Legal Actions Against Trademark Infringements in China

If a trademark owner’s rights are infringed
in China there’s usually three ways that we recommend taking: one is a cease and desist
letter, this is usually a demand letter – I’ll explain further what that is; the second is
administration enforcement; and third is judicial action. Cease and desist letter, a C&D letter,
or a demand letter – it depends on whoever calls it – is a letter that you send to
the infringer, usually demanding the infringer immediately stop the infringement. So it’s
pretty much you’re asking him or her ‘stop what you’re doing or else we’ll pursue
further actions’. And what we usually put in the letter is the further actions, usually
administration enforcement or judicial action – which I’ll explain just now.
The second one is administration enforcement. This is usually done with the local AICs – the
Administration for Industry and Commerce – and this is usually done if you file a complaint
with administration enforcement. And then if the AICs accept it they will issue a decision
and tell the infringer to stop infringement, and they can usually post a fine. So here
I use ‘fine’ not ‘damages’ – it’s slightly different. This fine can be interpreted
two ways. One way is the fine will go to the government, because they violated the law
and the government is going to punish them, so that’s the fine. And usually you can
also get damages if both parties will take mediation done by the AIC, because that’s
the only thing they can do; they don’t have the power to grant damages. But they can do
mediation and through that mediation you can request for damages to be settled. If that’s
settled then you can get money back, but if that’s not then you don’t get it. And
then usually if you don’t get it, you can appeal. Or if the infringer happens to not
like that decision, not like the mediation, he can also appeal. So the AIC, administration
enforcement, is good but you know it has a downside to it; it can be appealed to the
courts. A third way you can do is judicial actions.
Judicial action means filing a lawsuit. One very important thing with judicial action
is you have to pick a venue. You know what venue means? Venue usually means a place where
the court sits; a place where the court locates. That’s very important because as you might
have heard, there’s favouritism going on in local courts. I think that’s the same
throughout the world, I mean, you know if some foreigner is trying to file a case in
a small little court in some remote places then that court will usually have some favouritism
going on. That aside, we usually recommend three places you file your lawsuit: Beijing,
Shanghai, and Guangzhou. These are the three big cities. The judges there are more trained;
they know they can’t do these favouritisms. So if you’re thinking about doing a lawsuit,
it’s very important that you figure out where to file. And filing a lawsuit, a good
thing with the lawsuit is the judge will consider more evidence. The judge is more stringent,
like I just said. The important thing is that the judge will grant you damages – give
you money, award you some money. That money will usually be taken from the defendant as
the defendant made unjustifiable profit, the profit that they made through infringing your
trademarks. And it also depends on the evidence that you provided the court. And that also
leads us to what the downside of filing a lawsuit is. There’s a lot of requirements
with what type of evidence the court will take and what type of evidence the court likes
to see, what types of evidence they will just consider – where there’s not much weight
to it; they’ll look at it and it doesn’t really do much, but you know if that’s required
then you have to provide it. Also, the downside of the lawsuit, you could imagine, is it takes
more time and it costs more money. There are usually five legal actions you can take: first is C&D letter
again – the cease and desist letter, the demand letter; the second one is to file a
complaint with the ecommerce website platforms; the third one is to file a complaint with
an AIC – i.e. the Administration for Industry and Commerce; the forth one is you file a
lawsuit; and the fifth one is in addition to filing a lawsuit, you also pursue criminal
liability from that infringement. So let’s go one by one.
The cease and desist letter is pretty much the same as we said previously, it costs less
and sometimes it’s more efficient when the infringement is not serious. Let’s say if
you find maybe one or two counterfeit products being offered for sale on these websites,
then usually we’ll recommend just sending a C&D letter just to see how it works. Usually
if it’s a very small infringement it works. But then there can be cases that it doesn’t
work. Then if it doesn’t work, what we do is we’ll
recommend filing a complaint with the ecommerce website. See, in China, because the government
is focused on enforcing IPs, so many of these ecommerce website platforms like Alibaba,
like Taobao, and Amazon, and all these major ecommerce websites, they have these IP complaint
channels, like a dedicated channel for accepting IP complaints. So you file it, they usually
accept it, and then usually respond to you within 5-7 business days. And that’s good
because they usually take down either the links or the store itself depending on the
infringement types. If it’s one page, they’ll just take off that page. You know if you go
on an online store there’s usually a couple of pages and maybe only this page is selling
counterfeit – then they’ll just take down this page, the whole store is still there.
But if it’s a store just selling counterfeits they’ll shut down the whole thing. But then
see, the bad thing about this, the downside about this, it’s like playing a game of
whack-a-mole. What that means is these ecommerce websites with IP complaint channels don’t
actively take that down because sometimes maybe the volume of work they are getting.
If they have to actively remove these links or stores, it takes a lot of effort. So it’s
up to the trademark owner like you; you have to actively monitor these websites. What we
usually suggest is usually we do maybe weekly or biweekly searches, or something – depends
on the agreement you have with your trademark agent.
And then the fourth one is filing a lawsuit. Like I said previously, filing a lawsuit,
you know you file a lawsuit with a court and the court will take into account the evidence
and the damages if you provide enough evidence showing that the infringer got so much money
through infringing your trademarks. And then the court will seriously look at the requests,
the claims that you made, and your complaint. And I want to mention though, in addition
to filing a lawsuit, those lawsuits are usually civil cases.
In China, you can also pursue criminal liabilities, and this is something that we do when the
infringement is huge, like it’s been crazy. And this usually happens before a trademark
owner decided to come into China; the infringement has already been going on for a while. And
then now with internet and everything, infringement can happen maybe the day after you release
your product somewhere else in the world. And sometimes it takes time for the trademark
owner to decide which market they want to sell their goods. If they want to sell their
goods they have to protect their trademark. So through that gap between you releasing
your product outside of China and until you come into China, thinking about protecting
your trademark in China, during this period there can be a lot of infringement going on.
If the infringement amount is relatively high, then that’s considered criminal liability.

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