Legal framework

Domestic law

What is the primary legislation governing trademarks in your jurisdiction?

In China, there are two pieces of primary legislations governing trademarks (ie, the Trademark Law of the PRC and the Implementation Regulations for the Trademark Law of the PRC).

Besides, there are several important interpretations issued by the Supreme People’s Court on trademark, which include:

  • 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;
  • the Opinions of the Supreme People's Court on Several Issues concerning the Trial of Administrative Cases in Respect of Trademark Right Granting and Confirmation; and
  • the Interpretations of the Supreme People's Court on Issues Concerning the Jurisdiction and Application of Law for Trademark Cases after the Implementation of the Decision on Amending the Trademark Law.
International law

Which international trademark agreements has your jurisdiction signed?

China has signed following international trademark agreements:

  • the Madrid Agreement Concerning the International Registration of Marks;
  • the Paris Convention for the Protection of Industrial Property;
  • the Convention Establishing the World Intellectual Property Organization;
  • the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (Nice Agreement);
  • the Agreement on Trade-Related Aspects of Intellectual Property Rights;
  • the Singapore Treaty on the Law of Trademarks; and
  • the Trademark Law Treaty.
Regulators

Which government bodies regulate trademark law?

The Trademark Office of National Intellectual Property Administration, the PRC.

Registration and use

Ownership of marks

Who may apply for registration?

Any natural person, legal entity or other organisation which needs to acquire the exclusive right to use a trademark for its good or service may apply for registration.

Scope of trademark

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

In China, any sign that distinguishes the goods of a natural person, legal entity or other organisation from those of others, including any word, graphic, letter, number, three-dimensional sign, colour combination, sound and combination thereof, may be registered as a trademark and be protected. According to the Trademark Law, 'registered trademarks' refer to trademarks that have been approved by and registered with the Trademark Office, including goods marks, service marks, collective marks and certification marks. Unlike those mentioned above, smell cannot be registered and protected as a trademark in China, although in some countries it can be registered and protected as a trademark.

Aside from that, the following signs may not be used as registered trademarks:

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

Besides, the geographical names of administrative divisions at or above the county level and foreign geographical names well known to the public shall not be used as trademarks, except for geographical names that contain other meanings or constitute parts of a collective mark or certification mark. Where a trademark bearing any of the above-mentioned geographical names has been registered, it shall continue to be valid.

Moreover, the following signs shall not be registered as trademarks:

  • 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 distinctive characteristics.
Unregistered trademarks

Can trademark rights be established without registration?

In general, trademark rights can be protected in China only when registered in China. As article 3 of the Trademark Law stipulates, 'the registrant of a trademark enjoys the exclusive right to use the trademark, which shall be protected by law'.

However, unregistered trademarks can be protected under several circumstances, mainly according to the Trademark Law and the Anti-Unfair Competition Law (revised in 2019), based on stipulations that prohibit:

  • misleading use of marks that are identical or similar to the name, packaging or decoration of another business’s commodity which has influenced to a certain extent or which may create misleading relationship with that business; and
  • malicious application for registration of someone else’ trademarks.
Famous foreign trademarks

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?

If a famous foreign trademark is neither registered nor used in China, it can hardly be protected in China. If it is desired to protect in China, it may either be registered, or recognised as a 'well-known trademark' either by the Trademark Office of National Intellectual Property Administration, or pursuant to a court judgment. In China, if it is recognised as a well-known trademark, comparatively speaking, it might be better protected. To get recognised, the trademark shall be proved to be widely known by the relevant public in China, with evidence solid enough to at least prove that the trademark:

  • is well known to the general public;
  • has been continuously used in China for at least five years if not yet registered, or at least three years after being registered or continuously used for no less than five years;
  • is continuously and widely promoted and publicised;
  • is protected as a well-known trademark in China or in other countries and areas;
  • is well known for its sales, marketing shares, net profit, tax payment, sales territory of primary commodities using the trademark in the last three years; and
  • has other documents and materials that could prove the popularity of the trademark.

It needs to be mentioned that, in practice, 'well-known trademark' needs to be reviewed and recognised on a case-by-case basis, and there is much more uncertainty than before; therefore, protection provided by this means is less certain than the trademark registration method.

The benefits of registration

What are the benefits of registration?

Only trademarks registered in China can be protected in China (see question 6), although there are several rare exceptions; therefore, the biggest benefit of registration is protection.

In case the registered trademark is being infringed, the registrant or the party with an interest (such as an authorised trademark licensee) may apply for administrative remedy such as a customs injunction, or seek judicial remedies such as filing a civil lawsuit based on civil cause of action or based on a criminal offence. The details, such as major requirements to be met and procedures to be followed, can be found in articles 60 and 61 of the Trademark Law, and article 12 of the Regulations on the Customs Protection of Intellectual Property Rights. In practice, the customs injunction is very helpful for the trademark registrant, who may apply to the customs office for impoundment of the infringing goods if it is discovered that the suspected infringing goods are about to be exported.

Filing procedure and documentation

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?

The important documents that usually need to be submitted for trademark registration application are as follows:

  • the certificate of corporate good standing;
  • the trademark registration application form;
  • power of attorney; and
  • the trademark's design.

In China, a trademark application shall be made according to the published classification table of commodities and services, with sub-classifications identified and included.

Online application for trademark registration is available according to the Interim Provisions on Online Applications for Trademark Registration. The registered trademark will be granted with an electronic trademark registration certificate in addition to the hard copy certificate.

Trademark searches are available before filing, which can be carried out on the following official website operated by the Trademark Office of National Intellectual Property Administration: wsjs.saic.gov.cn, which is self-explanatory with the procedures that need to be followed.

Registration time frame and cost

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?

If all documents submitted are satisfactory to the Trademark Office of National Intellectual Property Administration, with all procedures gone through smoothly and successfully, without additional procedures such as review of refused application, invalidation, cancellation, then it will usually take at least eight months to obtain a trademark registration. According to the law, the Trademark Office shall complete the examination of the application documents within nine months upon receipt of the complete application. The cost for a trademark registration may vary, depending on how many classes and sub-classes of commodities or services it desires to register, and whether it involves any additional procedure such as review of refused application, invalidation or cancellation, which will definitely increase the time needed and the fees incurred. The trademark registration formally come into effect on the date when the trademark registration is publicised; usually it will be the date following the publication date.

Classification system

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?

The Nice Agreement is followed by China, which is the international classification system. China uses multi-class applications, and the cost varies owing to the reasons given in question 10.

Examination procedure

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 Trademark Office will follow the Standards for Trademark Review and Examination to review the application and determine whether or not to grant a trademark registration. The examination will be carried out in form and substance. Each application will be examined for potential conflicts with the other trademarks. A letter of consent might be helpful if there is an objection based on a third-party mark; however, it will not be sufficient in most cases, and it also depends on who sends the letter of consent.

Use of a trademark and registration

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?

There is no legal obligatory requirement for claiming or proving use of a trademark or service mark before the trademark is registered in China. Foreign registration may grant right of priority, when an applicant for trademark registration files an application for trademark registration in China within six months of filing the first application for registering the same trademark for the same goods in a foreign country, the applicant may have priority in accordance with any agreement concluded by and between China and the foreign country concerned, or with the international treaty to which both countries are parties, or on the basis of the principle of reciprocity.

Although a trademark can be registered without prior use, if, however, a registered trademark has become the generic name of the designated goods or stays unused for three consecutive years without due cause, any entity or individual may apply to the Trademark Office for revoking this trademark, and the Office shall make decision on it within nine months of receipt of the application.

Markings

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?

In China, both ® and ㊟ can be used to indicate that a trademark is a registered trademark, the former of which is an encircled letter R and the latter is the Chinese character zhu. The mark of registration shall be positioned at the upper right corner or lower right corner of the relevant trademark. The registered trademark may be marked with the words 'registered trademark' or the mark of registration as indicated above, either on the commodity, the commodity packaging, the instruction manual or its other accessories.

According to the Chinese laws, it is not mandatory to mark the registered trademark with ® or ㊟ to indicate it is registered, and trademark registration is not mandatory for all commodities or services. However, there are a few commodities where it is legally mandatory to use registered trademarks, which shall not be manufactured or marketed before the trademarks are registered, such as tobacco products like cigarettes, cigars and packed cut tobacco, and pharmaceutical products with the exception of traditional Chinese medicinal materials.

In practice, it is encouraged to use such words or symbols to indicate that the trademarks are registered trademarks, not only for the purpose of better marketing and promotion of image, but also to prevent them being infringed. They can also serve the purpose of evidence of use, which can prevent them being applied for revoked for not being used for three consecutive years.

Appealing a denied application

Is there an appeal process if the application is denied?

Yes. If an application is denied, the Trademark Office shall notify the applicant in writing of the result. If dissatisfied with the denial decision, the applicant may apply to the Trademark Review and Adjudication Board for review within 15 days upon receipt of the denial notice. The said Board shall make a ruling within nine months upon receipt of the application and notify the applicant in writing. If it is necessary to prolong the review period, it can be extended by three months. If dissatisfied with the ruling granted by the Trademark Review and Adjudication Board, the party concerned may appeal to a people’s court within 30 days of receipt of the notice.

Third-party opposition

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?

Yes. Applications are published for public opposition, any third party may oppose an application prior to registration or seek cancellation or revocation after registration. For example, for a trademark that is not yet registered but is published after a preliminary examination, any prior owner or interested party may raise an objection, within three months from the date of publication, to the Trade Office against registration of this trademark. And for a registered trademark, if it is found to be registered by having violated laws, or by fraud or other improper means, or maliciously registered, either without authorisation or by a malicious agent or representative under its own name without awareness of the client, such registration can be applied to the Trademark Review and Adjudication Board for a ruling to make it annulled or revoked.

If it is neither registered nor recognised as a 'well-known trademark', a foreign trademark owner can be difficult to oppose a bad-faith application for its mark. Government charge for a third-party opposition or cancellation proceeding is 500 yuan per class, per trademark; however, total costs may vary as the agent fee or legal fees incurred can vary significantly.

Duration and maintenance of registration

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?

The period of validity for a registered trademark is 10 years, starting from the day the registration is granted. This period can be extended upon expiry, if an extension is applied for. To make the trademark registration valid, it needs to be used in practice; if a registered trademark is not in use for three consecutive years, anyone can submit an application, applying to annul or revoked it. According to the Trademark Law, use of trademarks refers to such activities as using trademarks on goods, goods packaging or containers and goods transaction documents, or using trademarks in advertising, exhibits and other commercial events to identify the sources thereof. Therefore, to prove use of the registered trademarks, it is necessary to collect and provide solid evidence of such.

Surrender

What is the procedure for surrendering a trademark registration?

To surrender a registered trademark or deregister a registration of certain designated commodities, a trademark registrant shall file an application with the Trademark Office and return the original Certificate of Trademark Registration. Upon being approved by the Trademark Office, the exclusive right to use the registered trademark or to use it on certain designated commodities will be terminated.

Related IP rights

Can trademarks be protected under other IP rights (eg, copyright, designs)?

Trademarks can be protected under other IP rights, such as copyright. If the plaintiff files a lawsuit on the ground that the words, figures, etc, used for someone else's trademark infringe the plaintiff's prior rights such as copyright with solid evidence, then the people’s court shall accept the lawsuit filing.

Trademarks online and domain names

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

Infringement is infringement, online or off-line. In general, laws and practices for trademarks online protection are the same as such for offline protection. However, it is true that to claim against online infringement, there can be more challenges and difficulties for the trademark owners or interested parties as the infringement can be more anonymous, so it could be costlier and more time consuming to identify the infringing party, to collect and substitute evidence and to prove losses and damage caused.

For domain name online protection in China, there are several specific laws, namely:

  • the Uniform Domain-Name Dispute-Resolution Policy;
  • the China Internet Network Information Center (CNNIC) ccTLD Dispute Resolution Policy Rules and its Supplemental Rules;
  • the Rules for the Implementation of National Top-level Domain Name Registration;
  • the CNNIC Measures for Resolving Domain Name Disputes;
  • the Administrative Measures for Internet Domain Names; and
  • the Implementation Rules of CNNIC for Domain Name Registration.

Licensing and assignment

Licences

May a licence 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 (eg, quality control clauses)?

According to the Trademark Law and its Implementing Regulations, the licensor shall file the licence agreement with the Trademark Office for records, without the filing, the licence shall not be used to fight against a third party with good faith. To complete the filing, the licensor shall, within the term of the licence agreement, apply to the Trademark Office for record-keeping filing and submit the relevant record-keeping materials. The record-keeping materials shall state the licensor of use of the registered trademark, the licensee, licence term, the range of commodities or services licensed to use and other relevant matters.

The provisions of a licensing agreement according to the Measures for Record-filing of Trademark Licence Contracts are as follows:

  • the licensed trademark and registration certificate number thereof;
  • the scope of licensed commodities;
  • the licence period;
  • the provision method of the logo of the licensed trademark;
  • clauses on the supervision by a licensor of the quality of commodities using the registered trademark thereof; and
  • clauses on the marking of the licensee's name and the place of production of commodities on the commodities using the licensor's registered trademark.

In practice, the terms and conditions for a licensing agreement will be more detailed than the above points, which will also include provisions on territory, royalty (including minimum guaranteed royalty in most cases), payment, auditing, limitations of licence, governing law and dispute resolution, etc.

Assignment

What can be assigned?

According to the Trademark Law and its Implementing Regulations, both the registered trademark and the trademark being applied for registration can be assigned, subject to the satisfaction of all of the Law's following conditions:

  • if a registered trademark is to be assigned:
    • it shall be within the period of validity, and it shall not be assigned if it is in the grace period for extension that is not within the period of validity;
    • the registered trademark is neither annulled nor revoked;
    • there is no freezing or other coercive measure taken by the people’s court against the registered trademark; or
    • there is no pledge imposed on the registered trademark and the assignment can be made only after the pledge is removed and released from the trademark; and
  • if a trademark having its registration being applied for is to be assigned; first, confirmation is needed as to whether the application procedure is complete or not, and the assignment is not allowed in the case of any occurrence of the following:
    • if the Trademark Office's decision to refuse has taken effect; and
    • if the Trademark Office’s decision not to approve the registration has taken effect.

In addition, if an assignment might cause misleading or other negative impact, the assignment can be denied by the Trademark Office.

To assign a registered trademark, the assignor shall sign an assignment agreement with the assignee, and jointly file an assignment application with the Trademark Office. The assignor shall assign to the assignee all similar trademarks on the same goods and all same or similar trademarks on the similar goods it owns. If the assignor fails to assign all of such as requested by law, the Trademark Office will notify the assignor requesting it to take corrective action within three months as of the notice date. If the assignor fails to do this upon expiry of the given date, the assignment application will be deemed abandoned, which will then be informed to the applicant by the Trademark Office in writing.

Assignment documentation

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

As with question 22, an assignment agreement needs to be signed between the assignor and the assignee for a trademark assignment. There is no requirement of notarisation. If the agreement is signed in a foreign language, a Chinese translation is needed. An assignment application shall be submitted jointly by the assignor and the assignee with the Trademark Office, with application documents including but not limited to the assignment agreement, the certificates of good standing of both parties, the power of attorney, if an agent is involved and other documents, may be requested. Once assignment is approved, it will be published, and the assignee will start to enjoy the exclusive right to the trademark as of the date of the assignment announcement.

Validity of assignment

Must the assignment be recorded for purposes of its validity?

The assignment shall be submitted to the Trademark Office for approval, instead of filing for records. Once assignment is approved, it will become effective and will be published (see question 23).

Security interests

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

According to article 79 of the Security Law, security interest is recognised in registered trademarks that are eligible to be assigned under Chinese laws and regulations. Such a registered trademark can be pledged. A pledge agreement shall be signed between the pledger and the pledgee, and shall be registered with the competent government authority, and the pledge agreement will take effect on the date when the registration is made.

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.

Update and trends

Key developments of the past year

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

Key developments of the past year39 Are there any emerging trends, notable court rulings, or hot topics in the law of trademark infringement or dilution in your jurisdiction?Revised Trademark Law 2019

On 23 April 2019, the Trademark Law (revised in 2019) was promulgated, which will become effective from 1 November 2019. The major purpose of the 2019 revision is to enhance stronger registered trademark protection and to tackle effectively malicious trademark registration. The significant revisions are as follows:

  • the following provisions are added to combat malicious trademark registration:
    • any trademark applied for registration and not for the purpose of being used will be deemed malicious registration, and will therefore be refused;
    • any agent being aware of or who should be aware of a malicious registration shall not help with the application, otherwise the agent shall be legally liable for it; or
    • any applicant or agent involved in malicious registration or malicious trademark litigation will be punished according to the Trademark Law (revised in 2019); and
  • monetary compensation for infringement is significantly increased from that specified in question 37, which includes:
    • the amount of compensation for seriously malicious infringement is increased from 'one to three times' the relevant amount, to 'one to five times' the relevant amount; and
    • the verdict of an amount is increased from 'up to 3 million yuan' to 'up to 5 million yuan'.
China’s Trademark and Brand Strategy and dedication to promote development of Chinese brands

On 17 May 2017, the 'Opinions of the State Administration for Industry and Commerce on Further Implementing the Trademark and Brand Strategy and Promoting the Development of Chinese Brands' was promulgated, which became effective on the same day. According to the Opinions, the implementation of the trademark and brand strategy is to deepen and develop the trademark strategy, and to promote the transformation from 'Made in China' to 'Create in China' and to build a great power for trademarks and brands.

China's customs’ focus on cross-border trademark protection

From time to time, China’s customs offices will initiate different campaigns to fight intellectual property infringement, including trademark protection. In recent campaigns, the General Customs Office and its local branches have focused upon and put more resources into fighting infringement through all transportation channels, including transportation by sea, air, land, rail, express and mail, and monitoring with a focus on different types of trading such as general trading, online trading and marketing, etc, which imply a different risk of infringement. In such campaigns, another focus is to enhance the protection of trademarks and brands of multinational companies, which is aimed at making multinational companies feel more confident in China’s intellectual property protection competence and capabilities.