Q3.How can rights holders take advantage of
these increased damages?
【Celia Y. Li】 In order to obtain more compensation in an infringement
lawsuit, the rights holder should pay attention to collecting the
day-to-day profits records ，which can be valuable proof of
actual loss due to the infringement. Proof of the infringer’s
profit obtained through infringing activities is also important,
which could be revealed through a well organized investigation,
even it can be extremely difficult sometimes.
In addition, because to the new Trademark Law adds “non-use
for three consecutive years” as a defense against
compensation claims, it is crucial to collect and retain proof of
use of your mark in the Chinese Market.
Furthermore, in trademark proceedings, the Warning Letter will be
take very important in the determination of
“bad-faith”, which could provide the rights holder
significant help in claiming punitive damages pursuant to Article
Q4.Does the trade mark law make it easier to get
evidence to support damages claims? If so, what are they and how
can rights holders use these provisions?
【Celia Y. Li】 No law can make it easier to get supporting evidence in
any proceedings in China. Instead, Instead, Article 63(3) of the
new Trademark Law rearranges the burden of proof when determining
compensation, which lessens the burden on the plaintiff and
transfer them partially to the defendant’s side if certain
specified requirements are satisfied.
The Chinese civil law system does not have a discovery process.
Therefore, it can be difficult for claimants to obtain proof of the
extent or scope of the defendant’s sales, the amount of its
profit and the plaintiff’s loss.
This issue is addressed to a certain extent in the New Trademark
Law by allowing for the courts to order infringers to produce books
of account and records in situations where the claimants are unable
to obtain sufficient evidence by its own efforts under Article
63(2) .In addition, if the defendant refuses to provide books of
account or provides falsified records, the court may make a
decision in reference to the evidence submitted by the
In this case, pre-litigation investigation will be much more
important in proving both the defendant’s profit and
plaintiff’s efforts at obtaining such evidence.
【Brandy Baker】 Getting evidence can be incredibly difficult given that
the burden of proof is largely placed on the plaintiff, however,
with the new amendments, the court will be able to play a larger
role in requiring production of evidence by the defendant in order
to determine damages. Where a defendant refuses to comply, the
courts are given a chance to even the playing field by giving more
weight to the plaintiff’s claimed damages. Further, the
courts will continue to assist in pre-litigation evidence
preservation, which also helps relieve the extreme difficulties
plaintiffs often face in evidence production.
Q5.Are there any provisions in the new
Trademark Law that deal with repeat offenders? How can rights
holders take advantage of these provisions?
【Celia Y. Li】 Under the old trademark law, the Administration of
Industry and Commerce (AIC) could only impose fines of no more than
three times the illegal operation amount. In cases where the amount
cannot be determined, the fine could not be over RMB100,000
The new Trademark Law grants the AIC a right to issue a more severe
punishment against infringers. Article 60 stipulates that the AIC
has the right to impose fines of no more than five times the
illegal operation amount where the amount is over RMB50,000. In
cases where the amount is less than RMB50,000 or cannot be
determined, the fine is capped at RMB250,000.
More significantly, an infringer who has been punished by the
relevant AIC twice within 5 years will receive heavier
Even though the right holder cannot obtain any compensation from an
AIC action, the favorable administrative decision issued by AIC
will be considered as very solid evidence in the related judicial
proceedings. Furthermore, decisions against repeat offenders may
act as a nuclear weapon in proving the infringer’s bad faith,
which may lead to a punitive damages judgement.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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