Trademarks in China 2024

Trademarks in China 2024

Trademarks in China 2024

TRADEMARKS 2024

CHINA

Yixian Chen, Paul D Jones

(Jones & Co)

LEGAL FRAMEWORK

Domestic law

  1. What is the primary legislation governing trademarks in your jurisdiction?

The Trademark Law of the People’s Republic of China (the Trademark Law) and Regulations on the Implementation of the Trademark Law of the People’s Republic of China (the Regulations) are the primary pieces of legislation that govern trademarks in China.

International law

  1. Which international trademark agreements has your jurisdiction signed?

China has signed the following seven international trademark agreements:

  • the Convention Establishing the World Intellectual Property Organization, enacted in China on 3 June 1980;
  • the Paris Convention for the Protection of Industrial Property, joined by China on 19 March 1985;
  • the Madrid Agreement Concerning the International Registration of Marks, enacted in China on 4 October 1989;
  • the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, enacted in China on 9 August 1994;
  • the Trademark Law Treaty, signed by China on 28 October 1994;
  • the Agreement on Trade-Related Aspects of Intellectual Property Rights, joined by China on 11 December 2000; and
  • the Singapore Treaty on the Law of Trademarks, signed by China on 29 January 2007.

Regulators

  1. Which government bodies regulate trademark law?

The Trademark Office of the China National Intellectual Property Administration is the relevant regulatory authority.

REGISTRATION AND USE

Ownership of marks

  1. Who may apply for registration?

Any individual or registered corporate entity can apply. Joint applicants are also allowed.

Scope of trademark

  1. What may and may not be protected and registered as a trademark?

Article 8 of the Trademark Law of the People’s Republic of China (the Trademark Law) provides that any visual sign capable of distinguishing the source of goods or services, including any word, design, letter, number, three-dimensional symbol, color combination, sound, or a combination of the above, may be registered as a trademark. Distinctive trade dress and slogans are also registrable.

Article 10 of the Trademark Law specifies what cannot be used as trademarks:

  • those identical to or similar to the state name, national flag, national emblem, national anthem, military flag, army emblem, military songs, medals or decorations of the People’s Republic of China;
  • those identical with the names and signs of central state organs, names of the specific locations thereof, or those identical with the names or device of landmark buildings;
  • those identical with or similar to the state names, national flags, national emblems or military flags of foreign countries, unless permitted by the government of that country;
  • those identical with or similar to the names, flags or emblems of international inter-governmental organizations, unless permitted by the organization concerned or is unlikely to mislead the public;
  • those identical with or similar to an official sign or inspection seal that indicates control and guarantee, unless authorized;
  • those identical with or similar to the names or signs of the Red Cross or the Red Crescent;
  • those of discrimination against any ethnicity;
  • those of fraud that may easily mislead the public in the characteristics such as the quality of goods or place of production; and
  • those detrimental to socialist morals or customs or having other unhealthy influences.

In addition, the name of any administrative division in China at or above the county level or the name of any foreign place may not be used as a trademark.

Article 11 specifies what cannot be registered as a trademark initially but may be registered as a trademark if it has acquired distinctiveness through use:

  • marks that only bear the generic names, devices or model numbers of the goods;
  • marks that simply indicate the quality, main raw materials, function, use, weight, quantity or other features of the goods; and
  • marks that lack of distinctive characteristics.

Article 12 excludes trademark protection for three-dimensional marks if the marks are functional.

Article 16.1 states that to avoid misleading the public a mark containing a geographical indication where the goods or services do not originate from that region cannot be registered.

At the time of writing, scent marks, motion marks, hologram marks, taste marks and touch marks are not registrable in China.

Unregistered trademarks

  1. Can trademark rights be established without registration?

China is a registration-based or first-to-file trademark jurisdiction. Generally, an exclusive right to use a trademark will vest only upon registration. However, the real owner of an unregistered mark may be able to oppose or invalidate a trademark registered by a squatter by invoking grounds such as bad faith, prior use, well-known status, prior business relationships, etc. In addition, article 59(3) of The Trademark Law provides a defense for prior users of unregistered trademarks against potential claims of infringement.

Other laws such as the Anti-Unfair Competition Law and the Copyright Law may also protect unregistered marks if the Trademark law is not applicable.

Famous foreign trademarks

  1. Is a famous foreign trademark afforded protection even if not used domestically? If so, must the foreign trademark be famous domestically? What proof is required? What protection is provided?

Foreign trademarks that have not been used, exposed or registered in China do not enjoy trademark protection.

However, unregistered foreign trademarks may be recognized as ‘well-known’ trademarks by the China National Intellectual Property Administration (CNIPA) and the courts in China on a case-by-case basis. Article 14 of the Trademark Law provides the factors one must consider for a mark to be recognized as ‘well-known’. They are:

  • how popular the trademark is in its trading area;
  • the duration the trademark has been in use;
  • the duration, extent and geographical range of the trademark’s advertising and publicity;
  • the records on the protection of the trademark as a well-known trademark; and
  • other reasons for the reputation of the trademark.

When determining whether the mark is a famous foreign trademark, it is worth noting that Chinese consumers tend to remember Chinese character marks better than marks in other alphabets.

The benefits of registration

  1. What are the benefits of registration?

Specialized IP courts in China hear trademark cases and a trademark registration certificate is prima facie evidence of its contents. Therefore, a registration certificate can be vital for trademark actions or infringement proceedings. In addition, registered trademarks may be recorded with China’s General Administration of Customs to prevent persons from importing or exporting illegal goods to and from China. Businesses may also need to provide a trademark registration certificate to other government regulatory authorities and e-commerce platforms for their continued operations.

Filing procedure and documentation

  1. What documentation is needed to file a trademark application? What rules govern the representation of the mark in the application? Is electronic filing available? Are trademark searches available or required before filing? If so, what procedures and fees apply?

Documents needed to file a trademark application include:

  • the trademark;
  • the name and address of the applicant;
  • a copy of the identity document of the applicant (e.g, for foreign entities, a copy of their Certificate of Good Standing will suffice; for foreign individuals, a copy of their passport will suffice);
  • a description of the goods or services; and
  • a priority claim and supporting documents (if applicable).

A power of attorney signed with the local Chinese trademark agent is also required for foreign citizen or entity that does not have a place of business in China. Note that any document or information not written in Chinese needs to be translated into Chinese. Electronic filing is available.

Since 1 January 2022, the CNIPA no longer issues hard copies of registration certificates.

It is important to refer to the Chinese Classification Guide when drafting the description of wares and services. Directly translating the description from the trademark applications or registrations in your home country may not be the best option.

Trademark clearance searches are recommended but not required prior to the filing.

Registration time frame and cost

  1. How long does it typically take, and how much does it typically cost, to obtain a trademark registration? When does registration formally come into effect? What circumstances would increase the estimated time and cost of filing a trademark application and receiving a registration?

Currently, examiners take approximately seven months to examine an application. In addition, there is a three-month publication period. More time may be required if the examiner issues a refusal or amendment notification or if anyone files an opposition against the application.

The registration will formally come into effect at the end of the publication period provided no oppositions have been filed.

The official fee for filing a trademark application under one class is 300 yuan for paper applications and 270 yuan if filed online. Professional fees vary widely based on the engaged firm.

Classification system

  1. What classification system is followed, and how does this system differ from the International Classification System as to the goods and services that can be claimed? Are multi-class applications available and what are the estimated cost savings?

China has developed a sub-classification system based on the Nice Classification system. In China, each class of goods or services is further divided into sub-classes that follow a set of cross-referencing rules to determine similarities between goods or services in different classes and sub-classes.

Although multi-class applications can be filed, they cost as much as multiple single-class applications.

Examination procedure

  1. What procedure does the trademark office follow when determining whether to grant a registration? Are applications examined for potential conflicts with other trademarks? Are letters of consent accepted to overcome an objection based on a third-party mark? May applicants respond to rejections by the trademark office?

The CNIPA conducts a formal and substantive review of applications based on the rules in the Trademark Review and Examination Manual. In summary, once an applicant has filed all the required application documents and paid the requisite fee, the CNIPA will accept the application and issue an Acceptance Notice before proceeding to a substantive examination. During the substantive examination phase, the CNIPA may issue an Amendment Notification requiring amendments to the application or a Refusal Notification. At this stage, trademark applications are examined for potential conflicts against prior trademark applications and registrations as well as other absolute and relative grounds of refusals under the Trademark Law. If the amendment has been made and accepted or if the refusals are overcome, the application will be published for three months followed by registration provided no oppositions are filed.

The primary grounds for refusals are prior similar marks and confusing similarity as well as the Amendment Notification issued due to the use of non-standard terms according to the Chinese Classification Guide.

Once the trademark has been filed, no amendment to the description of goods or services can be made, unless required by the CNIPA.

Consent letters may be used to overcome refusals based on confusing similarity with a prior mark. Apart from the practical difficulties in obtaining consent, it is important to remember that the Trademark Office will consider the public interest and may refuse to accept a consent letter if the marks are identical.

Applicants may respond to rejections by filing an appeal.

Use of a trademark and registration

  1. Does use of a trademark or service mark have to be claimed before registration is granted or issued? Does proof of use have to be submitted? Are foreign registrations granted any rights of priority? If registration is granted without use, is there a time by which use must begin either to maintain the registration or to defeat a third-party challenge on grounds of non-use?

Use or proof of use of a mark is not a prerequisite for trademark registration in China.

Foreign registrations may be granted priority rights provided a trademark application is filed in China within six months of applying outside China and when both applications cover the same trademark and identical goods or services. Priority claims must be included by applicants in their Chinese trademark application with priority documents submitted to the CNIPA.

Registered trademarks should be used in China within three years of their registration to avoid cancellation for non-use. Any person can file a non-use cancellation application in China after three years have lapsed from the date of registration of a trademark.

Markings

  1. What words or symbols can be used to indicate trademark use or registration? Is marking mandatory? What are the benefits of using and the risks of not using such words or symbols?

Under the Regulations on the Implementation of the Trademark Law of the People’s Republic of China, a user of a registered trademark could indicate trademark registration by marking it with the phrase (meaning Registered Trademark) or with trademark registration symbols, such as or ® on the upper right or lower right corner of the trademark.

Marking is an entitlement, not a legal obligation. Marking demonstrates the registrant’s exclusive right to use the registered mark and may help prevent infringement.

Last, a trademark registration and the use of such trademark is mandatory for the sales of certain products, such as tobacco and e-cigarettes.

Appealing a denied application

  1. Is there an appeal process if the application is denied?

If a trademark application is denied, an appeal can be filed to the body previously known as the Trademark Review and Adjudication Board, which has since been merged into the CNIPA. If an applicant is dissatisfied with the CNIPA’s decision, an administrative proceeding can be filed before an IP court. The IP Court’s ruling can be further challenged before the High People’s Court. Last, and if applicable, an application for retrial may be filed before the High People’s Court or the Supreme People’s Court.

Third-party opposition

  1. Are applications published for opposition? May a third party oppose an application prior to registration, or seek cancellation of a trademark or service mark after registration? What are the primary bases of such challenges, and what are the procedures? May a brand owner oppose a bad-faith application for its mark in a jurisdiction in which it does not have protection? What is the typical range of costs associated with a third-party opposition or cancellation proceeding?

Trademark opposition proceedings

A trademark application can be opposed during the three-month publication window by anyone based on absolute grounds or by a prior rights holder or an interested party based on relative grounds, with limited exceptions.

Trademark invalidation proceedings

A trademark invalidation application can be filed within five years of registration by anyone based on absolute grounds if the mark was acquired by fraud or illicit means, and may also be invalidated by a prior rights holder or an interested party based on relative grounds, with limited exceptions.

Trademark non-use cancellation proceedings

A trademark non-use cancellation application can be filed by anyone based on the non-use of a registered trademark for three consecutive years from the date of its registration.

The three aforementioned proceedings must be filed first with the CNIPA.

Under article 4 of the Trademark Law, an application in bad faith lacking an intention to use is an absolute ground for opposing or invalidating a trademark.

The official fee for opposition or cancellation proceedings before the CNIPA is 500 yuan for paper filings and 450 yuan for e-filings. The official fee charged for invalidation proceedings before the CNIPA is 750 yuan for paper filings and 675 yuan for e-filings. Professional fees vary widely based on the engaged firm.

Duration and maintenance of registration

  1. How long does a registration remain in effect and what is required to maintain a registration? Is use of the trademark required for its maintenance? If so, what proof of use is required?

Trademark registrations remain in effect for 10 years from the date of registration and they can be renewed. Evidence of trademark use is not a prerequisite for renewal but is required for maintaining the registration in the event of a non-use cancellation being filed.

Surrender

  1. What is the procedure for surrendering a trademark registration?

The registrant must file an application to surrender or voluntarily withdraw the trademark registration, either in part or in its entirety. In addition, the registrant must return the original registration certificate to the CNIPA or provide an explanation if unable to do so.

The validity of the registered trademark, either in part or as a whole, will end on the date when the CNIPA received the surrender or voluntary withdrawal application.

Related IP rights

  1. Can trademarks be protected under other IP rights?

Trademarks may also be subject to protection as copyrights under the Copyright Law or as design patents under the Patent Law. Article 6 of the Anti-Unfair Competition Law may also provide protection.

Trademarks online and domain names

  1. What regime governs the protection of trademarks online and domain names?

The same laws apply to trademark infringement on the internet. However, to combat online infringement, the brand owner should implement an active infringement monitoring routine, consider conducting on-site investigations of potential infringers, and collect infringing evidence in compliance with the rules of evidence in China such as conducting a notarized purchase. E-commerce platforms in China are required to establish rules on IP protection and brand owners can utilize the notice and take-down rules implemented by e-commerce platforms to combat online infringements. Brand owners should also pay attention to the increasingly popular trend of live-streaming e-commerce as it poses unique challenges for enforcement.

For domain names, the China ccTLD Dispute Resolution Policy is the primary legal protection for two ccTLD domain names: .CN; and . (China in Chinese). There are three procedures for resolving domain name disputes:

  • if a domain name has been registered for less than three years in China, the infringed party can file an administrative complaint to one of the Dispute Resolution Service Providers designated by the China Internet Network Information Center;
  • either party involved in a dispute can initiate civil litigation before a Chinese court at any time; and
  • either party involved in a dispute can apply for arbitration with a Chinese arbitration institution at any time.

LICENSING AND ASSIGNMENT

Licenses

  1. May a license be recorded against a mark in the jurisdiction? How? Are there any benefits to doing so or detriments to not doing so? What provisions are typically included in a licensing agreement?

Article 43 of the Trademark Law of the People’s Republic of China (the Trademark Law) requires the licensor of a trademark to record the trademark license at the Trademark Office. One benefit of recording a trademark license is that it can be used as a good faith defense in a claim by a third party.

Article 6 of the Measures for Trademark License Contracts Recordal states that a trademark licensing contract must include the following:

  • the licensed trademark and its registration number;
  • the range of commodities covered by the trademark license;
  • the period of licensed use;
  • the method for providing the symbol of the licensed trademark;
  • the terms of supervision by the licensor over the quality of the commodities using the licensed trademark; and
  • the terms on indication of the name of the licensee and the place of production on the commodities on which the licenser’s registered trademark is used.

Assignment

  1. What can be assigned?

In China, both registered and pending trademarks can be assigned. Identical or similar trademarks must be assigned together to avoid a refusal of the Assignment Application by the China National Intellectual Property Administration (CNIPA) based on potential confusion for consumers.

Partial assignments are not allowed in China.

Assignment documentation

  1. What documents are required for assignment and what form must they take? What procedures apply?

A trademark Assignment Application must include the following documents:

  • the standard application form signed by both the assignor and the assignee;
  • the identity documents of both parties;
  • the power of attorney if an agent is involved; and
  • a copy of any Chinese translations if the application documents are not in Chinese.

Article 42 of the Trademark Law provides that a trademark assignment agreement shall be signed by both the assignor and the assignee. However, this agreement does not need to be filed with the CNIPA as part of the Assignment Application documents.

Notarization or legalization is not required.

Validity of assignment

  1. Must the assignment be recorded for purposes of its validity?

The assignment must be approved and recorded by the CNIPA to become valid. The effective date of the assignment is the date on which the CNIPA approves the Assignment Application.

Security interests

  1. Are security interests recognized and what form must they take? Must the security interest be recorded for purposes of its validity or enforceability?

Security interests are recognized in China and registered trademarks can be pledged. The pledgor and the pledgee shall sign a trademark pledge agreement and must jointly file a trademark pledge recordal application before the CNIPA. The pledge takes effect only when approved by the CNIPA.

Notarization or legalization is not required.

ENFORCEMENT

Trademark enforcement proceedings

  1. What types of legal or administrative proceedings are available to enforce the rights of a trademark owner against an alleged infringer or dilutive use of a mark, apart from previously discussed opposition and cancellation actions? Are there specialized courts or other tribunals? Is there any provision in the criminal law regarding trademark infringement or an equivalent offence?

Civil litigation, criminal action and administrative measures are the three types of proceedings available to trademark owners for enforcing their rights against an alleged infringer:

  • to commence civil ligation proceedings a trademark owner can file a lawsuit before the applicable People’s Republic of China (PRC) courts as set out in the Interpretation of the Supreme People’s Court on Several Issues concerning the Application of Law in the Trial of Civil Cases of Trademark Disputes;
  • criminal action can be brought up by the trademark owner to the Public Security Bureau or the People’s Procuratorate directly or transferred to the Public Security Bureau from the local department of the State Administration for Market Regulation. The trademark owner can also initiate private prosecution directly to a court; and
  • administrative measures may include injunctions or punishments against trademark infringement executed by the local department of the State Administration for Market Regulation.

In addition to the Intellectual Property Tribunal of the Supreme People’s Court, there are four IP courts (Beijing, Shanghai, Guangzhou and Hainan) and 27 IP tribunals (Nanjing, Suzhou, Wuhan, Chengdu, Hangzhou, Ningbo, Hefei, Fuzhou, Jinan, Qingdao, Shenzhen, Tianjin, Zhengzhou, Changsha, Xi’an, Nanchang, Lanzhou, Changchun, Urumqi, Haikou, Xiamen, Jingdezhen, Chongqing, Wenzhou, Wuxi, Xuzhou and Shenyang) across China.

Under the Criminal Law of the PRC, there are three criminal offenses related to trademark infringement in serious circumstances:

  • using a trademark that is identical to a registered mark on the same kind of commodities or services without the permission of the trademark owner;
  • knowingly selling counterfeit products with significant illegal income; and
  • illegally manufacturing or selling illegally manufactured registered trademark symbols.

Procedural format and timing

  1. What is the format of the infringement proceeding?

China is a civil law jurisdiction. There is no discovery in China. At the direction of the judge, there is advanced execution to preserve evidence although it is not commonly available. Live testimony is permitted but is unusual in trademark proceedings. Experts are generally appointed by the court.

The plaintiff must collect its own evidence according to the Chinese evidence rules. The type of documentary evidence presented is a key factor in securing a favorable ruling from a Chinese court in such proceedings.

Burden of proof

  1. What is the burden of proof to establish infringement or dilution?

Article 64(1) of the Civil Procedure Law of the PRC provides that a party shall bear the burden of proof for its claims. Therefore, the party claiming infringement bears the burden of proving infringement. Where there is no evidence or if the evidence provided is insufficient to support the claim, the party that bears the burden of proof shall suffer any unfavorable consequences.

Safe harbor provisions are available as a defense for e-commerce platform service providers.

Standing

  1. Who may seek a remedy for an alleged trademark violation and under what conditions? Who has standing to bring a criminal complaint?

Article 60 of the Trademark Law of the People’s Republic of China (the Trademark Law) provides that a trademark registrant or any interested party may seek redress for alleged trademark infringements. Interested parties include the legal successors to the property rights in the registered trademarks, the trademark licensees, and other entities that have competent evidence proving their interest in the right of the concerned trademark.

In addition, anyone can file a complaint for trademark infringement to the State Administration for Market Regulation.

Border enforcement and foreign activities

  1. What border enforcement measures are available to halt the import and export of infringing goods? Can activities that take place outside the country of registration support a charge of infringement or dilution?

The General Administration of Customs of China (GACC) has the authority to halt the import and export of infringing goods. According to the Regulation of the PRC on the Customs Protection of Intellectual Property Rights, the border enforcement measures are divided into two kinds:

  • protection ex officio refers to proactive measures taken by the GACC during their supervision of imports and exports. When the GACC does find any import or export goods suspected of infringing on any intellectual property right (IPR) that is registered with the GACC, the GACC can detain the goods, investigate the IPR infringement and impose penalties on the infringers; and
  • protection on request refers to measures taken by the GACC at the request of an IPR holder to detain goods that are suspected of infringement when such goods are being imported or exported. Although trademark recordation with the GACC is not necessary, it is recommended. In practice, it is uncommon for the GACC to detain wares at the request of brand owners.

When trademarks are placed on goods made in China meant only for export, it is possible with proper evidence, it is possible to bring actions in China against Chinese infringers selling or soliciting to sell infringing products outside of China.

It is prudent for foreign parties to register their trademarks with the GACC to prevent hold-ups.

Discovery

  1. What discovery or disclosure devices are permitted for obtaining evidence from an adverse party, from third parties, or from parties outside the country?

As a civil law jurisdiction, China does not have provisions for discovery. A notarized purchase of infringing products purchased from the infringer is a permitted and commonly used way to prove infringement. The notarization of the infringer’s online postings of infringing products, chat histories regarding the solicitation of sales, and the infringer’s official website or e-commerce shop page is also commonly used.

It is important to remember that the Chinese courts rely more on third-party documents and less on self-made evidence such as affidavits.

Timing

  1. What is the typical time frame for an infringement or dilution, or related action, at the preliminary injunction and trial levels, and on appeal?

For a first-instance civil action, it typically takes about two to six months from the commencement of the litigation up to the trial. This excludes the time taken for collecting evidence, which normally takes several months, especially for foreign brand owners.

Limitation period

  1. What is the limitation period for filing an infringement action?

Article 18 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Trademark Civil Dispute Cases provides that the limitation period for a trademark infringement case shall be three years, starting from the date when the trademark registrant or the interested party knows or should have known about the infringement as well as the infringer.

Even where a claimant has crossed the prescribed limitation period, the court may issue an injunction requiring the defendant to cease any infringement and may further order the payment of compensation on a special calculation method, provided that at the time of filing the lawsuit, the infringement is continuing and the trademark in question is valid.

Litigation costs

  1. What is the typical range of costs associated with an infringement or dilution action, including trial preparation, trial and appeal?

Litigation costs for trademark infringement in China vary according to the nature and complexity of the case. Generally, litigation costs in China are significantly lower when compared with major common law jurisdictions, and parties are more likely to appeal.

According to the Measures on the Payment of Litigation Costs, the litigation costs paid by a party concerned to the People’s Court shall include:

  • the case acceptance fee;
  • the application fee; and
  • the traffic, accommodation and living expenses, and subsidies for missed work incurred by witnesses, authenticators, interpreters and adjustment makers for their appearances in the People’s Court on designated dates.

In addition, there are lawyers’ professional fees and fees associated with the preservation of infringing evidence, which vary according to the firm and the case. For foreign brand owners, there would be an additional fee for notarizing and legalizing litigation documents.

Costs are borne by the losing party. In a case partially favoring the plaintiff, the court shall decide the quantum of litigation costs to be borne by the parties after considering the specific circumstances of the case. Generally, foreign entities consider costs awarded by Chinese courts to be low.

Appeals

  1. What avenues of appeal are available?

Generally, there is a right of appeal from the initial hearing to the next level of court. Beyond that, appeals are accepted by leave, commonly referred to as retrial.

Outside of the major cities, appeals may be referred to specialized IP appellate courts or tribunals for that area.

The levels of courts are determined based on the amount in dispute and there are four levels of courts in China.

Defenses

  1. What defenses are available to a charge of infringement or dilution, or any related action?

Common defenses against an infringement claim are as follows.

Fair-use defense

The owner of the exclusive rights in a registered trademark may not prohibit others from fair use where:

  • the mark bears the generic name, device or model number of goods and (or) services or directly refers to the quality, raw materials, function, use, weight, quantity or other features of the goods, or bears geographical names;
  • the mark is a three-dimensional symbol where the shape is generated from the nature of the goods in respect of which the mark is used, or the shape of the goods realizes certain technical effects or provides the goods with functional value; or
  • other fair uses such as a use in good faith to describe or explain the sources or the characteristics of the goods and (or) services.

Conflicts of rights defense

  • An identical or similar mark has been used by the defendant before the use of the plaintiff’s registered trademark and the defendant’s use of the mark generated certain influence; and
  • the mark has dissimilarities from the plaintiff’s registered trademark.

Legally acquired defense

Where the goods were legally acquired, and the defendant was not aware of the trademark infringement on the goods it sold and can identify the supplier of such goods.

Others

  • The plaintiff suffers no loss or damages as its trademark has not been used during the preceding three years;
  • the limitation period has passed;
  • the plaintiff’s trademark is invalid; or
  • the plaintiff’s trademark is canceled during a non-use cancellation proceeding.

Remedies

  1. What remedies are available to a successful party in an action for infringement or dilution, etc? What criminal remedies exist?

There are four types of remedies:

  • injunctions: infringers may be ordered to cease infringing activities;
  • fines: in administrative actions, a fine can be imposed on the infringer;
  • damages: in civil litigation, damages can be awarded to the rights holder. China has moved to higher damages and punitive damages in recent years; and
  • confiscation or destruction of infringing goods.

Regarding monetary relief, article 63 of the Trademark Law stipulates the following key points:

  • the amount of compensation for infringement shall be determined based on the right owner’s actual losses; and if not available, then the actual benefits acquired by the infringer; if not available, then based on the anticipated royalties. If the infringement is committed in bad faith with serious circumstances, the damage amount may be more than one time but less than five times the base figure. Compensation shall include reasonable expenses incurred by the right owner in stopping the infringement; and
  • if the above-mentioned base figure cannot be determined, the court may award damages of not more than 5 million yuan according to the circumstances of the infringement.

As for criminal remedies, the punishment for trademark-related criminal offenses is up to three years of imprisonment in serious circumstances. In especially serious circumstances, the punishment could be up to 10 years. It is not common to successfully charge a trademark infringer for a criminal offence due to the threshold on what constitutes ‘serious circumstances’ and ‘especially serious circumstances’.

ADR

  1. Are ADR techniques available, commonly used and enforceable? What are the benefits and risks?

In China, mediation is used in trademark infringement matters and is potentially cheaper than civil litigation.

In litigation, all judges have a duty to inquire into the possibility of a settlement and to assist in that process.

Properly used, this can be a useful tool for foreign parties.

Arbitration is also available, but it is more commonly invoked in contractual disputes.

UPDATE AND TRENDS IN TRADEMARKS IN CHINA

Key developments of the past year

  1. Are there any emerging trends, notable court rulings, or hot topics in the law of trademark infringement or dilution in your jurisdiction?

In January 2023, the China National Intellectual Property Administration (CNIPA) issued a new draft amendment to the Trademark Law of the People’s Republic of China (the Draft) for public consultations. The Draft proposes several significant changes to the current trademark practice with the intent to address bad faith trademark filings and improve the use and protection of trademarks. The proposed amendments include:

  • the requirement for trademark registrants to submit a statement of use periodically after the trademark is registered;
  • the limitation on the repeated filings of the same mark under the same wares or services; and
  • the streamlining of the appeal proceeding for trademark oppositions, etc.

The Draft has not become law at the time of writing and it if does, there will be significant practical changes for foreign trademark owners.

Brand owners may no longer need to keep re-filing trademark applications to wait for the conclusion of the parallel actions against the cited marks. In June 2023, the CNIPA published its interpretations of the Rules of Suspension of Trademark Review Matters, which provide guidance on when the suspension application of trademark proceedings shall or may be approved based on the principle of necessity.

* The information in this chapter was accurate as at August 2023.

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