How to Protect Trademark Rights in China

BORSAM IP  ————————————————
Trademark Rights i.e. Trademark Exclusive Rights, it's a kind of qualification and ability of possessing, using, earning and handling of the trademark holder. Article 3 of Trademark Law of the People's Republic of China stipulated that a registered trademark, including a trademark for goods, a service mark, a collective mark and a certification mark, refers to a trademark that has been approved and registered by the Trademark Office. The trademark registrant shall enjoy the exclusive rights to use the mark, which shall be protected by law. There are two ways to obtain Trademark Exclusive Rights, one is original acquisition, the applicant obtain trademark exclusive rights after registration; another one is derivative acquisition such as assignment, license, pledge, inheritance, and combination or discrete of company.

There are three different ways of trademark rights protection in China

(1)Protection of judicial

In the event of any of the acts infringing upon the rights to exclusive use of a registered trademark, and a dispute arises accordingly, the parties shall negotiate to settle it. If any party refuses to negotiate or the negotiation has failed, the registrant of that trademark or the interested persons may bring a suit before a people's court. The people's court may protect the legitimate interests and rights of the exclusive user of a registered trademark through the adjudication procedures. And the article 57 under the latest Trademark Law stipulates that where a trademark registrant or any interested party submits evidence proving that another party is engaged in or will soon engage in actions that infringe upon its exclusive rights to use its registered trademark and that, unless they are stopped promptly, will cause irreparable injury to its legitimate rights and interests, the trademark registrant or the interested party may, before filing a lawsuit, apply to the People's Court for the granting of an injunction prohibiting the actions and protecting its assets, so the trademark registrant or any interested party may file application to court before litigation to stop the infringement of the exclusive rights to use a trademark or to preserve the evidence. In additional, during the execution of the ruling to stop related activities, another party may suffer bigger loss because of such measures and the court may demand the applicant to provide additional security. If no additional security is provided, the related injunction measures may be terminated. Article 56 under the Trademark Law has stipulations about the compensation criteria for a trademark infringement, the damages up to 500,000 yuan, and the Trademark Law is now under revision and based on the draft published at present, the upper limit for the statutory probably will be raised from five hundred thousand yuan to one million yuan.

Based on the Criminal Law rules, whoever forges or illegally produces the logo of other's registered trademark, or sell forged or illegally produces the logos of other's registered trademark, or shall be sentenced to a fixed-term imprisonment and concurrently imposed upon a pecuniary fine. 

(2)Protection of Customs

Customs protection is an important way to protect IP rights, as per Regulations of the People's Republic of China on the Protection of Intellectual Property Rights by Customs, protection for intellectual property rights by customs includes impounding of the will-be-imported or exported goods suspected of infringement, conducting investigation of the infringement, imposing penalty on the consignee or consignor, confiscating the infringing goods, disposing the infringing goods and etc. Among the measures, to detain the goods suspected of infringement is the most important step in intellectual property right protection by customs. At present, the customs can impound suspected infringing goods by application of the intellectual property rights owner and authority. But in practice, it's difficult to discover the clues by the owner of the IP rights and the customs is not responsible for the supervision of the goods suspected of infringing and can only impound the goods suspected of infringing by application, so it mainly depends on the customs to make the discovery with supervision. So we suggest that enterprises should get their intellectual property rights registered at customs. The record is under the principle of one application for one intellectual property right, and takes effect on the day when the General Administration of Customs approves the application for record and such record will be valid for at most ten years. 

(3)Administrative protection with Chinese characteristics

The administrations of industry and commerce have the authority to conduct investigation and seizure of the trademark infringing activities, which is one of the characteristics in Chinese system of trademark legal protection and is also an important means to attack infringement and to protect the legal rights. Most of the countries implement protection of the trademark by judiciary, but 90% of the Trademark infringement cases are investigated by the administrative enforcement department in China. When the infringement is discovered by the obligee or any other party, report may be filed to the administration of industry and commerce. The law has no strict procedures set for report but generally a report letter in writing together with the primary clues for the infringement and the right evidence of the obligee need to be submitted. As per Article 55 under Trademark Law, administrative authorities for industry and commerce at or above the county level in the place where the infringement takes place, exercise the power to investigate activities suspected of infringing upon another panty's exclusive right to use a registered trademark after it receives the report. As the administrative authority of industry and commerce's investigation and seizure is administrative law enforcement, the reporter does not need to pay any fee to the administrative authority of industry and commerce, but it only imposes penalty not responsible for compensation determination. 
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