Trade Mark Litigation

China

Hylands (Hao Tian) Law Firm Lian Yunze, Yi Wenhui, Connie Zhuang

1. Sources of Law

1.1 What are the principal sources of law and regulation relating to trade marks and trade mark litigation? (Briefly describe the role of international, federal or state laws and relevance of court decisions, list and briefly describe relevant statutes and international treaties).

1.1.1 Types of sources of law

In China, the principal sources of trade mark related law and regulation include:

International treaties;
Laws;
Regulations;
Administrative rules;
Judicial interpretations;
Administrative interpretations; and
Others, such as Local Regulations, Judicial Replies, Administrative Replies, etc.

1.1.2 Relevant sources of law relating to trade marks and trade mark litigation

International treaties
The principal international treaties, to which China is a member or a signatory, include:

the Paris Convention for the Protection of Industrial Property;
the Madrid Agreement Concerning the International Registration of Marks;
the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks;
the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks;
the Agreement on Trade Related Aspects of Intellectual Property Rights; and
the Berne Convention for the Protection of Literary and Artistic Works.

Laws
In China, laws are made and amended by the National People’s Congress or its Standing Committee. The principal substantive and procedural laws relating to trade marks and trade mark litigation include:
• General Principles of the Civil Law of the People’s Republic of China (General Principles of the Civil Law);

Trade Mark Law of the People’s Republic of China (Trade Mark Law);
Criminal Law of the People’s Republic of China (Criminal Law);
Anti-Unfair Competition Law of the People’s Republic of China (Anti-Unfair Competition Law);
Civil Procedure Law of the People’s Republic of China (Civil Procedure Law);
Administrative Procedure Law of the People’s Republic of China;
Criminal Procedure Law of the People’s Republic of China;
Law of Administrative Penalty of the People’s Republic of China.

Regulations
Regulations are made by the State Council of China. The principal regulations relating to trade marks and trade mark litigation include:

Regulations for the Implementation of the Trade Mark Law of the People’s Republic of China;
Regulations on the Administration of Special Signs; and
Regulations on the Protection of Olympic Signs.

Administrative rules
Administrative rules are made by the ministries and commissions under the State Council.
The principal administrative rules relating to trade marks are mainly issued by the State Administration for Industry and Commerce (SAIC), under which there are China Trade Mark Office (CTMO), China Trade Mark Review and Adjudication Board (TRAB), and local Administrative Authorities for Industry and Commerce (AICs) at different levels. The administrative rules aim to clarify specific issues relating to trade mark prosecution, protection and the law enforcement.
The main administrative rules include:

provisional regulations on the recognition and protection of well-known trade marks;
provisional measures for the implementation of the Madrid International Trade Mark Registration;
provisional measures for the registration and administration of collective and certificate trade marks;
rules on trade mark review and adjudication; and
criteria for trade mark examination and review.

Judicial Interpretations
Judicial Interpretations relating to trade marks and trade mark litigation are mainly made and issued by the Supreme People’s Court and the Supreme People’s Procuratorate jointly or separately, and include:

Interpretations of the Supreme People’s Court Concerning the Property of Preservation of Registered Trade Mark Rights (2001);
Interpretations of the Supreme People’s Court Concerning the Jurisdiction and Application of Law in the Trial of Cases of Civil Disputes Arising from Trade Marks (2002);
Interpretations of the Supreme People’s Court Concerning the Application of Law on Stopping the Act of Infringement upon the Registered Trade Mark Right and Preservation of Evidence before Action(2002);
Interpretations of the Supreme People’s Court on Some Issues Concerning the Application of Law for Hearing Civil Trade Mark Disputes (2002);
Interpretations of the Supreme People’s Court and the Supreme People’s Procuratorate Concerning Some Issues on the Specific Application of Law for Handling Criminal Cases of Infringement upon Intellectual Property Rights (2004);
Interpretations of the Supreme People’s Court Concerning Some Issues of the Application of Law on Civil Dispute Cases Arising From Internet Domain Names (2001);
Interpretations of the Supreme People’s Court Concerning Some Issues of the Application of Civil Procedure Law of the People’s Republic of China (1992);
Interpretations of the Supreme People’s Court Concerning Some Issues of the Implementation of Administrative Procedure Law of the People’s Republic of China (2000);
Some Judicial Provisions of the Supreme People’s Court Concerning Evidence of Civil Procedure (2001);
Judicial Provisions of the Supreme People’s Court Concerning Some Issues of Evidence of Administrative Procedure (2002).

Administrative Interpretations
There are still quite a lot of Administrative Interpretations concerning various trade mark issues made by the SAIC in respect of trade mark prosecution, protection and law enforcement.

Others: replies, local regulations, etc
In addition, some local regulations relating to trade mark matters made by local governments, official replies made by the Supreme People’s Court or made by SAIC, or CTMO, or TRAB also play some role in trade mark prosecution, protection and enforcement in China.

1.2 What is the order of priority of the relevant sources, ie which take precedence in the event of a conflict?

In the event of a conflict, the provision of the international treaty prevails over the national laws except where China has announced reservation; and the law in force supersedes the regulations, rules, Judicial Interpretations and Administrative Interpretations.
Judicial Interpretations and Administrative Interpretations are of parallel legal force, but implemented by the Courts and AICs respectively.

2. Court and Administrative System

2.1 Can third parties oppose/request cancellation of a national or supranational (eg Benelux, Madrid Agreement and Protocol, Community Trade Marks) trade mark application/registration in your country? If so, on what grounds? Please briefly describe the opposition/cancellation procedure(s).

2.1.1 Preface

In China, trade mark opposition and cancellation are available to both the national trade mark registration and the Madrid International Trade Mark Registration (Madrid Agreement/Protocol). But the grounds and the qualification of the main body to lodge the opposition and cancellation are different.

2.1.2 Legal grounds and procedures for trade mark opposition

Legal grounds
A third party can oppose a national trade mark application or Madrid International Trade Mark Registration based on any of the following grounds:

A. Prohibited signs and the inherent weakness of a trade mark
Prohibited signs
According to Trade Mark Law, the use of a trade mark which is identical with or similar to, contains or consists of any of the following signs, symbols or devices is prohibited (there are few exceptions):

the State names, national flags, national emblems, military flags of China and foreign states; the name, flag, emblem of international intergovernmental organisations;
the decoration of China, the name of particular venues, or the name or graphs of the symbolic buildings of China;
the official signs, hallmarks indicating control and warranty;
the names or symbols of the Red Cross or the Red Crescent;
discriminative signs, symbols, devices against nationality;
those having the nature of exaggeration and fraud in advertising goods or services;
those detrimental to socialist morals or good customs, or having other unhealthy influences; and
the geographical names of the administrative divisions at or above county level of China as well as the foreign well-known geographical names.

Lacking in distinctiveness, descriptive, functional
The trade mark is the generic goods/service name, device, model or common shape, etc, or directly descriptive of the main features (quality, raw materials, function, usage, weight, quantity, etc) of the goods/service, or lacks of the nature of distinctiveness to be a trade mark, or functional (a three-dimensional sign).

B. Violating well-known trade mark right
Unregistered well-known trade mark on identical/similar goods
The trade mark, which is applied for registration on the same or similar goods/service, is a reproduction, imitation, or translation of another party’s unregistered well-known trade mark in China, and it is liable to create confusion.

Registered well-known trade mark on dissimilar goods
The trade mark, which is applied for registration on dissimilar goods/service, is a reproduction, imitation, or translation of another party’s registered well-known trade mark in China, and it may mislead the public and harm the interests of the registrant of the well-known trade mark.

C. Bad faith application of agent or representative
The agent or representative of a person who is the owner of the trade mark, without authorisation of such owner, applies for registration of the owner’s trade mark in his own name.

D. Misleading geographic indication
The trade mark contains or consists of a geographical indication with respect to goods not originating in the place indicated and misleads the public as to the true place of origin.

E. Violating the ‘first-to-file’ principle
The trade mark is the same or similar to another’s prior filed or registered trade mark, or prior used trade mark filed on the same day, and is used on the same and similar goods/service.

F. Infringing upon another party’s existing prior rights
The trade mark infringes upon another party’s existing prior rights, such as copyright, trade name, design, individual’s name right, portrait right, right of name, packaging or decoration peculiar to a well-known goods, etc.

G. Preemptive bad faith application
A trade mark has already been in prior use by another party, and has acquired certain influence, while, the applicant applies for registration of such trade mark in his/its own name by unfair means.

H. Violating the basic principle of ‘honesty and credibility’
The trade mark is filed for registration by fraud or other unfair means, the registration of which violates the basic principle of ‘honesty and credibility’ of General Principles of the Civil Law.

Procedures
• Any party may lodge opposition against a national trade mark within three months of the trade mark being published in the Trade Mark Gazette of CTMO. CTMO will notify the applicant of the opposed trade mark to make defence within 30 days since his receipt of such notification, and then make the decision on the opposition.
He may also file an opposition to CTMO against a Madrid International Trade Mark Registration within three months as of the first day of the next month after the trade mark is published in the WIPO (World Intellectual Property Organization) Gazette of International Trade Marks.

If any party is dissatisfied with CTMO’s decision, he may, within 15 days from the receipt of CTMO’s decision, appeal to TRAB for review. TRAB will also notify the opposer to make a defence within 30 days of his receipt of such notification, and then make the decision on the opposition.
If any party to the opposition is dissatisfied with TRAB’s decision on the opposition, he may, within 30 days from the receipt of TRAB’s decision, appeal to Beijing No. 1 Intermediate People’s Court, who will make the first instance judgment on the opposition.
If any party to the opposition is dissatisfied with the first instance judgment, he may, within 15 days (if he is a national of China), or 30 days (if he is a foreigner) from the receipt of the judgment, appeal to Beijing High People’s Court, who will make the second instance judgment, which is final.

2.1.3 Legal grounds and procedures for cancellation of a registered trade mark

A. The same legal grounds for opposition in trade mark dispute
Trade mark owner and interested party
After a trade mark is registered, within five years of its registration, the trade mark owner or interested party (eg the licensee) may file a dispute to TRAB by citing any of the same legal grounds for opposition against a trade mark as mentioned in 2.1.2 to cancel it.
If the owner’s trade mark is well known and the disputed trade mark is filed in bad faith; or the trade mark has inherent weakness for registration, or the registration of the trade mark is obtained by fraud and unfair means and violates the general principle of ‘honesty and credibility’, the aforesaid time limitation of five years will not be applied to the cancellation of such trade mark.

A third irrelevant party
For an irrelevant third party, he may request cancellation of a registered trade mark to TRAB on the basis of any of the following legal grounds only:

the trade mark is a prohibited sign or has inherent weakness for registration;
the trade mark was registered fraudulently or by any other unfair means and violates the principle of ‘honesty and credibility’.

In case of the above, CTMO may also decide to cancel a registered trade mark.

Procedures
A trade mark cancellation based on any of the above legal grounds, either requested by the trade mark owner, or the interested party, or an irrelevant third party, should be filed to TRAB.
If any party is dissatisfied with TRAB’s decision, he may appeal to Beijing No. 1 Intermediate People’s Court, and further appeal to Beijing High People’s Court, who will make final judgment. The relevant procedures are almost the same as the corresponding procedures for opposition.

B. Other legal grounds for cancellation and relevant procedures
Besides the above-mentioned grounds, the following grounds for trade mark cancellation are also available according to Trade Mark Law and its Regulations for Implementation.

Use requirements
If a registered trade mark has not been in use for three consecutive years, any party may file a request to CTMO for cancellation of such registered trade mark.
CTMO will notify the registrant of the trade mark to furnish use evidence from the past three consecutive years within two months of receipt of such notification, and then make the decision.
In addition, if the trade mark is not in standard use or was unilaterally assigned without CTMO’s approval, or if a registered trade mark is used on goods of poor quality, so that consumers are deceived or harmed, CTMO may decide to cancel such trade mark registration.
If any party is dissatisfied with CTMO’s decision, he may also appeal to TRAB, Beijing No. 1 Intermediate People’s Court, and then to Beijing High People’s Court in that order.

Non-existence of the registrant and non-timely transfer
If a registered mark is not assigned or transferred to someone else within one year of the death of the trade mark registrant, any party may file a request to CTMO for removal of the trade mark.

2.2 In which courts are trade marks enforced? Are they specialised trade marks courts? If not, what level of expertise can a trade mark holder expect from the courts?

In China, no special IP courts have been set up to handle IP related disputes. However, in the court with the competent jurisdiction, the IP tribunal is set up to handle IP cases exclusively.
According to the relevant Judicial Interpretations of the Supreme People’s Court, the first instance trade mark related civil case should be handled by the court at or above the intermediate level, and only a small number of qualified grass-roots courts in some relevant big cities designated by the High People’s Courts at provincial level with the approval of the Supreme People’s Court have the right to handle such cases. For any decision made by TRAB, the appeal may only be filed to Beijing No. 1 Intermediate People’s Court, and further to Beijing High People’s Court.
Therefore, a relatively high expertise can be expected from the court when handling trade mark litigation.

2.3 To what extent are courts willing to consider, or are bound by, the opinions of other national or foreign courts that have handed down decisions in similar cases?

Prior court decisions have no binding force on the courts as the Chinese legal system is based on codified law, not common law. However, in practice, some critical decisions made by the Supreme People’s Court have functioned as guidelines to the lower courts in handling the same or similar cases. In this regard, such decisions, to some extent, have some binding force on the courts.

2.4 Do the courts deal with infringement and invalidity simultaneously? Or must invalidity actions be brought in separate proceedings? If so, before which court or national or supranational government agency shall they be brought (eg the national Trade Mark Office or the OHIM in Alicante)?

Infringement and invalidity are two separate proceedings. When infringement occurs, the interested party can sue before the court with the competent jurisdiction directly.
However, to invalidate a registered trade mark, the request for invalidation shall be filed firstly to CTMO or TRAB according to the law. If the interested party does not satisfy the decision made by CTMO, he may apply for a review before TRAB. If the interested party does not satisfy the decision made by TRAB, he may sue before the court with the competent jurisdiction.

2.5 Who can represent parties before the courts handling trade mark litigation and/or the national or supranational government agency dealing with trade mark validity issues?

Agents for trade mark litigation
In China, lawyers, trade mark agents, or even other common Chinese individuals with full capacity of civil rights and civil conducts, under the permission of courts, may represent parties in a trade mark lawsuit before the court.
Foreign individuals or legal entities, if entrusting lawyers to represent them in trade mark litigation before Chinese courts, must instruct Chinese lawyers. Foreign individuals, foreign lawyers, officials of the foreign countries’ Embassies or Consular posts in China, may also be common agents of citizens in trade mark litigation.

Agents for trade mark validity issues
The Chinese individuals or entities and the foreign individuals or entities with habitual residence or premise of business in China can directly deal with trade mark validity relevant affairs before CTMO or TRAB without entrusting a professional agent.
Otherwise, only trade mark agents, recorded before CTMO, are competent to represent parties to deal with trade mark validity relevant cases before CTMO or TRAB.

2.6 What is the language of the proceedings? Is there a choice of a language?

Chinese is the statutory language in the proceedings and there is no other choice.

3. Substantive Law

3.1 To what extent are unregistered trade marks protected under your country’s laws?

In principle, the exclusive right to use a trade mark is acquired through registration in China. However, unregistered trade mark indeed may also acquire some protection as follows in China:

The right of prior used trade mark with certain influence
In China, if a trade mark has already been used and obtained certain influence in the market, any other party cannot copy or imitate the same mark and apply for registration. Otherwise, the prior user of the trade mark may oppose the trade mark application before CTMO or cancel its registration before TRAB by raising a dispute.

Unregistered well-known trade mark right
If an unregistered trade mark is a well-known trade mark in China, any other party cannot reproduce, imitate or translate such trade mark and apply for registration or use it on the same or similar goods/service.
The owner of the unregistered trade mark may oppose or cancel the aforesaid trade mark application/registration, or request local AICs to prevent any unauthorised trade mark use by other parties on the same or similar goods/services.
As to the aforesaid unauthorised trade mark used by other parties, the owner may bring an infringement case before the court with competent jurisdiction requesting the stop of infringement. However, as the well-known trade mark is not registered, the owner cannot claim the damage compensation.
Right of continuous use of service mark
According to Trade Mark Law, service marks continuously in use to 1 July 1993, which are identical or similar to any registered service marks of another person for the same or similar services, may continue to be used, which is not deemed as the trade mark infringement.

3.2 How is trade mark infringement assessed? Does protection extend to translations or to conceptually identical but graphically different trade marks?

To establish trade mark infringement, it must be proved that: (1) the trade mark right of the infringee is valid in China; and (2) the infringing act exists. The trade mark infringement deeds as prescribed by Trade Mark Law, Regulations for the Implementation of China Trade Mark and the Judicial Interpretations include:

using a trade mark that is identical with or similar to a registered trade mark in respect of the same or similar goods without authorisation from the trade mark registrant;
selling goods that infringe the exclusive right to use a registered trade mark;
counterfeiting, or making, without authorisation, representations of a registered trade mark of another person, or selling such representations of a registered trade mark as were counterfeited, or made without authorisation;
replacing another party’s registered trade mark, without authorisation, and selling goods bearing such a replaced trade mark;
using any signs which are identical with or similar to another person’s registered trade mark as the name of the goods or decoration of the goods on the same or similar goods, thus misleading the public;
intentionally providing facilities such as storage, transport, mailing, concealing, etc for the purpose of infringing another person’s exclusive right to use a registered trade mark;
using the trade name that is identical or similar to another’s registered trade mark in a distinctive manner on identical or similar goods, and thus causing possible confusion among the public;
copying, imitating, translating of another’s well-known, registered trade mark or its dominant part to be used as a trade mark on non-similar or non-identical goods and thus mislead consumers and possibly causing damage to the interest of the well-known trade mark owner; and
registering a domain name that is identical with or similar to another’s registered trade mark, and conducting e-commerce in the goods through this domain name, which is likely to cause confusion among public.

As Trade Mark Law prescribes that a trade mark is only a visual sign, therefore, it’s hard to extend the protection of a registered trade mark to the translations or to conceptually identical but graphically different trade marks unless the confusion or likelihood of confusion or misleading among the relevant public occurs.

3.3 Are there other causes of action for trade marks (eg dilution)?

Causes of action
In China, in addition to trade mark infringement, other causes of action for trade marks include:

administrative cases in trade mark prosecution, trade mark cancellation/invalidation and trade mark law enforcement;
trade mark ownership dispute;
trade mark related contractual dispute (including assignment/licence).

Dilution of trade mark
Trade mark dilution is not a cause of action in China, because the concept of trade mark dilution is not officially accepted in China’s trade mark related legislation.

3.4 Can a trade mark be enforced against a domain name, a trade name, a pseudonym or other distinctive signs?

In China, a registered trade mark or unregistered well-known trade mark can be enforced against a domain name, a trade name and other distinctive signs on the grounds of trade mark infringement or unfair competition.
In practice, it’s hard to enforce a registered trade mark against a pseudonym as the trade mark and the pseudonym have different functions and are used in different ways. However, if a pseudonym has acquired distinctiveness through commercial use, which results in a civil right in the name of an individual operator as prescribed by Anti-unfair Competition Law, the prior registered trade mark may be used against the pseudonym. In addition, the pseudonym with acquired distinctiveness can be enforced to oppose or invalidate a trade mark.

3.5 On what grounds can a trade mark be invalidated?

A registered trade mark can be invalidated based on the following grounds:

being opposed or cancelled on the grounds mentioned in 2.1.3;
being removed for non-renewal or renewal beyond the required time limit (including the grace period of six months); or
the registrant’s application for removal.

3.6 Must use requirements be satisfied to maintain the trade mark registration? If so, is there any definition of what constitutes use?

In China, to maintain a trade mark registration, the use requirements shall be satisfied, otherwise the trade mark registration is vulnerable to being cancelled. The aforesaid use requirements include:

the trade mark has not been in use for three consecutive years;
the trade mark is in standard use and has not been unilaterally assigned or modified without the approval of CTMO;
the goods/services marked by the registered trade mark are of good quality.

As defined in article 3 of Regulations for the Implementation of Trade Mark Law, the use of a trade mark shall include the use of the trade mark on goods, packages or containers of the goods or in trading documents, and the use of the trade mark in advertising, exhibition or any other business activities.

3.7 What other defences, if any, are available to an alleged infringer? Does your country’s law provide for prior user rights?

In China, besides arguing the differences between the trade marks and their designated goods/services, the following defences are still available to an alleged infringer:

the claimed registered trade mark has become invalid for various reasons, such as it’s not been renewed in time, or has been finally decided to be cancelled because of non-use or violating other’s right, etc;
the claimed registered trade mark is improperly registered or was registered in bad faith and the defendant has applied for cancellation of it;
the alleged infringer’s acts constitute fair use, which cannot cause the relevant public’s confusion as well. Normally, the following may be viewed as fair uses:

– using the generic name, device, model, or term etc, which is a part of another’s registered trade mark;
– using signs/symbols which directly describe the nature, usage, quality, main materials, types, or other features of the goods/services, which is a part of another’s registered trade mark;
– using their own trade name in a lawful way;
– using the geographical name where the alleged infringer is located.
In addition, if a distributor of the infringing goods (the infringer) has no default, he shall not bear the liability of compensation, which constitutes a good excuse in defence.
Generally speaking, China has no legal provisions on the prior user’s rights, except the use of unregistered service marks mentioned in 3.1.

3.8 To what extent can enforcement of a trade mark expose the trade mark holder to liability for an antitrust violation?

In China, Antitrust Law entered into force on 1 August 2007. Article 55 of Antitrust Law provides this law shall not apply to the conduct of business operators to exercise their intellectual property rights in accordance with the laws and relevant administrative regulations on intellectual property rights; however, this law shall apply to the conduct of business operators to eliminate or restrict market competition by abusing their intellectual property rights.

3.9 Can a court only partially invalidate a trade mark?

A trade mark can be partially invalidated in China. However, the court has no right to either wholly or partially invalidate a trade mark directly. Only CTMO and TRAB have the right to directly invalidate a trade mark either partially or wholly. If the interested party does not satisfy the decision of partial/whole invalidation of a trade mark made by TRAB and appeals to the court it then has the right to make judgment to maintain or cancel the foregoing decision, ie to indirectly invalidate a trade mark partially/wholly.

3.10 Is it possible to amend a registered trade mark during a lawsuit?

In China, a registered trade mark cannot be amended during a lawsuit. If the sign of a registered trade mark needs to be altered, a new trade mark registration shall be applied for.

3.11 Are there any grounds on which an otherwise valid trade mark can be deemed unenforceable, owing to misconduct by the trade mark holder, or for some other reason (eg expiry of time limit)?

A valid trade mark that becomes unenforceable is mainly due to the following reasons:

a registered trade mark is diluted as a generic name of commodity, a standard model or other common description; or
the name and/or address of the registrant has changed without approval from CTMO and the registrant cannot prove it is the trade mark owner when infringement occurs;
a registered trade mark has not been in use for three consecutive years and cancellation is duly applied for when infringement occurs; or
the trade mark or a part of it has no inherent distinctiveness, or consists of directly descriptive words, or generic goods name/device/shape or other term, or functional, or is a geographical name, even if registered, is not enforceable against other’s fair uses of such words.

3.12 Can a trade mark holder bring a lawsuit claiming both trade mark infringement and unfair competition for the same set of facts? Is it possible to bring parallel unfair competition proceedings, whether or not the trade mark is registered?

In China, if the facts fall into the scope of trade mark infringement as prescribed in Trade Mark Law, no parallel unfair competition proceedings can be instituted. However, if such facts contain the unfair competition deeds as well, which cannot be settled effectively under Trade Mark Law, the infringee may bring a parallel unfair competition case in addition to the trade mark infringement case simultaneously.
As to an unregistered trade mark, if it is not well known yet, its owner cannot bring an infringement lawsuit.

4. Parties to Litigation

4.1 Who can sue for trade mark infringement (trade mark holder, exclusive licensee, non-exclusive licensee, or distributor)? Does a licensee need to be registered to sue?

The trade mark registrant or the interested party, including the licensee, the successor or inheritor of the registrant, has the right to sue for trade mark infringement.
In China, it is not necessary for a licensee to be registered to bring a lawsuit.
The exclusive licensee is entitled to take action independently; the sole licensee has the right of action together with the trade mark registrant, and can also take action independently, if the trade mark registrant does not take action; the non-exclusive licensee has the dependant right of action, ie the non-exclusive licensee, with the authorisation of the trade mark registrant, can bring a lawsuit.

4.2 Under what conditions, if any, can an alleged infringer bring a lawsuit to obtain a declaratory judgment on non-infringement?

There is no special prescription for an alleged infringer to bring a lawsuit to obtain declaratory judgment on non-infringement in China’s trade mark related laws and regulations.
In practice, it is commonly found that the alleged infringer may bring a declaration of non-infringement before the court when the trade mark owner continuously sends warning letters to the alleged infringer accusing the alleged infringer’s use of being illegal, and threatens to take legal action, while, actually the owner does not take such action at all.

4.3 Who can be sued for trade mark infringement? Can the company directors be sued personally? Under what conditions, if any, can someone be sued for inducing or contributing to trade mark infringement by someone else?

In China, any individual or entity conducting the infringing acts mentioned in 3.2 can be sued for trade mark infringement. However, only when the trade mark related crime is committed, the director of a company who bears direct responsibility for such infringement can be sued for trade mark infringement crime.
In Regulations for the Implementation of Trade Mark Law, the contributing acts of ‘intentionally providing facilities such as storage, transport, mailing, concealing, etc for the purpose of infringing another person’s exclusive right to use a registered trade mark’ constitute trade mark infringement.
There is no express provision concerning inducing behaviour to trade mark infringement in China’s trade mark related laws and regulations. However, in Criminal Law, the person inducing others to commit trade mark crime, as a conspiracy, may also be judged to bear criminal liabilities.

4.4 Is it possible to add or subtract parties during litigation?

As per the request of the plaintiff and with the approval of the court, parties can be added or subtracted during litigation. If a party who should participate in a joint action fails to do so, the court shall notify and require him to participate.

5. Enforcement Options

5.1 What options are open to a trade mark holder when seeking to enforce its rights in your country?

In China, the Dual System of Administrative Protection and Judicial Protection of Trade Mark Right is an effective means with Chinese characteristics to protect the trade mark right. When an infringement occurs, the trade mark registrant or the interested party may apply for either the legal proceedings or administrative actions.

Administrative actions
Administrative action is a quick and cost-saving means to stop trade mark infringement.
When the infringement occurs, the trade mark holder can file a complaint before the AIC with the competent authority, such as in the place where the infringing goods are produced, distributed, stored, transported and etc, for a raid action against the infringer to stop the infringement. However, no power is endowed to the AIC to determine compensation.
If the infringement is serious and constitutes a crime, the local AIC will transfer the case to local Public Security Bureau (PSB) for further investigation.
In addition, the trade mark holder may apply for border measures against the infringer.

Legal proceedings
The trade mark holder or the interested party may institute legal proceedings before the court requesting cessation of the infringement and claiming compensation. To effectively stop the infringement, the preliminary injunction may be applied for by the plaintiff before the initiation of the legal proceedings.
If any party does not satisfy the judgment made by the first instance, it may appeal to a higher court.

5.2 Are criminal proceedings available? If so, what are the sanctions?

The criminal liability of the infringer can be prosecuted if the trade mark infringement constitutes a crime. PSB is responsible for the investigation of trade mark related crimes, and the People’s Procuratorate is responsible for public prosecution. In addition, a private criminal prosecution by the trade mark holder or an interested party is also available.
In China, there are three kinds of trade mark related crimes, ie the crime of counterfeiting registered trade marks, the crime of selling commodities bearing counterfeit trade marks and the crime of illegally manufacturing signs of registered trade marks or selling the illegally manufactured signs of registered trade marks.
Article 213 of the Criminal Law provides that for the crime of counterfeiting a registered trade mark, if the circumstance is serious, the criminal infringer shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention and concurrently or independently, to a fine; if the circumstance is especially serious, the criminal infringer shall be sentenced to fixed-term imprisonment of not less than three years and not more than seven years and concurrently to a fine.
Article 214 of the Criminal Law provides that for the crime of selling commodities bearing counterfeit trade marks, if the sales volume is relatively large, the criminal infringer shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention and concurrently or independently, to a fine; if the sales volume is large, the criminal infringer shall be sentenced to fixed-term imprisonment of not less than three years and not more than seven years and concurrently to a fine.
Article 215 of the Criminal Law provides that for the crime of illegally manufacturing signs of registered trade marks or selling the illegally manufactured signs of registered trade marks, if the circumstance is serious, the criminal infringer shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention or public surveillance and concurrently or independently, to a fine; if the circumstance is especially serious, the criminal infringer shall be sentenced to fixed-term imprisonment of not less than three years and not more than seven years and concurrently to a fine.

5.3 Are border measures available?

Border measures are available in China and the Customs authorities are empowered to detain the suspected infringing goods and prevent them from being either imported or exported.
In practice, Customs provides protection either under the request of the trade mark owner whose exclusive right to use the registered trade mark is not recorded before the General Administration of Customs or on its own initiative on the trade mark owner whose exclusive right to use the registered trade mark has been recorded before the General Administration of Customs.

5.4 To what extent are courts willing to grant cross-border or extra-territorial injunctions?

Chinese courts do not grant any cross-border or extra-territorial injunctions.

5.5 To what extent do courts recognise the blocking effect of ‘torpedo’ actions abroad?

Chinese courts do not recognise torpedo actions in respect of trade mark matters.

5.6 To what extent are alternative dispute resolution (ADR) methods (such as arbitration or mediation) available to resolve trade mark disputes? How widespread are ADR methods and in which sectors? If arbitration is available to assess invalidity, will your Trade Mark Office recognise and execute an arbitral award declaring a trade mark invalid?

ADR methods such as arbitration or mediation are available in China to resolve some trade mark disputes.
In practice, arbitration plays an important role in solving contract-related trade mark disputes. Mediation is also an effective and extensively used means to settle all kinds of trade mark disputes. In a raid action, AICs may mediate in settling the amount of damages in handling the case as per the request of the concerned party (parties). And in litigation and arbitration, the opportunity to mediate is available. In the trade mark review procedure, TRAB also has the right to mediate a dispute in trade mark prosecution and cancellation.
However, ADR is not available to assess invalidity of a trade mark as only CTMO, TRAB and the court have the right to determine whether a trade mark is valid or invalid.

6. Procedure in Civil Courts

6.1 What is the format of trade mark infringement proceedings?

Trade mark infringement proceedings are regulated by Civil Procedure Law, which basically includes the case-filing, acceptance of the case, submitting defence, exchange of evidence, hearing, ruling and execution. In the court hearing, the cross-examination of evidence and witnesses will be held.

6.2 Are disputed issues decided by a judge or a jury?

There is no jury system in China and a court decision is made by the collegial panel or the judicial trial committee of the court when the case is very important or complicated. People’s assessors can join the court as members of the collegial panel and have equal rights with the judge during the period of their services.

6.3 To what extent are documents, affidavits, witnesses and/or (court-appointed or private) experts used? Is it possible to cross-examine witnesses?

Legitimately-obtained documents, affidavits and witnesses are all acceptable forms of evidence as prescribed in Civil Procedure Law.
In some complicated cases, expert witnesses are used to determine the trade mark infringement and the value of a trade mark. The witnesses shall be cross-examined.

6.4 To what extent is survey evidence used (eg to support acquired distinctiveness, likelihood of confusion, evidence)? Who decides which consumers are questioned in the survey (eg the court, court expert)? What level of cost should one expect to incur to carry out a survey? Are these costs recoverable from the losing party?

Currently, no mature system of survey evidence has been established in China. Therefore, it is seldom that survey evidence is accepted by the court and no authoritative organ has been appointed to do the survey.
In practice, the court will not conduct the survey and the professional investigation agency who conducts it will decide which consumers are to be questioned.
In a trade mark infringement case, if the survey evidence submitted by the plaintiff is deemed necessary and accepted by the court; and the related costs are deemed to be part of the reasonable expenditure of stopping infringement, and the plaintiff is the winner, the costs may be ruled to be borne by the defendant.

6.5 Is evidence obtained for criminal proceedings admissible in civil proceedings, and vice versa?

Evidence obtained in criminal proceedings can be applied directly in the related civil case unless the other party has concrete evidence to overthrow such evidence, and vice versa.

6.6 To what extent is pre-trial discovery permitted? If it is permitted, how is discovery conducted? If it is not permitted, what other, if any, mechanisms are available for obtaining evidence from an adverse party or from third parties?

There is no pre-trial discovery in China. The exchange of evidence and cross-examination in court are enough to make sure that each party has the chance to study the evidence raised by others.

6.7 What level of proof is required for establishing infringement or invalidity?

Generally, to establish trade mark infringement, the related evidence shall prove that: (1) the trade mark right is valid; and (2) the suspected infringing acts exist.
Generally, to invalidate a trade mark, evidence shall be provided to prove the facts as mentioned in 2.1 or 3.5 above.
However, to invalidate a trade mark on the grounds of non-use for three consecutive years, no evidence need be offered by the party who applies for the cancellation. On the contrary, the evidence to prove the use of the registered trade mark shall be furnished by the trade mark registrant.

6.8 How long do trade mark infringement proceedings typically last? Is it possible to expedite this process?

According to Civil Procedure Law, the first instance of a trade mark infringement case will be concluded in six months after the case is accepted by the court, and the second instance will be concluded in three months after the appeal is accepted by the court. However, no time limit for a civil case involving foreign elements is set in Civil Procedure Law.
In practice, if the foreigner can prepare all the legal documents and the evidence in a timely fashion, the case involving foreign elements will be concluded very quickly.
As the time limits set by Civil Procedure Law are very reasonable, no express prescription on how to expedite the litigation process is stipulated.

6.9 What options, if any, are available to a defendant seeking to delay the proceedings?

There is no prescription on the suspension of a trade mark infringement case in the relevant Judicial Interpretations.
In practice, when an attack on the validity of a trade mark right is raised and the relevant formalities have been fulfilled before the expiry of the time limit for responding, the court may suspend the case. However, it is entirely at the sole discretion of the court.

6.10 Under what conditions, if any, can proceedings be stayed? How can a plaintiff counter delaying tactics of defendant?

According to Civil Procedure Law, a case shall be suspended on the conditions that:

one of the parties dies and it is necessary to wait for the heir or heiress to make clear whether they want to participate or not in the proceedings;
one of the parties has lost the capacity to engage in litigation and his agent has not been designated yet;
the legal person or any other organisation who is one of the parties has dissolved, and the successor to its rights and obligations has not been determined yet; or
one of the parties is unable to participate in the proceedings for reasons of force majeure.

As to other conditions for delaying proceedings, it is entirely at the discretion of the court.
As the decision to suspend a case cannot be appealed, if the decision is made by the court the plaintiff has no means to counter it.

7. Final Remedies

7.1 What remedies are available against a trade mark infringer (final injunction, delivery up or destruction of infringing goods, publication of the decision, recall-order, monetary remedies, etc)?

As mentioned before, there are two options (administrative actions and legal proceedings) whereby an infringee can enforce his rights against an infringer.
Administrative actions can provide the following remedies:

rder the infringer to immediately stop the infringing act;
confiscate and destroy the infringing goods and any instruments specifically used to manufacture the infringing goods and counterfeit representations of the registered trade mark; and
impose a fine.

Aside from the above, remedies in legal proceedings also include compensation.

7.2 To what extent it is possible to obtain a final injunction against future infringement, is it effective against the infringer’s suppliers or customers?

In China, there is no final injunction. However, the remedy of ‘cessation of infringement’ adopted by the court in its judgment will, to some extent, refer to stopping infringement permanently. But the trade mark holder or the interested party shall have to bring another case when the future infringement occurs.
Generally, a judgment against infringement has no effectiveness against the infringer’s suppliers or customers.

7.3 What monetary remedies are available against a trade mark infringer (reasonable royalty, lost profits, account of profits, or some other basis)? Are punitive damages available? If so, under what conditions?

In civil procedure, a full compensation principle rather than the punitive compensation is adopted in China.
Based on Trade Mark Law and the relevant Judicial Interpretations, there are three methods of calculating compensation, ie, the monetary losses suffered by the infringee, the profits of the infringer during the period of the infringement and the statutory compensation. And the infringee has the right to choose either the monetary losses of the infringee or the profits of the infringer as the compensation in legal proceedings.
If such losses or profits are hard to determine, statutory compensation will be adopted to determine the quantum of the compensation with a maximum of RMB500,000 (about €50,000).

8. Preliminary Relief

8.1 Is preliminary relief available? If so, what preliminary measures are available (eg preliminary injunction) and under what conditions?

Pre-trial measures are available in China including preliminary injunction, pre-trial evidence preservation and pre-trial preservation of property.
According to trade mark law, where a trade mark registrant or any interested party submits evidence proving that another party is engaged in or will soon engage in actions that infringe upon the registered trade mark right, and that, unless the illegal behaviour of another party is stopped promptly, it will cause irreparable damage to the legitimate rights and interests of the registrant or the interested party, before filing a lawsuit, preliminary relief will be applied to the court by the registrant or the interested party.
The pre-trial evidence preservation and the pre-trial preservation of property are the same as those prescribed in Civil Procedure Law.

8.2 Is ex parte relief available, where defendant is given no notice at all? If so, under what conditions?

In China, most preliminary relief is ex parte. However, the court must notify the respondent within five days as of the date of the order being issued.

8.3 Is plaintiff entitled to ask for an order that defendant’s premises are searched and a description of the infringing goods (and the accounting relating thereto) is made in order to establish proof of infringement (saisie-contrefacon)? If not, what other mechanisms, if any, are available for seizing and preserving evidence for trial?

In China, the plaintiff is entitled to request the court to collect evidence and may have a chance to obtain such order from the court.
In addition, in the pre-trial evidence preservation, the court may order measures that include searching the defendant’s premises, checking and detaining the accounting books relating to infringement, etc.
However, it is in the court’s discretion to issue such order. In practice, the court is very prudent in issuing such an order or taking the related measures.
In addition, such measures will be taken by the AIC in a raid action.

8.4 Can the defendant put the validity of a trade mark at issue in preliminary injunction proceedings?

If possible, the defendant always defends itself by challenging the validity of a trade mark at issue in legal proceedings including in preliminary injunction proceedings.
As we mentioned in 8.2, most preliminary relief is ex parte, therefore, in the determination of the preliminary injunction, the defendant seldom has the chance to put the validity of a trade mark at issue. In addition, the prescribed time limit of 48 hours for the court to make a decision also makes it hard for the defendant to challenge the validity of the trade mark. However, in the reconsideration procedure, such issue will often be raised by the defendant.

8.5 What is the format of preliminary injunction proceedings?

The format of the preliminary injunction proceedings is as follows:

the trade mark registrant or the interested party files a written application before the court with the competent jurisdiction and offers the guarantee;
if necessary, the court makes inquiries of the applicant and/or the respondent for verification of facts;
upon examination, the court will decide whether the application is approved or not within 48 hours after receiving it – if the application is approved, the court will take action immediately;
the court must inform the respondent within five days after the application is approved; and
the party who is not satisfied with the order made by the court may apply for reconsideration within 10 days of the receipt date of the order. However, the execution of the order will continue during the reconsideration.

8.6 To what extent are documents, affidavits, witnesses, survey evidence, and/or (court-appointed or private) experts used in preliminary injunction proceedings?

Legitimately obtained documents, affidavits and witnesses are acceptable forms of evidence as prescribed in the Civil Procedure Law and can be used in preliminary injunction proceedings.
Due to the urgency of the proceedings, experts are not normally required.

8.7 What level of proof is required for establishing infringement or invalidity in preliminary injunction proceedings?

As mentioned in 6.7, the evidence submitted by the plaintiff in the preliminary injunction proceedings shall prove the establishment of trade mark infringement.
Though the related Judicial Interpretations only prescribe that preliminary evidence need be furnished when applying for the preliminary injunction, in practice, it’s better to provide concrete evidence to confirm the establishment of trade mark infringement because: (1) the court is cautious when taking such measures; and (2) the defendant has the chance to defend itself in the reconsideration procedure which may result in the removal of the preliminary injunction.

8.8 How long do preliminary injunction proceedings typically last?

Normally, a preliminary injunction will be effective until the case is concluded.
The court may also fix a specific time limit for the preliminary injunction proceedings according to the circumstances of the case; at the expiration of the time limit, the court may make adjudication to continue the preliminary injunction proceedings at the request of the interested party or at its own discretion

8.9 Where a preliminary injunction is granted, is it necessary to start main proceedings to confirm the preliminary injunction?

As mentioned in 8.1, litigation must be filed 15 days from the date when such measures are taken to maintain the preliminary injunction. Otherwise, the preliminary injunction will be removed and the applicant has to pay to the respondent the compensatory damages caused by the preliminary injunction.

9. Appeal Procedure

9.1 What avenues of appeal are available for a defeated party in main proceedings or preliminary injunction proceedings? Under what conditions?

In the main proceedings, any party who is not satisfied with the judgment made in the first instance may appeal to the court at a higher level within the prescribed time limit from the date of receipt of the judgment (ie 15 days as for a national and 30 days for a foreigner). Otherwise, the judgment will enter into force.
In the preliminary injunction proceedings, any party who is not satisfied with the order made by the court may apply for reconsideration before the same court within 10 days of the receipt of the order.

9.2 How long do appeal proceedings typically last?

As mentioned in 6.8, the second instance should be concluded with three months. However, it may be extended under prescribed circumstances. For a case involving foreign elements, there is no time limit.

10. Litigation Costs

10.1 What level of cost should one expect to incur to take a case through to a first instance decision, preliminary injunction proceedings and/or appeal proceedings?

The costs include the litigation fee and the attorney fee.
For an administrative case, the court fee is RMB 100 (about €10).
For a civil case, the court fee for the first instance legal proceedings will be charged based on the amount of damages or the value of the object. For a civil case without damages claims, the court fee will be RMB 500 or RMB 1000 (about €50 or 100). And the court fee in the first instance is the same as that of the second instance.
The court fee for preliminary injunction shall also be charged according to the value of the object. However, the maximum charges will be RMB 5000 (about €500).
The attorney’s fee can be charged on different bases, including a fixed fee, charges on an hourly basis and a contingency fee.

10.2 Are costs recoverable from the losing party?

Reasonable expenses to stop the infringement, including the investigation and the court fee, can be partly or wholly recovered from the losing party.

11. Forthcoming legislation

11.1 What are the important developing and emerging trends in your country’s trade mark law?

According to relevant resources, the Trade Mark Law will be amended soon to keep up with rapid developments in the trade mark field. The amendments mainly aim to strengthen trade mark protection, speed up the trade mark registration process and construct a better framework for trade mark matters within the law.

11.2 To the extent it relates to trade mark enforcement, please outline any major trade mark legislation in the pipeline.

As mentioned above, Trade Mark Law will strengthen the trade mark enforcement either in trade mark prosecution or in trade mark litigation.

12. Useful references

12.1 Please identify any useful works of reference relating to trade mark law and trade mark litigation in your country, including useful websites.

For latest IP information, please see www.chinaiprlaw.cn, www.saic.gov.cn, www.sipo.gov.cn, www.court.gov.cn and other related websites.
For IP judgments please see http://ipr.chinacourt.org.
In addition, there are many Collections of Law compiled by different organs relating to trade mark matters.