Trademark Disputes

• Laws:
• • The Trademark Law (2019 amendment).
• Administrative regulations:
• • The Implementing Regulation of the Trademark Law (2014 amendment).
• Departmental regulations:
• • The Guidelines for Trademark Examination;
  • The Provisions on Registration and Management of Collective Marks and Certification Marks;
  • The Standards on Determination of Trademark Infringement; and
  • The Standards on Determination on General Trademark Illegality.
• Judicial interpretations:
• • The Supreme People’s Court Provisions on Issues in the Trial of Administrative Cases of Trademark Authorisation and Right Confirmation (2020 amendment);
  • The Supreme People’s Court Interpretation on Issues Concerning the Law Application in the Trial of Cases of Trademark Civil Disputes (2020 amendment);
  • The Supreme People’s Court Interpretation on the Jurisdiction and Law Application Scope Issues in the Trial of Trademark Cases (2020 amendment);
  • The Supreme People’s Court Interpretations on Issues Concerning the Law Application in the Trial of Civil Dispute Cases involving the Protection of Well-known Trademarks (2020 amendment); and
  • The Supreme People’s Court Provisions on Issues in the Trial of Civil Disputes Cases of Registered Trademarks, Enterprise Names and Prior Rights Conflicts (2020 amendment).

In addition to the abovementioned laws and regulations, which are applicable nationwide, local regulations, autonomous regulations and special regulations issued by various localities can also be cited in trademark litigation.

China is a party to the following multilateral treaties related to trademark litigation:

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

In China, the Standing Committee of the National People’s Congress is responsible for interpreting laws if the law is ambiguous per se. The Supreme People’s Court and the Supreme People’s Procuratorate can also provide judicial interpretations regarding trademark laws for matters relating to the application of laws.

The following agencies are responsible for enforcing the trademark laws:

• Courts: The local IP courts and district courts adjudicate trademark civil litigation. The Beijing IP Court and the Beijing High People’s Court handle administrative cases against decisions of the China National Intellectual Property Administration (CNIPA), while the Supreme People’s Court hears retrials.
• CNIPA and State Administration for Market Regulation: Both agencies work under the State Council. The former guides trademark law enforcement and manages registrations and disputes, while the latter investigates and penalises trademark infringements.
• Local IP and market regulation offices: These collaborate with national agencies to enforce against trademark infringers within their respective regions.

According to the Supreme People’s Court’s Interpretation on Jurisdiction and Law Application in Trademark Cases (revised in 2020) and prevailing judicial practices, jurisdiction for trademark litigation in China is structured as follows:

• Civil trademark litigation: Ordinary trademark civil cases are typically under the jurisdiction of local courts at first instance, with intermediate courts handling the second instance.
• Trademark prosecution: The Beijing IP Court handles the first instance of trademark administrative cases, while the Beijing High People’s Court addresses the second instance.

In summary, local courts generally determine trademark infringement, whereas the validity of trademarks is adjudicated by the Beijing IP Court and higher courts. However, if a trademark infringement case arises in Beijing, the jurisdictions of these courts may overlap.

• Summary procedures: Trademark administrative or civil litigation cases that qualify for summary procedures may be heard by a single judicial officer (a single judge).
• Ordinary procedures and complex cases: Cases that follow ordinary procedures or are deemed complex must be heard by a collegial panel. This panel may consist of judges or a combination of judges and people’s jurors, with a judge serving as the presiding officer. The panel must have an odd number of members, typically three, but may comprise five or more in complex cases.

According to the Civil Procedure Law, jurisdiction for trademark cases can typically be determined based on the following criteria:

• Domicile of the defendant: For both trademark infringement cases and contract disputes, the defendant’s domicile usually serves as the effective jurisdiction. If multiple defendants are involved, the domicile of any one defendant may be considered the jurisdictional venue.
• Place of performance of the contract: Jurisdiction can also be based on where the contract is performed. Additionally, the parties may negotiate and agree on a competent court in the contract.
• Place of infringement: In trademark infringement cases, jurisdiction may also be established based on the place of the infringement. This includes the location where:
• • the infringement occurred;
  • infringing goods are stored; or
  • goods are seized.

According to Article 60 of the Trademark Law, both the trademark owner and interested parties are entitled to file litigation. Interested parties generally include licensees and rightful heirs. Notably:

• Exclusive licensees can file an action independently;
• Sole licensees may file an action jointly with the trademark owner or independently if the registrant does not initiate litigation; and
• Non-exclusive licensees can file an action only with clear authorisation from the trademark owner.

Yes, it is possible to file a trademark infringement lawsuit in China against a foreign entity that resides or operates outside the country, based on a trademark or international trademark that has been registered in China. An appropriate connection between the dispute and China is required, which may include the following:

• Place of infringement: The infringement has occurred in China.
• Contractual agreement: There is a contract between the parties specifying that China has jurisdiction over trademark disputes.
• Domicile of other defendants: At least one defendant is domiciled in China.

Yes, a trademark infringement lawsuit can proceed under the following conditions:

• Same subject matter: The litigation must involve the same trademark rights, similar legal facts or identical claims from the trademark owner against multiple defendants.
• Connection between defendants: There should be a clear connection between the defendants, such as causing the same damage or engaging in joint infringement.

Yes. Pursuant to Article 49(2) of the Trademark Law, any entity or individual can file a cancellation action against a registered trademark with the China National Intellectual Property Administration (CNIPA) on the following grounds:

• The registered trademark has become a general name for the claimed goods; or
• There has been non-use of the trademark for three consecutive years without a valid reason.

To seek cancellation, the following procedural requirements also apply:

• The application for cancellation must be filed at least three years after the date of expiry of the refusal for the trademark application; or
• If the trademark is still undergoing procedures of refusal review or opposition upon the expiry of the refusal period, the action must be filed at least three years after the effective date of the decision to approve the trademark registration made by the CNIPA.

A third party can file a lawsuit with the court for a declaration of non-infringement. Generally, the following conditions must be met:

• The trademark owner must have issued an infringement warning;
• The warned party or its interested party must have sent a written letter to the trademark owner requesting it to withdraw the warning or file a lawsuit; and
• The trademark owner must not have withdrawn the warning within a reasonable period or filed a lawsuit.

A third party is also entitled to file a trademark invalidation based on either absolute or relative grounds in China. Specifically, absolute grounds include, but are not limited to, the following:

• The mark lacks distinctiveness (Article 11);
• The mark:
• • is identical or similar to the name of an administrative division (county level or above) or a foreign administrative division known to the public;
  • is deceptive in a way that may mislead the public regarding the quality or place of origin of the goods;
  • is harmful to socialist morality; or
  • may cause other adverse effects (Article 10);
• The mark was registered in bad faith or not for the purpose of use (Article 4); or
• The mark was registered through deception or improper means (Article 44(1)).

Relative grounds include, but are not limited to, the following:

• The mark infringes a third-party trade name, copyright or other prior interests (Article 32);
• There has been trademark squatting by the agent or malicious squatting of an unregistered trademark previously used by others (Article 15);
• A similar trademark has been registered for similar goods or services (Articles 30 and 31); or
• The mark is a copy, imitation or duplication of a well-known trademark in China (Article 13).

According to Article 57 of the Trademark Law, the following acts constitute trademark infringement:

• Using a trademark that is identical to a registered trademark for identical goods without authorisation from the trademark owner;
• Using a trademark that is similar to a registered trademark for identical goods or using a trademark that is identical or similar to a registered trademark for similar goods without authorisation from the trademark owner in a way which may easily cause confusion;
• Selling goods which infringe the right to exclusively use a registered trademark;
• Forging or manufacturing the labels of a registered trademark of other parties without authorisation or selling the forged or manufactured labels of a registered trademark without authorisation;
• Replacing a registered trademark without authorisation from the trademark owner and putting the goods with a substituted trademark on the market;
• Intentionally facilitating the infringement of a third party’s exclusive trademark rights or aiding others in infringing a third party’s trademark rights; and
• Otherwise causing damage to a third party’s exclusive trademark right.

First, the court should determine whether the alleged infringement constitutes trademark use as stipulated by the Trademark Law. In doing so, it will consider whether the mark:

• serves to identify the source of goods or services;
• is objectively presented on tangible carriers, such as goods and their packaging;
• is targeted at the relevant public; and
• is not descriptive or indicative of use.

The court will then consider whether:

• the alleged infringing trademark is identical or similar to the prior trademark cited by the trademark owner; and
• the two marks are used for identical or similar goods.

Generally, the court will consider the similarity of the trademarks based on aspects such as:

• character/letter composition;
• pronunciation;
• meaning;
• overall appearance; and
• visual effect.

In terms of the determination of identical or similar goods, the court will refer to the China National Intellectual Property Administration’s Classification and consider the following aspects in relation to both parties’ marks:

• function;
• use;
• production sector;
• consumers;
• sales channels or service purpose;
• content;
• method;
• place; and
• provider of the goods or services.

Finally, the court will assess the possibility of consumer confusion - that is, whether the evidence at issue is sufficient to cause the relevant public to believe that the alleged infringing goods or services:

• are produced or provided by the trademark owner; or
• have a specific relationship with the trademark owner.

The fame of the mark and the infringer’s bad faith are further factors to be considered by the court in determining infringement.

Yes. Although wilfulness is not a necessary condition for a finding of trademark infringement, it is one of the elements for the application of punitive damages. Under normal circumstances, an infringer may be deemed to have committed intentional infringement if it:

• clearly knew of the existence of a third party’s prior trademarks and that its acts would infringe that third party’s rights; and
• nonetheless undertook the infringing activities or allowed the infringement to occur.

Common scenarios include, but are not limited to, the following:

• The infringer or its related party is the legal representative, manager or actual controller of the trademark owner or interested party;
• The infringer knew of a third-party’s prior trademark rights (eg, through a labour, cooperation, licensing, distribution, agency, representative, business dealing or negotiation relationship with the trademark owner or interested party) and still committed the infringing activities;
• The infringement was committed after the infringer had been notified or warned by the trademark owner or interested party, or by the IP administrative offices, due to the production and sale of infringing goods, but still continued the infringing activities;
• The infringer committed acts of piracy or counterfeiting of a registered trademark;
• There has been bad-faith squatting and use of a third party’s well-known trademark or use of a third party’s well-known trademark on identical or similar goods;
• The infringer covered or removed a third party’s registered mark when advertising or providing infringing goods or services; or
• The infringer continued the infringing activities/marks after an improperly acquired trademark was cancelled or invalidated and its activities were affirmed as infringing.

In China, trademark owners can take the following measures:

• Administrative complaint: The trademark owner can file complaints and reports with Market Supervision Administration, Customs and similar bodies, requesting an investigation of the infringement.
• Civil litigation: The trademark owner can file a civil lawsuit and request the infringer to bear civil liabilities such as:
• • cessation of infringement; and
  • compensation for losses.
• Criminal actions: If a crime is suspected, a report can also be made to the Public Security Bureau.

The limitation period for bringing a trademark infringement claim is three years, starting from the date on which the trademark owner or interested party knew or should have known of the infringing act. If the trademark owner or interested party files a lawsuit after more than three years, but the infringement is still ongoing at the time of filing, and this is within the validity period of the exclusive right to use the registered trademark:

• The court will order the defendant to cease the infringement; and
• The amount of compensation for infringement damages will be calculated by counting back three years from the date on which the trademark owner filed a lawsuit with the court.

Normally, trademark owners need not notify the alleged infringers in advance before filing civil lawsuits for trademark infringement.

The procedural and substantive requirements for bringing a claim for trademark infringement include the following:

• The plaintiff should be a trademark owner or an interested party;
• There should be a clear defendant;
• There should be specific litigation claims, facts and reasons; and
• The lawsuit should be filed with a court with jurisdiction.

The complaint should provide details of:

• Ownership of the trademark;
• Specific infringing acts; and
• The losses caused to the trademark owner by the infringing acts.

The level of detail in the complaint should at least enable the court to clearly understand:

• The basic facts of the case; and
• The focus of the dispute.

Yes, interim remedies such as the following are available in China:

• Pre-litigation injunctions;
• Pre-litigation property preservation; and
• evidence preservation.

Trademark owners can file an application for interim measures with a court with jurisdiction, which will review the application and decide whether to take measures according to the specific circumstances. Interim measures are usually issued in the form of rulings.

Relevant legal provisions: Under Article 65 of the Trademark Law, if a trademark owner or interested party has evidence to prove that others are acting or about to act in a way that is infringing or will infringe its exclusive right to use its registered trademark, and that its legitimate rights and interests will suffer irreparable damage if they are not stopped in time, they may, in accordance with the law, apply to the people’s court for measures to order the cessation of relevant acts and property preservation before filing a lawsuit. Article 66 of the stipulates that in order to stop infringing acts in cases where evidence may be lost or difficult to obtain in the future, trademark owners or interested parties may, in accordance with the law, apply to the people’s court for the preservation of evidence before filing a lawsuit.

Under normal circumstances, there is no need to provide security for the other party’s litigation costs and compensation for losses. However, if the applicant applies for pre-litigation injunction, security must be provided in accordance with the law.

Relevant judicial interpretations: Article 11 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law in Examining Cases of Behavioural Preservation in IP Disputes provides that where an applicant applies for behavioural preservation, it must provide security in accordance with the law.

In legal procedures such as trademark infringement litigation, parties must truthfully provide evidence and information relating to the case. Generally, parties should submit evidentiary materials and conduct evidence disclosure within the prescribed timeframe according to the court’s requirements. Where content involves state secrets, trade secrets and personal privacy, disclosure can be omitted under certain conditions which constitute exceptional cases.

In trademark infringement litigation, the court may, if necessary, upon request by a party or ex officio, require relevant third parties to provide evidentiary materials related to the case. For example, the court can, upon application by a party, obtain sales data of infringing goods held by third-party e-commerce platforms (eg, Taobao or Pinduoduo). However, if the evidence provided by a third party involves trade secrets or other content that must be kept confidential as stipulated by law, it may not be disclosed after examination by the court.

Under Chinese law, the rules on privilege mainly relate to attorney-client privilege. Attorneys must safeguard the personal privacy of clients and keep confidential trade secrets learned in the course of representing them. However, if major illegal and criminal acts involving national security or public safety are involved, there may be exceptional cases in which the confidentiality privilege no longer applies.

Relevant legal provisions: Article 38 of the Lawyers Law stipulates that lawyers must:

• keep confidential state secrets and trade secrets learned in the course of their practice;
• safeguard the privacy of clients; and
• keep confidential circumstances and information learned in the course of their practice that clients and others do not wish to disclose.

However, exceptions apply to criminal facts and information if the client or others are preparing for or undertaking acts that could endanger:

• national security;
• public safety; or
• the personal safety of others.

In trademark infringement litigation, the trademark owner typically collects evidence independently, such as notarising and preserving:

• acts of infringement; and
• purchases of infringing products.

If the trademark owner cannot gather evidence for objective reasons, it may apply in writing to the people’s court for assistance. Evidence can be submitted:

• at the time of filing the lawsuit; or
• before the court-designated evidentiary period ends.

The evidence requested for court investigation must be:

• significant to the case; and
• genuinely difficult for the parties to collect independently.

This may include:

• evidence preserved by state departments that parties cannot access;
• evidence involving state secrets, trade secrets or personal privacy; or
• other information that parties cannot gather for objective reasons.

According to Article 67 of the Civil Procedure Law, parties are responsible for providing evidence for their claims. If they cannot do so for objective reasons, or if the court deems it necessary, the court will investigate and collect evidence. The court must examine and verify all evidence comprehensively and objectively, following legal procedures.

Under Article 66 of the Civil Procedure Law, the following types of evidence are allowed:

• statements of the parties;
• documentary evidence such as trademark registration certificates and contracts;
• physical evidence such as infringing products;
• audiovisual materials;
• electronic data such as transaction records and chat records;
• witness testimony;
• verification; and
• inspection records.

Expert discussion opinions and market survey reports are not statutory types of evidence but are usually accepted in trademark infringement litigation. Expert discussion opinions are mainly adopted where technical issues are involved. Survey reports may also play a role in some complex infringement cases. In general, since expert discussion opinions and surveys involve additional costs, they are rarely submitted in normal civil cases. However, in complex and major cases, they are often submitted as evidence.

Evidence in criminal proceedings can be used in civil proceedings and vice versa. In different procedures, the probative force of evidence may be examined and judged according to specific circumstances. For example, in criminal trademark cases, the determination of the illegal profits of criminal suspects will be relatively strict; but in civil trademark litigation, the determination of the defendant’s profits will be relatively lenient.

In China, the standard of proof in civil action is a preponderance of the evidence. Where reasonable doubt cannot be excluded, the judge will make a comprehensive judgment based on the existing evidence. If the probative force of the evidence provided by one party is significantly greater than that of the other party, the existence of the relevant facts can be determined.

Relevant judicial interpretations: Under Article 108(1) of the Interpretation of the Supreme People’s Court on the Application of the Civil Procedure Law, where the people’s court reviews evidence provided by the party with the burden of proof and is convinced that the existence of the facts to be proved has a high degree of probability, the existence of these facts should be determined.

Normally, the plaintiff bears the burden of proving that:

• it is the trademark owner or an interested party;
• the defendant has committed an infringing act; and
• it has suffered losses.

However, in some cases - such as when the defendant claims the legitimate source defence (see question 8.1) - the defendant also bears the corresponding burden of proof.

• Non-infringement:
• • The alleged infringing mark is not similar to the trademark owner’s registered trademark; and/or
  • The designated goods or services are not similar and will not lead to confusion.
• Descriptive use: The alleged infringer’s use of the trademark:
• • is merely descriptive or indicative use, not trademark use; and
  • does not indicate the source of production.
• This defence requires proof that the user’s act:
• • is subjectively a bona fide use which is not intended to exploit the reputation of the trademark owner; and
  • objectively will not cause confusion among the relevant public as to the source of the goods or services.
• Defence of legitimate source: The defendant:
• • sold the goods without being aware that this infringed the exclusive right to use a registered trademark; and
  • can demonstrate that the goods were legally obtained and indicate the provider.
• Defence of prior use:
• • There was an act of prior use of the trademark prior to the filing date of the registered trademark;
  • This act of prior use preceded the use of the trademark by the trademark owner and was in good faith; and
  • The prior used trademark has already had a certain impact.
• In such cases the defendant can continue to use the mark within the original scope.

A defendant may file for cancellation or invalidation of the trademark held by the trademark owner in order to contest its validity. These applications are adjudicated by the China National Intellectual Property Administration (CNIPA), which assesses whether there are sufficient grounds for cancellation or invalidation. Defendants cannot directly file these applications with a court. If such counterclaim is filed with the CNIPA, the court will determine whether it is appropriate to suspend the civil litigation.

The basis for a defendant’s application for cancellation is usually that the trademark owner has not used the trademark for three consecutive years after registration.

With respect to invalidation, defendants may rely on either relative or absolute grounds to seek invalidation of the trademark owner’s trademark. Absolute grounds include, but are not limited to:

• Lack of distinctiveness (Article 11 of the Trademark Law);
• Violations of prohibited provisions (Article 10 of the Trademark Law); and
• Registration of the mark through deceitful or improper means (Articles 4 and 44.1 of the Trademark Law).

Relative grounds include:

• Conflicts with prior rights and interests such as trade names and copyrights (Article 32 of the Trademark Law);
• Malicious prior registration or an agent’s prior registration of trademarks previously used by the defendant (Articles 15 and 32); and
• Similarities between the trademark owner’s trademark and the defendant’s earlier registered trademark (Articles 30 and 31).

In relation to parallel imports, particularly in cross-border e-commerce, if the infringing goods imported into China were sourced from the trademark owner or an entity officially authorised by the trademark owner, then - due to the principle of exhaustion of rights - the trademark owner or its authorised representative in China typically cannot assert that such parallel import activities constitute trademark infringement based solely on its valid trademark rights.

However, this does not imply that parallel imports are completely unrestricted or unregulated. Importers must still adhere to relevant Chinese laws and regulations, including:

• Customs declarations;
• Tax obligations; and
• Commodity quality control standards.

Concurrently, trademark owners can protect their legitimate rights and interests through alternative means, such as:

• Contractual agreements;
• Patent protection; and
• Claims of unfair competition.

In China, mediation is not mandated by the court. However, to encourage prompt resolution of disputes and minimise the costs and duration of litigation, courts will often recommend that parties engage in mediation prior to initiating litigation.

In practice, particularly in trademark infringement cases, the court will inquire about both parties’ willingness to mediate, whether before or during the litigation proceedings. If the disputes involve e-commerce platforms such as JD.com or Alibaba and the plaintiff opts to file a lawsuit in the jurisdiction where the platform is located, these courts will establish pre-litigation mediation procedures in which mediators facilitate discussions between the two parties. If the parties fail to reach an agreement through mediation, the case will then proceed to formal litigation.

Yes. If the parties are engaged in settlement negotiations, they can apply to the court for a suspension of the litigation procedure.

Usually, the court will be more inclined to respect the choice of the parties and give them a reasonable timeframe to attempt to reach a settlement. However, if the settlement period between the parties is too long and the possibility of success is low, the court will continue the litigation process.

Unlike the settlement process in the United States, in China, settlement between disputing parties during litigation is primarily conducted under the guidance of the trial judge. The court prepares a settlement statement and serves it on both parties. This settlement statement has the same legal effect as a judgment, requiring both parties to fulfil their obligations as outlined. If one party fails to comply, the other may apply to the court for enforcement.

Of course, the parties may also reach a private settlement; but to ensure the legality and effectiveness of the settlement, they can:

• apply to withdraw the lawsuit; or
• request that the court issue a settlement statement to confirm the settlement agreement.

This process affords stronger legal protection to the settlement outcome. Furthermore, parties have the right not to disclose sensitive information such as trade secrets potentially involved in the settlement agreement to the court.

In China, trademark litigation is generally conducted in public. However, where a case involves trade secrets or other confidential information, the parties may take the following measures:

• Application for a closed trial: During the litigation, parties can petition the court for a closed trial in cases involving trade secrets. Pursuant to the Civil Procedure Law, if such an application is made and is deemed appropriate by the court, it may decide to conduct a closed trial.
• Execution of confidentiality agreements: Throughout the submission of evidence and the court hearings, if trade secrets or other sensitive information are at stake, the court may require pertinent participants in the litigation to sign confidentiality agreements pledging not to disclose any related information.
• Restricted access: The parties also have the option to apply for limitations on access to confidential information, ensuring that only essential individuals can view this data. Upon review, should the court find it necessary, it will grant this request.
• Technical safeguards: In certain high-tech courtroom environments, courts may utilise technical measures to protect trade secret confidentiality, such as:
• • implementing password-protected electronic devices; and
  • restricting network access.

Yes, a trademark owner in China can sue for infringement and passing off in the same action. This can streamline the legal process and address related violations simultaneously.

In China, the main steps involved in trademark infringement proceedings are as follows:

• Preparation: Gather evidence and compile litigation materials.
• Filing of the lawsuit: Submit the complaint along with supporting evidence to the court.
• Court trial: Engage in the court trial, including debates and cross-examinations. Mediation may also be pursued as an alternative dispute resolution method.
• Judgment: The court issues its ruling.
• Enforcement: Fulfil obligations in accordance with the judgment.

Trademark infringement litigation and invalidation are two relatively independent processes. In infringement cases, defendants may assert trademark invalidation as a defensive strategy; however, this procedure must be initiated with the China National Intellectual Property Administration (CNIPA) and cannot be directly presented before the court handling the infringement case.

The primary steps for invalidation are as follows:

• Filing of a request: File an application for invalidation with the CNIPA along with relevant evidence.
• Examination: The CNIPA conducts both formal and substantive examinations of the request.
• Ruling: The CNIPA issues a decision either maintaining or invalidating the trademark registration.
• Judicial relief: If dissatisfied with the CNIPA’s ruling, a party can appeal to the Beijing IP Court.

In principle, the Chinese courts have a six-month limit to hear first-instance civil cases under ordinary procedures, while second-instance cases are typically subject to a three-month time limit. Extensions may be granted under special circumstances with the approval of the relevant departments. However, in practice, timelines often vary due to factors such as:

• Difficulties in serving defendants;
• The complexity of the case; and
• The overall caseload of the courts.

Additionally, trial durations differ across regions: courts located near major e-commerce platforms (eg, Zhejiang and Shanghai) tend have higher caseloads than those in less populated areas, which slows down the process.

There is no fast-track procedure in trademark infringement litigation. However, the court may expedite specific cases under certain conditions, such as where:

• The facts are clear; or
• The matter is significantly urgent.

With respect to the trademark validity procedures outlined in the Trademark Law, it generally takes between 12 and 18 months from filing of an application to receipt of a decision. If a party is not satisfied with the CNIPA’s decision, it may file an appeal with the Beijing IP Court within 30 days of receipt of the decision. A second-instance appeal or retrial may follow if necessary. Therefore, cases brought before the courts may take between one and several years.

Yes. According to the Summary of Judgments of the IP Tribunal of the Supreme People’s Court (2020), on receiving an application for an extraterritorial injunction to prohibit the enforcement of a foreign judgment, the people’s courts should make a decision based on a comprehensive consideration of whether:

• the respondent’s application for enforcement of the foreign judgment will have a significant impact on the conduct and enforcement of Chinese litigation;
• the issuance of preservation measures is really necessary;
• the harm that would be caused to the applicant by not issuing such measures would exceed the harm caused to the respondent by issuing those measures;
• the issue of such measures would harm the public interest;
• the issue of such measures would be consistent with the principle of international comity; and
• any other factors should be taken into consideration.

In practice, relatively few cases involve foreign-related extraterritorial injunctions.

The Chinese courts have also issued foreign-related extraterritorial injunctions, such as in the dispute between Huawei Technologies Co, Ltd and its affiliates and Conversant Wireless Licensing SARL over confirmation of non-infringement of patent rights and standard-essential patent licensing. These injunctions are interim, not permanent.

The decisions of national or foreign courts and bodies may be considered by the Chinese courts, but their influence is usually limited. The Chinese courts will primarily follow Chinese laws and judicial interpretations to ensure judicial fairness.

In cases involving well-known trademarks, evidence of recognition as a well-known trademark from abroad can serve as strong proof of the well-known status of the trademark. As a trend, the influence of foreign decisions should increase in future along with global integration.

In China, four types of remedies are available for trademark owners:

• Self-help remedies: These include:
• • entering into negotiations;
  • sending a cease and desist letter to the infringer; and
  • filing complaints with platforms.
• Administrative remedies: These include reporting or complaining to:
• • the Market Supervision Administration;
  • public security agencies; or
  • Customs.
• Judicial remedies: These encompass:
• • civil litigation; and
  • criminal prosecution.
• Mediation and arbitration: These are pursued through third-party organisations.

Yes, punitive damages are available in case of intentional infringement that is particularly severe, such as repeated infringement or engaging in IP infringement as a business, as specified in judicial interpretations. The calculation method generally starts with a baseline determined by:

• the defendant’s profits;
• the plaintiff’s losses; or
• a multiple of the licensing fee.

The amount of punitive damages is then set at between one and five times this baseline.

Article 63 of the Trademark Law stipulates that the amount of compensation for infringement of exclusive trademark rights is calculated based on:

• the plaintiff’s actual losses;
• the defendant’s profits from the infringement; or
• a multiple of the trademark licensing fee.

If none of these amounts can be determined, the court will apply statutory compensation at its discretion. In determining statutory compensation, the court primarily considers factors such as:

• the sales volume of the allegedly infringing products;
• the popularity of the trademark;
• the defendant’s malice;
• the methods used in the infringement;
• the frequency and duration of the infringement; and
• the resulting damages caused by the infringement.

China adopts a two-tier court procedure, allowing any party to appeal if it does not accept the first-instance judgment or ruling. To initiate an appeal, the concerned party must submit an appeal to a higher court and pay the applicable fee within the statutory time limit. The grounds for appeal include:

• incorrect or unclear findings of fact;
• erroneous application of the law; or
• procedural irregularities.

Once the appeal has been accepted, the case proceeds to the second instance.

Additionally, if a party believes that a legally effective judgment or ruling is incorrect, it can apply to a higher court for a retrial. If multiple parties are involved or both parties are citizens, they may also apply to the court of first instance for a retrial. The statutory time limit for filing a retrial application is six months from when the judgment or ruling becomes effective.

However, under certain circumstances, such as the following, the time limit is extended to six months from the date on which the parties become aware of these issues:

• the emergence of new evidence;
• the discovery that key evidence in the original judgment was fabricated;
• revocation or alteration of the legal documents on which the original judgment was based; or
• judicial misconduct, including corruption or bribery.

In China, the statutory trial timeframes at first instance, second instance and retrial of civil cases can be summarised as follows:

• First instance (summary procedure): Six months.
• First instance (summary procedure): Three months, which may not be extended.
• Second instance (verdict closed): Three months.
• Second instance (ruling closed): Thirty days, which cannot be extended.
• Retrial: Three months.

These timeframes start to run from the date on which the court accepts the case. The above timeframes are a general situation stipulated by law and the actual timeframes will be affected by many factors, including, but not limited to:

• the complexity of the case;
• the difficulty of collecting evidence;
• any application for an extension by the parties; and
• the workload of the court.

The actual timeframes for different cases vary significantly.

The costs and expenses arising from litigation in China mainly include the following:

• litigation expenses - that is, the expenses that the parties must pay according to law when they bring a lawsuit to the court, including primarily:
• • the case acceptance fee;
  • property preservation fees;
  • enforcement fees; and
  • attorneys’ fees; and
• other expenses, such as:
• • appraisal fees;
  • evaluation fees;
  • translation fees; and
  • announcement fees.

In general, the litigation costs are borne by the losing party. In IP cases, the parties will generally take the attorneys’ fees, appraisal fees, evaluation fees, translation fees and so on as reasonable expenses and advocate that the other party bear them. The court will generally order the losing party to bear all or some of such reasonable expenses at its discretion.

In addition to the common way of charging by time spent and by the subject matter of the case, fixed fees, phased fees and contingency fees (risk agency) are allowed. Contingency fees are usually associated with the winning amount or settlement amount of the case.

Some investment institutions have begun to enter this field in China, providing financing services for parties that need financial support for litigation. However, China has not yet issued any special laws or regulations on third-party litigation funding.

At present, there is still considerable controversy about third-party litigation funding in China. Some courts hold that the agreements involved in this system allow funders to exert control over the litigation, which may undermine the basis of litigation and the public principle of justice, and thus consider such agreements invalid. However, others take the view that, from a comparative law perspective, third-party litigation funding plays an active role in promoting justice and reducing litigation costs for the parties, and should thus be standardised and promoted in China. It would appear that there is significant potential for developments in this space.

Although China adopts a ‘first to file, first in right’ system, some protection is still available for unregistered trademarks that are in use and have gained a certain influence, mainly in the following respects:

• If an unregistered trademark has already been used and has gained a certain influence, it can be used to defend against malicious cybersquatting according to the Trademark Law.
• If an unregistered trademark has achieved well-known status in China, the owner can prevent others from registering or using an identical or similar trademark for identical or similar goods.
• If an unregistered trademark has been used in advance and has gained a certain influence, the exclusive owner of another registered trademark has no right to prohibit the owner of the unregistered trademark from continuing to use the unregistered trademark within the scope of the goods or services for which it was originally used; although the owner may be required to attach an appropriate distinguishing mark to its goods or services.

There is no essential difference between the protection of foreign unregistered trademarks and Chinese unregistered trademarks in China. If the owner of a foreign unregistered trademark can prove that any of the following circumstances exist in the Chinese market, this can be used as a basis for rights protection:

• The trademark has been used in advance and has gained a certain influence - in which case:
• • the trademark can be enforced against bad-faith filers according to the Trademark Law; and
  • the exclusive owner of another registered trademark has no right to prohibit the owner of the unregistered trademark from continuing to use the unregistered trademark within the scope of the goods or services for which it was originally used; although the owner may be required to attach an appropriate distinguishing mark to its goods or services; or
• The trademark is well known in China - in which case others can be prevented from registering or using an identical or similar trademark for identical or similar goods.

The prevailing trends in China include the following:

• An increasing number of trademark owners are seeking to hold platforms accountable rather than targeting individual sellers. There have already been cases that have surpassed the safe harbour principle, establishing the liability of a platform for aiding infringement.
• However, suing e-commerce platforms has become more challenging than in the past, with stricter filing requirements and longer trial periods due to the high volume of cases, prompting more trademark owners to consider other jurisdictional connections.
• New types of evidence, such as market surveys, are increasingly being accepted by the Chinese courts in trademark infringement cases.
• While statutory damages exist, the criteria for the application of punitive damages in trademark infringement cases are stringent and this remains relatively rare in practice.
• Trademark owners are increasingly pursuing a combination of criminal and civil actions to combat counterfeiting.

In the next 12 months, we anticipate that more courts will hold sellers liable for the faked transaction records. Some courts even may impose a higher liability on sellers that have forged their sales figures.

Recommendations:

• Online evidence preservation software can be used to save time and costs.
• In cases where online stores involve multiple manufacturers, it is advisable to conduct test purchases in advance in order to ascertain the infringing amount that each manufacturer shall bear.
• In addition to suing e-commerce platforms to establish jurisdiction, consider leveraging defendants’ purchase of bidding ads on search engines or promotional activities on other media platforms to attempt to establish jurisdiction.

Potential pitfalls:

• Some platforms – such as Pinduoduo, 1688 and Weidian – have serious issues with fake transactions, making it difficult to accurately estimate actual sales.
• Platforms such as WeChat mini-programs and WeChat photo albums do not display sales figures, making it hard to prove actual sales.
• Sales figures from infringement links that are not notarised may not be recognised.