In April 2020 the Beijing High Court published the Guidelines on the Determination of Damages and Statutory Damages in Disputes over Intellectual Property and Unfair Competition. These guidelines, which entered into effect on the date of issuance, are detailed, precise and even innovative. Even if they have binding force on only the Beijing courts, they should be influential throughout the rest of the country.
In November 2019 the China National Intellectual Property Administration (CNIPA) stated that when a trademark embossed on a bottle cannot be removed, recyclers should ensure that they cover said trademark with another label to avoid the likelihood of confusion. The CNIPA added that affixing another label bearing another trademark on a bottle, leaving the original embossed trademark visible, is insufficient to avoid confusion.
When goods are manufactured in China by an original equipment manufacturer factory for export, the foreign buyer is not always the owner in China of the trademark that is affixed on the goods. But what if the trademark is registered in the name of a third party and such third party decides to sue the factory for infringement and stop the export of the goods? This is a long-debated question of which the courts have demonstrated different understandings.
A recent Supreme People's Court (SPC) decision clarified the requirements to cite the prior use defence under Article 59.3 of the Trademark Law. In this regard, the court stated that the only person eligible to cite this defence is the prior user themselves and that such use must have occurred prior to the registration application and the trademark owner's use of the registered trademark. Further, for the first time, the SPC made it clear that geographical scope is a key element in defining the original scope of use.
In China, the practice of defensive trademarks appears to be a guiding factor when determining the legitimacy of a trademark application, but said trademarks remain subject to cancellation in case of non-use. The main challenge is the bad-faith strategy of applying to register many different trademarks without the aim of using them. In this respect, the recent revision of the Trademark Law gives hope that such a highly prejudicial phenomenon will be progressively eradicated.
The Beijing High Court recently published an extensive set of guidelines on administrative trademark cases, which are divided into two parts: procedural issues and substantive matters. Although the guidelines clarify a number of matters (eg, the possibility of bringing an action against a ruling of the National Intellectual Property Administration when such ruling was remade in accordance with an effective court judgment), they contain a number of unpleasant surprises.
The revision of the Anti-unfair Competition Law is part of the new effort to enhance the protection of intellectual property in China. It also reflects the ongoing negotiations between China and the United States on various topics, including IP protection. The revisions provide (among other things) a wider definition of a 'trade secret' and introduce the concept of punitive damages and the inversion of the burden of proof.
In 2018 the China Trademark Office launched a consultation for the fourth revision of the Trademark Law, which will enter into force in November 2019. The revision focuses on two important issues: the proliferation of trademarks, which was one of the main issues on which comments were submitted, and enforcement actions against infringers, which are considered insufficiently deterrent. As the new law was promulgated in such a hurry, further explanation and information on how it will be implemented is necessary.
In 2017 the Beijing IP Court rendered a groundbreaking decision by awarding the owner of an unregistered well-known trademark Rmb3 million in damages for infringement. According to the Trademark Law (2013 version), the owner of an unregistered trademark can prevent a third party from registering or using an identical or similar trademark on the same or similar goods. However, the law is silent as to whether the owner of such a mark can seek damages from third-party users.
The Supreme People's Court recently held a public hearing on the retrial of the administrative litigation concerning the refusal of Parfums Christian Dior's international 3D trademark application. The case was far from simple and raised several procedural issues, including with regard to the definition and publication of an application's subject matter, the consistency of examination criteria and the treatment of solely 3D marks.
The Paris Convention forms the cornerstone of China's legislative framework on the protection of commercial signs. This framework also comprises the new Anti-unfair Competition Law, which took effect in January 2018, and the Trademark Law, among others. This article analyses Article 59(3) of the Trademark Law and, by way of a comparison with the corresponding provisions of the new Anti-unfair Competition Law, examines how the new law will redefine the legal landscape for protecting commercial signs.
The new Anti-unfair Competition Law took effect in January 2018. As regards damages awards, Article 17 of the new law essentially follows the same calculation principles set out in the Trademark Law. Unfortunately, the new Anti-unfair Competition Law does not include the other modes of calculation provided for in the Trademark Law. In addition, the remedies granted by the Trademark Law and the Anti-unfair Competition Law with regard to unregistered trademarks are different.
The new Anti-unfair Competition Law took effect in January 2018. Although substantial changes were made concerning important issues such as the theft of trade secrets, as regards the principles set out in Article 10bis of the Paris Convention, most of the main concepts and principles of the original 1993 text were maintained. Article 9 of the 1993 law is one such article which remains largely unchanged, although some matters have been clarified, including with regard to misleading commercial publicity.
Article 6(1)(4) of the new Anti-unfair Competition Law prohibits a party from performing "other confusion acts that may mislead consumers to believe that its products are those of another person, or induce a special relationship with another person". This is a convenient fallback provision for IP rights holders which need protection in circumstances other than those explicitly listed in Article 6 of the law.
Article 6(1)(3) of the new Anti-unfair Competition law prohibits the unauthorised use of a website name, webpage or the main parts of a domain name with a certain level of influence. By way of an analysis of this provision from the perspective of Article 10bis of the Paris Convention and a comparison with the corresponding provisions of the Trademark Law, it is possible to examine how it will redefine the legal landscape for protecting commercial signs in China.
The legislature had been planning the recent amendments to the Anti-unfair Competition Law since China's accession to the World Trade Organisation. During the four drafts that followed, substantial changes were made concerning important issues such as conflict between company names, which may lead to confusion with regard to business entities.
The legislature recently made a number of amendments to the Anti-unfair Competition Law, which it had been planning since China's accession to the World Trade Organisation. One topic of discussion during the law's revision concerned the list of signs that cannot be copied, as requests were made to add a product's shape to this list. Further, the use of the word 'famous' with regard to trademarks came under intense debate during the revision process.
The legislature had been planning the recent amendments to the Anti-unfair Competition Law since China's accession to the World Trade Organisation. Although most of the main concepts and principles of the original 1993 text have been maintained, during the act's revision, Article 6 – which concerns misleading consumers and acts of confusion – was one of the most discussed provisions.
The legislature had been planning the recent amendments to the Anti-unfair Competition Law since China's accession to the World Trade Organisation. During the four drafts that followed, substantial changes were made concerning important issues such as the theft of trade secrets. However, as regards the principles set out in Article 10bis of the Paris Convention, most of the main concepts and principles of the original 1993 text have been maintained.
Sources indicate that the Beijing High Court recently released the Provisions on the Adjustment of the Courts' Jurisdiction over Civil IP Cases in Beijing. The new provisions outline the jurisdiction of the Beijing High Court, the Beijing IP Court and the lower-level Beijing courts and abolish the Provisions on the Jurisdiction over First-Instance Civil IP Disputes Heard by People's Courts at Various Levels in Beijing 2008.
The IP Rights Tribunal recently upheld its first-instance ruling in a decision over the manufacture and sale of counterfeit packaging for food seasoning. Highlighting the advantages of China's new three-in-one IP practice, the tribunal defined the boundary between 'counterfeiting registered trademarks' and 'selling illegally manufactured representations of registered trademarks' and identified the circumstances for complicity.
A recent trademark infringement case demonstrates that evidence of establishment and prior use of a business and trade name is sufficient against claims of similarity. This case analyses and clarifies the period and range of prior use, as well as the term 'certain influence', and serves as a point of reference for similar cases.
In an ongoing infringement and unfair competition dispute regarding the computer games World of Warcraft and Warcraft of the State, the Guangzhou IP Court recently granted an injunction to be enforced until the date on which the final judgment takes effect. The injunction prevents the operation and distribution of the defendants' computer game on the grounds that it would reduce market shares and harm the plaintiffs' business reputation.
The Beijing High People's Court recently upheld a decision to prohibit further production or distribution of a television series that was found to constitute copyright infringement. The decision highlights the purpose of the Copyright Law to protect original works and the judiciary's policy to enhance IP protection, after the court explained the methodology for finding 'material similarity' between literary works and instructed on differentiating an idea from an expression.
The Supreme People's Court recently determined that the naming of apartment blocks as 'Star River Garden' constituted infringement due to a likelihood of confusion. The court did not order a complete prohibition against use of 'Star River Garden', but ruled that buildings yet to be developed and sold must not use the name. The verdict protected the trademark owner's interests to the extent allowed by the law, while minimising the harm against the public interest.
The Shanghai High People's Court recently upheld a first-instance judgment dismissing an appeal to invalidate a conflicting exclusive trademark licence, despite finding that the defendant was not a third-party licensee acting in good faith. The court found insufficient evidence of conspiracy or intent to damage the claimant's interests and upheld the contractual right of both parties to use the disputed trademark.
The Beijing IP Court recently established an internal Speedy Trial Panel for administrative litigation cases concerning the review of trademark application refusals. Trademark applicants can now apply to the court for a summary procedure, which will halve their legal fees and allow them to adduce evidence at the court hearing. This procedure will greatly improve the court's trial efficiency, allow judges to gain a full understanding of a case's background and be more convenient for involved parties.
The Shanghai High People's Court recently issued a new regulation introducing some noteworthy changes regarding jurisdiction over civil IP cases in Shanghai. Under the new regulation, some high-level patent cases must bypass the first-instance jurisdiction of the IP courts and be heard directly by the high court. However, questions have arisen over whether this exception is compatible with the Supreme People's Court provisions on the IP courts' jurisdiction.
The State Administration for Industry and Commerce's Interim Measures for the Administration of the List of Businesses Seriously Violating the Law and Becoming Discredited recently took effect. Of the 10 circumstances listed in the interim measures in which a business can be deemed to have seriously violated the law, three pertain to trademark and unfair competition law. Blacklisted businesses will be a target for supervision and administration and will incur various penalties.
As in most countries, registration is the quickest and most cost-effective way to obtain trademark protection in China. However, a party may occasionally fail to register a trademark and another party may file or register the same trademark. If the owner of the unregistered trademark has no prior right that could invalidate the opposing trademark, there are still several options available.
After many years of accumulating knowledge, particularly since its economic liberalisation, China has established an effective legal system for the protection of trademark rights. Applicants and rights holders should ensure that they understand the issues and procedures involved, from registration to enforcement, ownership changes and rights transfers.
In the past 18 months China's IP stakeholders have witnessed a number of important developments, including the implementation of the new national IP strategy. The State Administration of Industry and Commerce and the Supreme Court have separately promulgated a number of trademark-related regulations and interpretations.