Reasonable costs incurred in administrative actions may be indemnified in civil suits
Abuse of trademark administrative proceedings constitutes unfair competition
Bad faith filing not yet standalone cause of action in civil suits

In an era in which the significance of intellectual property has been reiterated and elevated to the national strategy level, the Chinese judiciary has been innovatively tackling bad faith trademark filings and reshaping the jurisprudence in this regard.

Reasonable costs incurred in administrative actions may be indemnified in civil suits

On 28 May 2019 the Suzhou Intermediate Court rendered a first-instance decision, affirming that Liangshan Shuihu Tire Company's use of the FULISITONG trademark (Figure 1) trademark on motorcycle and agrimotor tires constituted trademark infringement over two trademarks (Figure 2) owned by Bridgestone Corporation. The Suzhou Intermediate Court ordered the infringer to indemnify the brand owner's damages and cover the reasonable costs incurred in opposing and invalidating the accused infringing trademarks filed in bad faith. The judgment has become effective.

Figure 1: FULISITONG trademark

Figure 2: trademarks owned by Bridgestone Corporation

Prior to the civil lawsuit, Bridgestone Corporation had sought to block the registration of the FULISITONG mark filed by Liangshan Shuihu through:

  • trademark opposition;
  • opposition review; and
  • subsequent administrative proceedings.

The Beijing High Court affirmed that the FULISITONG trademark could not be granted registration due to its similarity with Bridgestone Corporation's trademarks.

In the civil proceeding, the Suzhou Intermediate Court found the Rmb3 million damages claimed by Bridgestone Corporation to be well founded for the following reasons:

  • The infringing trademark had been used for over 10 years.
  • The sales contract that Liangshan Shuihu had submitted during the trademark opposition review administrative proceeding corroborated that the sale of infringing tires yielded more than Rmb3 million in profits.
  • Liangshan Shuihu had exhibited bad faith in piggybacking on the reputation of the plaintiff's registered trademarks.

The defendant continued to use the infringing trademarks after both the Trademark Review and Adjudication Board proceeding and the trademark administrative proceeding confirmed the similarity of the FULISITONG mark with the plaintiff's cited trademark. The Suzhou Intermediate Court, therefore, found that the defendant's ensuing acts constituted bad faith infringement, which warranted punitive damages.

Based on the above, the Suzhou Intermediate Court awarded maximum statutory damages of Rmb3 million and ordered the defendant to cover the plaintiff's reasonable costs (Rmb291,343) incurred in the civil lawsuit and the previous administrative proceedings (both the opposition and the follow-up administrative proceedings).

Abuse of trademark administrative proceedings constitutes unfair competition

On 25 September 2020 the Minhang District Court of Shanghai rendered a judgment finding that the abuse of trademark administrative proceedings constitutes unfair competition (for further details please see "Court rules against trademark squatter").

The German company Brita GmbH registered the trademark BRITA and its Chinese transliteration 碧然德 in 1993 and 2010, respectively, in class 11, for water purification systems. The German company also registered several sub-brands and acquired a certain reputation in the field.

A Chinese company, Shanghai Kangdian Industrial Company registered the trademark DEBRITA in the same class and filed 21 other applications in other classes. Based on these applications, Shanghai Kangdian challenged Brita's registration and use of its own trademarks in various sectors.

It took eight years for Brita to finally obtain the invalidation of the DEBRITA trademarks and put a stop to the harassment caused by Shanghai Kangdian.

Brita and its Chinese subsidiary later jointly initiated a civil proceeding against Shanghai Kangdian before the Minhang District Court.

One of the focal points of the dispute was whether the use of trademark administrative procedures could be considered abusive and malicious, and could thus constitute acts of unfair competition.

The Minhang District Court held that the trademark legal system gives business operators the procedural means to protect their own trademark rights. However, business operators must not use such procedures to pursue illegal purposes.

The Minhang District Court cited article 2 of the Anti-unfair Competition Law, which defines the term "unfair competition" and refers to the conduct of business operators that harm the lawful rights and interests of other business operators and disrupt the social and economic order. The Minhang District Court held that the defendant's malicious pre-emptive registration of trademarks and abuse of trademark administrative procedures had violated the principle of good faith and business ethics and disrupted the order of market competition. Therefore, the defendant's behaviour constituted acts of unfair competition.

Bad faith filing not yet standalone cause of action in civil suits

Is a bad faith trademark filing act justiciable in itself? Maybe not.

In early 2020 a US company, Afton Chemical, which chose to ignore the administrative litigation route altogether, brought a civil litigation against a trademark squatter before the Beijing IP Court, requesting an injunction to stop trademark filings and requesting indemnity of damages. In December 2020 the Beijing IP Court refused to accept Afton's complaint based on the fact that a bad faith filing in itself is not a cause of action in a civil lawsuit. The case was later appealed before the Beijing High Court and is pending hearing.

The Administrative Procedure Law offers a possible route for brand owners to claim monetary damages in administrative litigation.

Article 61.1 of the Administrative Procedure Law provides as follows:

Where, in an administrative action that involves administrative licensing, registration, collection or expropriation or a ruling rendered by an administrative authority over a civil dispute, a party applies for concurrent settlement of relevant civil disputes, the people's court may adjudicate the civil dispute in combination with the administrative dispute.

For instance, where a brand owner contends in an administrative proceeding involving the invalidation of a bad faith trademark registration that the trademark infringement dispute between the brand owner and the bad faith filer be concurrently decided by the court, the court will hear both claims. Unfortunately, it seems that a precedent has failed to materialise in the IP field so far.


Chinese courts are becoming increasingly creative in leveraging monetary means to dissuade bad faith trademark filings. With this in mind, more case law is expected to emerge and a few cases might end up being selected as the guiding cases of the Supreme People's Court and become binding over courts at various levels in China. It would therefore be worthwhile for brand owners to try out new ideas in courts located in more developed areas.

For further information on this topic please contact Yongjian Lei or Wenjun Zhang at Wanhuida Intellectual Property by telephone (+86 10 6892 1000) or email ([email protected] or [email protected]). The Wanhuida Intellectual Property website can be accessed at