Trademark enforcement

Infringement

A person shall be liable for trademark infringement if he/she commits any of the following acts:

• uses a trademark that is identical with or similar to a registered trademark in relation to identical or similar goods without the authorization of the owner of the registered trademark;

• knowingly sells goods that are in infringement of the exclusive right to use a registered trademark;

• counterfeits, or makes without authorization, representations of a registered trademark of another person or sells such representations;

• changes a registered trademark and puts the goods bearing the changed trademark on the market without authorization of the owner of the registered trademark;

• in other respects causes prejudice to the exclusive right of another person to use a registered trademark.

Preliminary injunction

Where the owner of a registered trademark or an interested party has evidence indicating that another person is engaged in or will soon engage in an act of infringement of the owner's exclusive right to use his/her registered trademark and that, unless the act is stopped in a timely manner, irreparable injury will be caused to the owner's legitimate rights and interests, the owner may, before instituting legal proceedings , apply to the people's court for an injunction prohibiting the act and preserving the owner's assets.

Preservation of evidence

To stop an act of infringement where evidence may be destroyed or lost or become difficult to obtain in the future, the owner of a registered trademark or an interested party, before instituting legal proceedings,may apply to the people's court to have the evidence preserved.

The people's court shall make a decision within 48 hours from receipt of the application. Where the people's court decides to provide the preservative measures, the decision shall be executed immediately.

The people's court may order the applicant to provide security. Where no security is provided, the people's court shall reject the application.

Where the applicant fails to institute legal proceedings within 15 days from the day on which the people's court takes the preservative measures, the people's court shall revoke the measures.

Compensation for damage

The amount of damages for infringement of the exclusive right to use a registered trademark shall be the profit that the infringer has earned through the infringement during the period of the infringement, or the losses that the infringee has suffered through the infringement during the period of the infringement, including any reasonable expenses the infringee has incurred in an effort to stop the infringement.

Where the profit earned by the infringer or losses suffered by the infringee through such an infringement cannot be determined, the people's court shall grant compensation not exceeding 500,000 renminbi yuan according to the circumstances of the act of infringement.

Where a party unknowingly offers for sale goods that are an infringement of the exclusive right of another person to use a registered trademark, but is able to prove that he/she has obtained the goods lawfully and identifies the supplier, such party shall not be held liable for damages.

Criminal sanction

Any person whose use, without the consent of the owner of a registered trademark, of a trademark that is identical to the registered trademark in relation to identical goods, commits a crime and shall be prosecuted according to law for his/her criminal liabilities in addition to compensation for the damages that the infringee suffers.

Any person who counterfeits, or without authorization makes, representations of a registered trademark of another person, or offers for sale such representations, shall be prosecuted according to law for his/her criminal liabilities if such actions constitute a crime.

Any person who knowingly sells goods that bear a counterfeited registered trademark, thereby committing a crime, shall be prosecuted according to law for his/her criminal liabilities in addition to compensation for the damages that the infringee suffers.

In any of these cases the infringer may be subject to a maximum of seven years imprisonment.

Administrative actions

A request for administrative actions may be filed with the AIC in the place of the infringement or the place of the infringer's residence. In trademark infringement cases administrative actions through the AIC are the most effective and most frequently chosen approach. AIC may take the following measures to halt the infringement:

• an order to stop immediately the sale of the goods;

• seize and destroy the representations of the trademark in question;

• an order to remove the infringing trademark from the remaining goods;

• seize such moulds, plates and any other tools of offence used directly and exclusively in the trademark infringement;

• an order to destroy the infringing articles, if it cannot sufficiently stop the infringing by taking the four previous measures, or if the infringing trademark and the goods involved cannot be separated from each other.

In comparison with court proceedings the administrative proceedings are both efficient and cost-effective . If damages are sought, however, judicial proceedings are highly recommended.

Juridical actions

A trademark infringement can be brought before court under whose jurisdiction the infringement takes place or where the infringer resides.

Statutory limitation

Administrative or court actions against trademark infringement must be brought within two years from date that the trademark owner knows or should have known that the counterfeiting and/or infringing acts were taking place.

For successive infringement acts, however, courts may accept cases filed after the two-year time limit expires and order the infringer to cease infringing and compensate the infringee for the damage. Such damages may not include those suffered by the infringee more than two years prior to the date of the suit.

Burden of proof

The person who initiates proceedings bears the burden of proof. Without appropriate evidence the court or the AIC will not take any action.

Any denial of the charge of infringement or counter- claim must also be supported by evidence.

Appeal

A party may request reconsideration of the decision of an AIC by the AIC at a higher level. The decision of the higher AIC may be appealed against to the court having jurisdiction.

In court proceedings a party may appeal to the court of second instance if it is not satisfied with the decision of the court of first instance. The decision of the court of second instance is final and binding.