and instruments

Class 32 for non-alcoholic beverages

Class 33 for alcoholic beverages

Class 35 for advertising; business management services

Class 43 for provision of temporary accommodation services

Bad faith trademark filling for the Chinese name “非典” (pronounced “Feidian”) aka SARS

Moreover, our search for the Chinese name “非典” (pronounced “Feidian”) aka SARS (Severe Acute Respiratory Syndrome – outbreak in 2003) on the PRC Trade Mark Register which showed around 57 applications for trademarks containing the Chinese name “非典” (SARS in Chinese) filed between 2003 to 2019 (Screenshot 3). Nevertheless, none of them were approved for registration.

Comments

In accordance with the amendments to Article 4 of China Trade Mark Law prohibiting bad faith trademark filling – “an application for trademark registration filed in bad faith without any intention to use of the trademark shall be rejected” and stipulation of Article 10(8) of the ChinaTrade Mark Law, signs that detrimental to socialist morality or customs or having any other adverse effect may not be used as trademarks, we envisage that these trademark applications for registration of the names of the two hospitals, i.e. 火神山 and 雷神山 will not be approved for registration, unless they were filed in the name of the local government authority or their authorized organization.    

Article 10 of China Trade Mark Law stipulates that none of the following signs may be used as trademarks:

  1. Those identical with or similar to the State name, national flag, national emblem, national anthem, military flag, military emblem, military anthem, or decorations, among others, of the People’s Republic of China or those identical with the name or symbol of a central state organ, the name of specific place where it is located, or the name or design of its landmark building.
  2. Those identical with or similar to the State name, national flag, national emblem, or military flag, among others, of a foreign country, except as permitted by the government of the foreign country.
  3. Those identical with or similar to the name, flag, or emblem of an international intergovernmental organization, except as permitted by the organization or except that it will usually not mislead the public.
  4. Those identical with or similar to an official mark or an inspection stamp which indicates control or provides guarantee, except where authorized.
  5. Those identical with or similar to the name or symbol of the Red Cross or the Red Crescent.
  6. Those having ethnic discrimination.
  7. Those which are deceptive and likely to mislead the public in terms of the quality or origin of goods.
  8. Those detrimental to socialist morality or customs or having any other adverse effect.

The name of any administrative division at or above the county level or the name of any foreign place known by the public may not be used as a trademark, except that the place name has other meanings or is used as a part of a collective mark or certification mark. Existing registered trademarks containing place names shall continue to be valid.

Hence, the above-mentioned bad faith trademark filling would be disapproved for registration by the examiner on the absolute grounds of Articles 4 and 10 at the initial examination stage.

For more details of the above-mentioned bad faith filling and official names of the disease and virus, you may visit:

http://www.epbiao.com/shangbiaos/29062.html

http://wcjs.sbj.cnipa.gov.cn

https://www.who.int/emergencies/diseases/novel-coronavirus-2019/technical-guidance/naming-the-coronavirus-disease-(covid-2019)-and-the-virus-that-causes-it

Points to note for trade mark owners

While good faith traders will not file any trade mark in connection with COVID-19 or names of the hospital, they may encounter bad faith filers who file their trade mark before they do. 

In view of the recent amendments of the China Trade Mark Laws on bad faith filing, trade mark owners may be able to rely on this ground to pursue relevant actions such as opposition, invalidation and infringement against bad faith filers. In particular, if there is clear and strong evidence showing that the bad faith filer has filed a certain amount of applications and has no real intention to use those trademarks and among which some trademarks belong to others or copies/imitations/translations of the rightful owners’ trademark, but purposely to take advantage of first to file system in China and ride on the rightful owner’s reputation and fame.

Should you have any trademark matters/questions pertaining to inherent registrability, usable availability or bad faith filers in China, please contact evelyne.yeung@oln-law.com or angel.luo@oln-law.com  and we will be pleased to answer and assist.

Screenshot 1 showing applications for 火神山: Source from weibo.cn, one of the most popular online media in China

Screenshot 2 showing applications for 雷神山: Source from weibo.cn, one of the most popular online media in China

Screenshot 3: Source from CNIPA online Trade Mark Register