Enforcement

Trademark enforcement proceedings

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 specialised courts or other tribunals? Is there any provision in the criminal law regarding trademark infringement or an equivalent offence?

In China, there are generally three routes by which to enforce the rights of registered trademarks against infringement or dilutive usage: administrative measures, civil lawsuit and criminal charge. Specifically, the administrative measures may include a customs injunction imposed by the customs office, as well as a fight against trademark infringement as executed by the market supervision comprehensive enforcement team under the supervision of the State Intellectual Property Office, which is part of the State Administration of Market Supervision. Jurisdiction of administrative measures will usually be decided with several aspects taken into consideration, such as the venue of the infringement occurrence or the location where the operator is based. As a result, administrative measures will be taken by a competent branch of the relevant administrative authority at a local level. The jurisdiction of a civil lawsuit will usually be decided according to the Interpretations of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Civil Cases related to Trademark Disputes, and will usually be heard by the intermediate people’s court for the first instance of hearing, with very few exceptions. The jurisdiction in cases of a criminal charge shall be decided according to the Criminal Procedure Law (revised in 2018) as well as the relevant regulations and interpretations, in general, jurisdiction of 'private prosecution' cases shall be decided by the Criminal Procedure Law.

Further, there are three specialised intellectual property courts in China, which are located in Beijing Municipality, Shanghai Municipality and Guangzhou City, established according to the Provisions of the Supreme People's Court on the Jurisdiction of the Intellectual Property Courts of Beijing Municipality, Shanghai Municipality and Guangzhou City over Cases.

In China, trademark infringement may constitute a criminal offence and be charged, if triggered by the Criminal Proecdure Law. There are three types of criminal offence relating to infringement of the registered trademarks, namely:

  • using counterfeited registered trademarks;
  • selling commodities bearing counterfeited registered trademarks; and
  • illegally manufacturing or selling illegally manufactured registered trademarks.
Procedural format and timing

What is the format of the infringement proceeding?

The procedures for administrative measures, civil lawsuit and criminal charge vary from case to case in respect of enforcement against infringement. For the administrative measures, there might be local differences based on local practice, which generally include a review of the facts of the case, examination of evidence, administrative and legal analysis and internal discussions and decision making, the process of which is usually led and managed by the respective competent administrative authority, with the concerned parties brought in upon the authority’s occasional request, and the final decision will be made at the discretion of the authority. There is no specific legal requirement in respect of the timeline for the administrative proceeding for an infringement case. The authority in charge is mentioned in question 26.

For a civil lawsuit, the proceedings are more established and formal, and based on the necessity for the case, there might involve discovery (which differs to that under common law practice), testimony and expert opinion, upon the court’s prior consent. In general, a civil lawsuit shall be closed within six months for the first instance hearing since the date when the case is filed for the first instance hearing, and shall be closed within three months for the second instance hearing since the date when the case is filed for its second instance hearing.

For a criminal charge case, the proceedings may be initiated through the following channels:

  • the trademark owner or interested party may report the infringement case to the competent public security bureau, which will hand over the case to the prosecutor if it deems the evidence is sufficient, and then the prosecutor will decide and initiate prosecution proceedings if so decided;
  • the administrative authority may hand over the case to the public security bureau if it deems that the infringement has triggered the criminal offence, the public security bureau may investigate it and pass the case to the prosecutor if it deems the evidence is sufficient, then the prosecutor will decide and initiate prosecution proceedings if so decided; and
  • the trademark owner may initiate the 'private prosecution' proceedings by directly filing a lawsuit with the competent court if it can collect sufficient evidence of infringement.
Burden of proof

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

In China, any party to a civil lawsuit shall be responsible for providing evidence in support of the facts on which their own claim or the facts on which their defence to the claim of the other party are based. Where there is no evidence is or the evidence provided is insufficient to support the claims made, the party that bears the burden of proof shall bear the unfavourable consequences. This applies to most infringement or dilution cases; however, there are few exceptions where the burden of proof can be imposed on the defendant instead of the plaintiff, such as the scenario when an e-commerce platform operator claims for trademark infringement, according to the Guidelines of the Beijing Municipal High People's Court for the Trial of Cases Involving Network Intellectual Property Rights.

Standing

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

In a case of infringement, the trademark owner (ie, the registrant) or any interested party may seek a remedy, either through the procedures of administrative measures, civil lawsuit or criminal charge. According to the Standards for Trademark Review and Examination, the following entities are interested parties:

  • the legal successors to rights of the trademark;
  • the trademark licensees;
  • the other entities that have competent evidence proving their interest in the right of the trademark being concerned.

To decide whether an entity is an interested party, it shall be assessed and decided based on the facts and scenario when the trademark application is being reviewed and examined, and, if a party begins to have an interest in the trademark during the process of review and examination, it shall be deemed as an interested party. Also, if a criminal offence is involved or suspected, the trademark owner or the interested party, any legal entity or individual finding or seeing the criminal offence that constitutes or may constitute a criminal charge is entitled to report the case to the public security bureau.

To seek remedy under the administrative measures, the complainant shall submit the following written documents:

  • an infringement complaint with the infringing party’s name and address specified, infringement facts, the claims and the legal basis stated, and the name, contact details and representative (if any) of the complainant;
  • the business licence (or a stamped and verified copy);
  • the trademark registration certificates (or stamped and verified copies); and
  • infringement evidence including commodities, invoices, photos or other materials bearing or proving infringements.

To file a civil lawsuit or report a criminal charge case in respect of trademark infringement, conditions and requirements as requested by the Civil Procedure Law and the Criminal Procedure Law as well as their respective regulations and interpretations need to be followed.

The parties who have standing to bring a criminal complaint are specified in question 27.

Border enforcement and foreign activities

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?

In China, the customs offices protect intellectual property rights relating to imported or exported goods. For any intellectual property rights' infringement issue that needs to be reported, the consignor or consignee of the exported or imported goods shall make a truthful declaration to the customs and provide all necessary documents that support the legitimate use of the intellectual property rights. If any imported goods are found infringing intellectual property rights protected by Chinese laws and administrative regulations, the infringing goods shall be confiscated by the customs office and a penalty shall be imposed. If a criminal offence is found to have taken place, the infringing party shall be charged with the criminal offence.

To halt the import and export of infringing goods, the customs offices can take the following measures:

  • the detention upon application by the intellectual property owner or interested party;
  • the investigation and handling of the suspected infringement case; and
  • the confiscation of the infringing goods and disposing of them according to the legal requirements.

For trademark infringement taking place outside China, if the infringing goods are stored or detained in China or the domicile of the defendant is in China, it can be charged in China.

Discovery

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

The Administration for Industry and Commerce (which is now known as the Administration of Market Supervision) may, based on the available evidence of illegal conduct or information received from the public, exercise the following power in trademark infringement investigation:

  • question the parties concerned and investigate the infringement;
  • review and copy the contracts, invoices, books and other materials relating to infringement activities;
  • conduct on-site inspections of the premises where the party concerned is suspected of carrying out activities that infringe others' registered trademark; and
  • inspect articles involved in trademark infringement, and seize or detain goods that are proven to be infringing others' registered trademark.

To determine the amount of infringement compensation, the people’s court may order the infringing party to submit account books and information relating to the infringement activities, if the trademark right owner has tried their best but cannot provide sufficient evidence as such books and information are possessed by the infringing party. In the case the infringing party refuses to submit the accounts or information, or if the submitted items are forged, the people’s court may determine the compensation amount with reference to the amount claimed by the right owner and the evidence provided. If evidence needs to be collected abroad, the request shall be raised as a request for judicial assistance, which shall be conducted through the channels as stipulated in the international treaties concluded or acceded to by China. Where there is no treaty relationship, the request for judicial assistance shall be conducted through diplomatic channels.

Timing

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

There is no fixed time frame to close an infringement or dilution case or related action, because it can vary from case to case and be different from the administrative measures to the civil lawsuit or the criminal charge, and can be very much dependent on the availability of the evidence, either at the preliminary injunction stage, the trial levels or on appeal. Although there is a time frame for a civil lawsuit, it can be extended per application, therefore making it difficult to get a time frame fixed.

Limitation period

What is the limitation period for filing an infringement action?

The statute of limitation for filing a trademark infringement is three years, starting from the date on which the trademark owner or a materially interested party knows or should have known about the act of infringement. However, if a trademark owner or a materially interested party files an infringement action after more than two years, if it is an ongoing infringement while the lawsuit is filed and when the trademark is still in the period of validity, then the people’s court should issue a ruling ordering the infringing party to stop the infringement.

Litigation costs

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

It is impossible to give a range of costs associated with an infringement or dilution action in China, because it may vary from several thousand yuan to several million yuan. However, for a civil lawsuit, there are various typical costs, such as:

  • court fees charged by the people’s court, which can be from 500 yuan to 1,000 yuan when there is no claimed amount for infringement compensation, which will need to be calculated according to the amount of being claimed, if there is a claim for infringement compensation;
  • an application fee charged by the people’s court, either for enforcement of the effective judgment, ruling or mediation agreement, judicial conservatory measures, payment order or other judicial actions;
  • travel and board expenses incurred by the witness, appraiser or translator on the date as appointed by the people’s court; and
  • other costs and expenses incurred relating to the lawsuit.

In most cases, the costs shall be borne by the party that loses the case, unless the party winning the case wants to bear the costs. In a case partially favouring the plaintiff and partially favouring the defendant, the people’s court will decide the cost sharing among parties according to the facts of the case. Fees incurred relating to legal services provided by lawyers are not included above, which may be very different from case to case.

Appeals

What avenues of appeal are available?

For trademark infringement cases in Beijing, Shanghai or Guangzhou, if a case of appeal is instituted by a party against the civil or administrative judgment granted as a result of the first instance of hearing, in respect of copyright, trademark, technology contract, unfair competition or other intellectual property rights, as granted by a basic-level people’s court, then the appeal shall be heard by the Intellectual Property Court. And, if an appeal instituted by a party is against the judgment granted as a result of the first instance of hearing by the Intellectual Property Court, then the appeal shall be heard by the High Court where the Intellectual Property Court is located.

Defences

What defences are available to a charge of infringement or dilution, or any related action?

There are different types of defences to a charge of infringement or dilution, as well as procedures, depending on the nature of the charge, whether it is an administrative measure, a civil lawsuit or a criminal charge. However, there are several ways to defend in practice, as follows:

  • if the party to a charge is eligible to do so, according to the laws and regulations, only the trademark owner or the interested party may file a claim or lawsuit;
  • if the jurisdiction is correct, first, the jurisdiction shall be decided based on the nature of the charge, as the competent authority is different for an administrative measure, civil lawsuit or criminal offence. If it is a civil lawsuit, the place where the infringing goods are stored, sealed or detained, or where is the infringing party’s domicile has jurisdiction;
  • if there is valid statute of limitation, for a civil lawsuit, which shall be decided according to question 33;
  • if the trademark registration shall be annulled, the trademark registration can be annulled if it is proved as violating the provisions of the Trademark Law, or if it was acquired through forgery or other improper means;
  • if it is fair use, according to the Trademark Law, the owner shall not prohibit others from rightful or fair use of the generic names, models or designs of the goods, or direct reference to the quality, main raw materials, function, use, weight, quantity or other features of the goods, or geographical names as included in the registered trademark;
  • if there is prior use, where an identical or similar trademark with certain influence has been used, prior to use by the trademark owner, on the same or similar goods prior to the trademark owner's trademark registration application, the trademark owner may not prohibit the user from continuous use of the trademark within the original scope but may request the user to add additional proper logos for distinction purpose;
  • if an identical or similar trademark is used prior to the trademark owner’s use, if so, the trademark owner may not prohibit the user of the aforesaid trademark from continuous use within the original scope, but may request the user to add additional proper logos for distinction purpose; or
  • if the registered trademark is used, where the owner of the registered trademark claims for compensation and the infringing party raises a plea that the owner has never used the registered trademark, the people’s court may request the owner provide proof of use for the past three years, if the owner fails to provide the proof, the infringing party may be ordered not to bear liability for it.
Remedies

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

In general, one or more of the following remedies are available for the party as a result of successful fighting against infringement or dilution:

  • the cessation of infringements;
  • the removal of obstacles;
  • the elimination of dangers;
  • compensation for losses; and
  • the elimination of a negative impact.

As to monetary compensation, according to the Trademark Law, it shall be determined based on the owner's actual losses caused by the infringement or the interests obtained by the infringing party from the infringement, and, if the actual losses are hard to be determined, can be determined based on times of the royalties of the registered trademark when it is hard to determine both losses and actual interests. For seriously malicious infringement, the amount of compensation may be one to three times the aforesaid amount. The compensation shall also include reasonable expenses the owner incurs to prevent infringement. Where it is hard to determine the owner's actual losses, the infringing party's actual interests or the royalties of the registered trademark, the people’s court shall, based on the actual circumstance of infringement, bring in a verdict of an amount up to 3 million yuan.

ADR

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

In China, mediation and conciliation are two major types of ADR for dispute resolutions. For mediation, there is a specific law, the Law on Civil Mediation, which has been in effect since 1 January 2011. According to this Law, 'civil mediation' refers to the activities of civil mediation committees in promoting the parties to voluntarily reach mediation agreements through consultation on the basis of equality by persuasion, guidance and other methods to resolve disputes among people. A mediation agreement reached through mediation by a civil mediation committee can be applied to the people’s court for confirmation, once confirmed effective by the court, the mediation agreement can be enforced by the court through an application for enforcement submitted to the court by the party supported by the agreement, if the other party refuses to perform or fails to perform in whole.

Aside from mediation, conciliation is more frequently used in legal proceedings, with lawyers being involved. For example, conciliation can be applied throughout the whole civil law litigation procedures, prior to the litigation and in the litigation. In the 'Opinions of the Supreme People's Court and the Ministry of Justice on Launching the Pilot Program of Conciliation by Lawyers', conciliation by lawyer refers to the activities of lawyers, lawyers’ conciliation studio or lawyers’ conciliation centre, acting as the neutral third party, in promoting the parties to voluntarily reach conciliation agreements, so as to solve disputes. A conciliation agreement and mediation agreement with monetary payment or marketable securities transaction involved, which is reached through conciliation via a lawyer’s help can be applied to the people’s court for a payment order, so as to be enforced.

In general, compared with traditional litigation or arbitration, mediation and conciliation are regarded as providing the following benefits:

  • they are more cost-effective, even when a litigation case is concluded through mediation or conciliation;
  • the court fees can be reduced by as much as half, or be totally waived when a civil lawsuit is concluded through mediation or conciliation;
  • conciliation is a more voluntary choice and decided by the parties involved, which means the parties will be more willing to have it enforced, because it reflects their choice and willingness for resolution; and
  • the procedures are more flexible and voluntary compared with litigation or arbitration.

As to the disadvantage of mediation and conciliation, in general, the enforceability of it is deemed less strong than the litigation judgment or arbitral award.