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Key points on the infringement litigation of intellectual property
Linda Liu & Partners
Legal Department
Infringement litigation is a type of civil action taken by intellectual property right holders in order to judicially protect and maintain their rights and interests. Lawsuits involving infringement of intellectual property in China mainly include cases of patent, trademark and copyright infringement, and unfair competition. China has strengthened the protection of intellectual property since its entry into the WTO, and intellectual property lawsuits involving foreign entities accepted by Chinese courts have been increasing. This thesis mainly discusses certain key issues which foreign enterprises should pay attention to when they face an intellectual property infringement suit in China, it is my honor if this thesis can help such enterprises.
I. Limitation of action
According to Chapter 7 of the General Principles of Civil Law of the People’s Republic of China, the statute of limitations for applying to the people’s court for protection of civil rights shall be two years. The two year period begins when the entitled person knows or should know that his rights have been infringed upon. However, the people’s court shall not protect such rights if 20 years have passed since the infringement. Under special circumstances, the people’s court may extend the period for taking action.
In recent years’ trial practice in infringement cases, we have seen that acts of infringement of patent rights and copyrights frequently continue and often last for a long period. If the entitled person does not exercise his right of claim within two years from the day he knows or should know that his rights have been infringed upon, the intellectual property rights of the entitled person may still within the protection period stipulated by law, if the infringer is still carrying on the infringement action. In this kind of case, concerning the stipulated limitation of action, according to Rule 18 of “Interpretation of the Supreme People’s Court on the application of laws concerning the trial of trademark’s civil disputes” executed on October 16, 2002; Rule 23 of “Some Provisions of the Supreme People’s Court on the application of laws concerning the trial of patent civil disputes” executed in July 1, 2001; and Rule 28 of “Interpretation of the Supreme People’s Court on the application of laws concerning the trial of copyright civil disputes” executed in Oct. 15, 2002, stipulate that: for the tortuous act of infringement of intellectual property which is carried on continuously, if the period from the day when the right holder knows or should know that his rights have been infringed upon, until the day when the right holder sues in court, exceeds two years, the court cannot reject the right holder’s claim only for the reason that it exceeds the statute of limitations. In such case, during the protection period of the intellectual property concerned, the court should require the defendant to stop infringing; the calculation of infringement damages will begin two years before the date of suit, and damages before the two year period will not be protected. Thus, if such a case is brought, its limitation of action should be in conformity with the above judicial interpretations.
II. Jurisdictional court
The jurisdiction of legal cases can be divided into two categories: grade jurisdiction and territorial jurisdiction. Grade jurisdiction belongs to the divisions of cases within the system of law court, which cannot be chosen by the concerned party. Thus, territorial jurisdiction becomes rather important. Due to the differences in intellectual property protection in different regions, litigation in different regions will not only affect the party’s litigation cost and effectiveness, but also convenience and the party’s trust in judicial personnel. According to Rule 29 of the Civil Procedure Law, litigation of tortuous acts is proper in the jurisdiction of courts in the defendant’s domicile, or in the place of infringing act.
An action brought for trademark infringement will be governed by Rule 6 and 7 of “Interpretation of the Supreme People’s Court on the application of laws concerning the trial of trademark civil disputes”. A civil action brought against the infringement of a registered trademark will be heard by the courts located where the tort occurred, preservation place, the attachment location of the infringed commodity or the domicile of the infringer. The preservation place of an infringing commodity refers to the location where the infringed commodities are preserved or hidden frequently or abundantly; the attachment location refers to the location where the administrative agencies like Customs or the Industrial and Commercial office attach or detain the infringed commodity. To take joint action against many defendants with different infringing acts, a plaintiff can choose the location of one of the defendants’ infringing acts as the jurisdictional place. But in the case of patent infringement, according to Rule 5 and Rule 6 of “Some Provisions of the Supreme People’s Court on the application of laws concerning the trial of patent civil disputes”, for actions brought against the sale of an infringing patent commodity, a court in the place of sale holds the jurisdictional rights. If the plaintiff only sues the manufacturer instead of the seller, and if the manufacturing place is different from the selling place, jurisdictional lies in the place of manufacturing, which is also the defendant’s domicile. If the plaintiff sues the manufacturer and the seller together, the court in the selling place hold jurisdictional rights. If the seller is a branch of a manufacturer, such act of selling will be regarded as the manufacturer’s act. If the plaintiff sues the manufacturer for the act of manufacturing or selling, the court in the selling place hold the jurisdictional rights. Therefore, when a tort occurs, in order to choose a favorable court, a plaintiff can choose to obtain evidence by buying the infringed goods in a proper place.
III. Evidence
Evidence is the most important factor in an infringement action, so the success of many cases always lies in the adequacy of the evidence. If the plaintiff does not fully prepare before litigation, the defendant may well transfer or destroy the evidence, which makes it hard for the plaintiff to obtain again. The types and forms of evidence can be classified as follows:
1. Types of evidence:
(1) Proof of rights
In tort cases, a plaintiff shall first prove that he owns the subject intellectual property rights, which is the preliminary condition of a petition for remedy. The specific introductions are as follows:
① Proof of patent rights: Sometimes a patent certificate cannot demonstrate the present right condition; thus, when patent rights are infringed, the most effective proof of right is through filing the patent gazette and a duplicate of patent registration book obtained from the Patent Office. Besides, in the case of utility models, in order to decrease the risks of suspension of legal proceedings, the plaintiff should submit a patent search report so as to prove the effectiveness of the concerning patent right at issue.
② Proof of trademark right: a trademark registration certificate within the term of validity. For example, documents about the reputation of trademark, like the quantity of export to China, sales volume, advertisement input, and the trademark usage condition in China, etc.
③ Proof of copyright: the registration certificate of works, the proof of copyright ownership during the design by the design company, manuscript works and initial publication, etc.
④ Unfair competition case: if it is a case concerning the infringement of a well-known commodity’s unique packaging or decorative design, the plaintiff should provide the evidence of the unique packaging of the commodity; if it is a case concerning the infringement of business secrets, the plaintiff should submit evidence which constitutes the trade secrets.
(2) Tort evidence: to obtain tort evidence often means buying the infringed commodity. Its aim is to surely ascertain the distributor, manufacturer, the product itself and the selling place, so it is necessary to provide notice that the receipt given by the distributor is the uniform receipt printed by the China Tax Office, which includes information on the manufacturer’s official seal, the commodity’s pattern code and trademark. It will be even better if there is the name of the manufacturer. Besides, in order to improve the accuracy of testimony, it is necessary to buy the infringed commodity through a notarization process.
(3) Evidence of damage: the price and quantity of the infringed commodity, right holder’s losses and a receipt for the reasonable payment to prevent infringement. They will be explained specifically later.
2. Forms of evidence
In Chinese litigations, the form of evidence will be paid more attention than in European or American litigations. More details are as follows:
(1) Documentary evidence: the party shall submit the original manuscript, or a duplicate, or a photograph, the exception being books which are in conformity with the origin one.; shall indicate the source and stamp the seal after checking; report forms, blueprints, account books, and scientific materials should all supplemented with explanation materials; inquiries, statements, and conservation records should be signed or sealed by law enforcement personnel, the identify of the person who is questioned, the person who makes statements and the person who joins the conservation.
(2) Material evidence: Material evidence shall be original. If it is truly difficult to present the original document or material, then duplicates or photographs which are in conformity with the original may be submitted.
(3) Evidence of computer data or audio-visual fixation: the party shall submit the original carrier or the duplicate; shall indicate the method, time and person of creation; and any sounds should be supplemented by a written record.
(4) Testimony of witness: shall write clearly the basic information on the name, age, gender, career and address of the witness; shall bear the signature of the witness, and if not, be established by stamping; shall indicate the date of endorsement; and should be supplemented with the documents like ID card.
(5) Expert conclusion: shall stipulate the mandatory and the subjects which should be authenticated, the materials which should be submitted to the testifying institution, the basis of any survey and the relevant scientific technology, an explanation of the institution of the expert evaluation and the expert’s qualifications, all of which should bear the expert’s signature and the institution’ seal. The expert conclusion obtained through analysis should indicate the process of analysis.
(6) On-the-spot records: shall indicate the subject of time, place and incident, and also bear the signature of the law enforcement personnel and the parties; and the reason if the party refuses to sign or can not sign. If there are other stipulations on laws, regulations and rules, the stipulations should be authenticated.
(7) Extraterritorial evidence: when the party obtains evidence which is from abroad, he should indicate their source. The evidence should be notarized by the Notary Office and certified by the embassy and consulate of People’s Republic of China in the concerned country.
(8) Foreign language evidence: the foreign documents or audio-visual material submitted by a party should be supplemented with translation and the exact Chinese version, and should affix the seal and the translator’s signature.
(9) Secret-related evidence: if the evidence involves a state secret, trade secret or personal privacy, it should bear such marks and be explained to the court, the court will then examine and check.
3. Conservation of evidence
In order to prevent the natural disappearance, intentional destruction or the difficulty of obtaining afterwards, through the application of a litigant or initiated by the people’s court, the court can conserve the civil action evidence in advance.
The conservation of evidence must meet the following requirements: firstly, if the evidence is not collected or fixed in time, it will be lost naturally, be intentionally destroyed or hard to be obtained later; secondly, it must be applied for by a litigant or started by the court on its own authority.
Generally speaking, the conservation of evidence should be applied for by a litigant. If there is no application, the people’s court may conserve the evidence initially if it believes it to be necessary.
The litigation participant must file an application for evidence conservation during the time of litigation or thereafter. The application letter should indicate the reasons for the conservation of evidence, the name of the applied evidence, the location and the fact which the evidence can prove, etc.
Nowadays, the conservation of evidence mainly includes the financial accounts of the infringer, as requested by the right holder. Its aim is to evaluate and audit the illegal profits of the defendant for the person who has applied, so as to be used as a reference of the calculation of profits and claim reimbursement.
In practical operation, there is a prominent question at present, due to the lack of societal faith, that the account materials kept by the court are always unreal, which means that the audit department can not audit the condition of the defendant’s profits. When the plaintiff finds that the financial account conserved by the court cannot be used, he will demand the court to decide the damages at its discretion.
Besides, during the conservation of evidence, the people’s court will request the applicant to submit guarantee fees accordingly, which means that the applicant must bear some litigation risks. Therefore, in order to avoid the increase of indemnification risks, the applicant should request the conservation of evidence under the condition that it not damage the evidence’s value and not interfere with the normal use of the conserved evidence.
IV. The determination of compensation for damages
1. The calculation of damages
Compensation for damages is one of the most extensive and essential ways for the infringer to bear civil responsibility. If the problem of damage proposed by the right owner can not be well solved, the situation of “win the case but lose the money”, “great losses but little compensation”, “gains do not equal to the loss” will result, which can not effectively protect the intellectual property legally. According to the General Principles of Civil Law, the basic compensation principle, when civil rights are infringed, is to compensate for actual losses. However, when the defendant’s infringement and the losses have been investigated clearly, but the amount of the plaintiff’s losses and the defendant’s profits can not be confirmed, in this kind of case, the method of quota compensation can be adopted to determine the amount of damage. Generally speaking, there are four ways of calculating damages in cases of intellectual property infringement, as follows:
(1) Right owner’s actual losses caused by the infringement. However, in practice, the right owner’s actual losses are hard to calculate. For there must be some causal relation between the right owner’s losses and the defendant’s acts of infringement, which is especially hard to prove.
(2) Defendant’s illegal profits through infringement. As to the defendant’s profits, we always regard the whole profits produced as a result of the defendant’s infringement as the amount of damage, which also involves the problem of causal relation: the defendant’s gain is the result of utilizing the plaintiff’s intellectual property, and these profits should be earned by the plaintiff originally.
(3) Refer to the royalty of license. Only patent law stipulates clearly to this aspect in our country. However, as to other types of intellectual property infringement, licensing royalty is of the same importance, so it is an important basis which determines the legal compensation for damages.
(4) Application of legal compensation at the court’s discretion. When the above three methods all cannot be used to calculate the damage of the infringement losses, according to the relevant regulations, the court will act at its own discretion to award the following damages for intellectual property infringement:
● Cases of patent dispute, RMB5000~RMB300,000 not exceeding RMB500,000.
● Cases of trademark dispute, below RMB500,000.
● Cases of copyright dispute, below RMB500,000.
2. Whether the attorney’s fees should be counted in
As to whether the attorney’s fees should be included, there are regulations in both “Interpretation of the Supreme People’s Court on the application of laws concerning the trial of copyright civil disputes” and “Interpretation of the Supreme People’s Court on the application of laws concerning the trial of trademark civil disputes”: the People’s Court may count the attorney’s fees stipulated by the department concerned in the compensation. The above judicial interpretations set a principle, i.e., that attorney’s fees can be counted in the compensation for damages during the intellectual property litigation, which are only provided for in other civil actions. Although the judicial interpretation only refers to copyright and trademark cases, this principle can be applied to other cases of intellectual property infringement.
According to the principle stipulated by the judicial interpretation of the Supreme People’s Court, we should pay attention to the following three questions during the calculation of attorney’s fees in a case of intellectual property infringement:
(1) Firstly, the party shall propose the application. Only if requested by a party can the court decide whether to include attorney’s fees in the damages for a finding of intellectual property infringement.
(2) It is applicable where it can be ascertained that the infringer action is intentional or a grossly negligent tort. For example, in America, the court always decides the losing party to bear the attorney’s fees, but it needs the right holder to prove that the losing party is malicious.
(3) The attorney’s fees should be within the limitation of our country’s regulations. If the party and his attorney agent have reached an agreement on charge, or the agreed charging standard has exceeded the standard of attorney’s charge which is stipulated by the concerned department in our country, the court will not support an excess charge.
3. The relationship between the damages and the litigation fees
According to the specific requirement of “Methods of the People’s Court on the Litigation Charges”, the party must preliminarily submit the litigation fees. In general, acceptance fees in property cases usually depend on the party’s claims. The greater the amount of relief sought, the higher the acceptance fees will be, and they also are borne by the losing party. However, even though the defendant is the losing party, the court decision will only support part of the request if the plaintiff’s claim is too high. Besides, we should also note that if some claims are impossible to win during litigation, changing the claims does not mean that acceptance fees can be reduced accordingly. According to the “Submitting Method on the Litigation Fees”, if a party requests to reduce the litigation claims before the court acts, the excessive portion will ultimately be returned. Thus, a request to reduce claims must be proposed before the trial or when the court is acting. It is quite important to propose a proper claim during infringement litigation.
V. Property preservation and temporary injunction
During trials of civil cases involving intellectual property, in order to make sure the party’s interests are achieved. Strict application of property preservation and temporary injunctions play an important role in preventing infringement, preventing the spread of losses and guaranteeing the execution of an the effective decision. During the trial, the debtor may try to transfer and hide his property in order to escape from debt, which will lead to a result that although the plaintiff wins the case, he still could not obtain any money. To avoid such problem, it is suggested to apply for a property preservation ruling from the court once the plaintiff has collected effective evidence.
Property preservation requires the court to take protective measures to restrict the disposition of a party’s property and the disputed objects, in order to guarantee the execution of the decision or avoid loss of the property before the party brings a suit or after the suit has been brought but before execution. When the court orders the applicant to provide a guarantee, the applicant must provide the same, or the court will reject his application. The applicant must bring the suit within 15 days after the court’s preservation of property order; if not, the court will dissolve the order for property preservation, and the plaintiff must compensate for the losses caused by the property preservation. In trial practice, there are many examples like the following: the applicant for property preservation is ultimately the losing party, so his original application was improper; at such time, the applicant must compensate for the losses caused by the property preservation order. In conclusion, the applicant should consider carefully before applying for a property preservation order.
Besides, in order to safeguard the realization of the party’s interests and prevent infringing commodities from flowing into the market, except for keeping evidence concerning the infringement acts, a party also has the right to take the effective temporary measures. In order to conform with WTO rules and the promises China made to he international community during the negotiation of entry into WTO, the revised patent, copyright and trademark laws all create a legal system for stopping acts of infringement before litigation in a substantive way, i.e., via a temporary injunction before suit, which is a compulsory measure taken by the court when applied for. It should be proposed by a party under the conditions that there is high credibility, and a possibility of winning the case. Besides, the function of providing a guarantee is to have the applicant must bear the responsibility for compensation when he obtains an improper temporary injunction. This process can avoid a party’s misuse of right to some degree. At present, the Chinese court’s principle of granting a temporary injunction before litigation is to be active and prudent. Active means to accept cases actively, judge quickly and take measures immediately. Prudent means to examine the cases carefully and to try not to injure the interests of the person who the order will be applied to. According to the statistics, since the revision of the three main intellectual property laws: patent, trademark law and copyright laws, temporary injunction cases accepted by the local courts nationwide have exceeded 300; and, in cases requested by an applicant, the supporting rate of such decisions in granting such relief has reached 88%.
VI. Suspension of legal proceedings
The suspension of legal proceedings refers to temporary suspension of ongoing legal proceedings when certain special situations occur. The legal proceedings will be continued instead of restarted when the reason for suspension disappears, as actions before suspension still have legal effect.
During intellectual property proceedings, when a plaintiff sues a defendant for infringement of intellectual property, the defendant may plead against the ownership/validity of the intellectual property right or its effectiveness, which will create an action relating to ownership and/or validity, or a dispute as to the effectiveness of such rights. Ownership /validity and effectiveness of rights are the bases for bringing a lawsuit, and, thus, a court can finally decide only after the result, of these issues have been determined. The suspension of intellectual property proceedings can be divided into the following types in terms of the involved intellectual property.
1. Litigation suspension of copyright cases
In the proceedings involving copyright infringement, if the copyright’s attribution is disputed, the infringement litigation will be temporarily suspended in order to await a decision as to the other party’s rights, as made by the local court or courts in different areas. In addition, if there are conflicts among different rights which are owned by different entities in the fields of copyright, patent right of industrial design or exclusive rights to a well-known commodity’s name, package and decoration, when the plaintiff brings an infringement litigation, the defendant or a third party will plead or bring a new suit in terms of the prior right of the other intellectual property, thus leading to the likely suspension of infringement proceedings.
2. Litigation suspension of patent right cases
This is the most typical and complicated situation. Different from a copyright’s automatic acquisition, the acquisition of patent rights need application and examination, and also the authorized agency for examination and the trial agency are different. Therefore, except for the dispute of patent right attribution, there are the disputes as to patent effectiveness and enforceability, which may also lead to suspension of litigation. In view of this situation, the Supreme People’s Court issued a new regulation in the “Explanation on the Trial Issues of Patent Dispute”, on December 31, 1992:
(1) After accepting tort cases for infringement of utility models or patents for industrial designs, when the court sends the duplicate bill of complaint to the defendant, the court must notify the defendant that if he wants to claim invalidity of the patent right at issue, he must propose the same to the Patent Review Bureau within the period of submission of defense. If the defendant requests to claim that such patent right is invalid, the people’s court must suspend the proceeding.
(2) If the defendant does not request or claim that the patent right is invalid, the People’s Court may not suspend the proceeding.
(3) In cases of infringement of an invention patent right accepted by the court in cases of infringement of utility models patents affirmed by the Patent Review Bureau, if the defendant does not to claim/request that the patent right at issue be considered invalid, the People’s Court may not suspend the proceeding.
3. Litigation suspension of trademark right cases
Similar to the suspension of a patent dispute proceeding, trademark infringement litigation also can have suspension caused by disputes about ownership of rights and enforceability of the trademark. Also, in practice, there is also the situation of litigation suspension caused by a dispute about existence of a license. For example, during an infringement proceeding, if the plaintiff sues the defendant for infringement of his trademark, and the defendant brings a new suit claiming that the plaintiff has not performed as required by a joint venture or license contract, the infringement proceeding may be suspended before the decision of the local court or court in different areas. However, because trademark, cases are not as complicated as patent cases, during a proceeding for trademark infringement, the defendant can file an application which may be accepted by the court to cancel the plaintiff’s registered trademark. Thus, it is of vital importance to persuade the judge, for his power of discretion over suspension of such proceeding is quite great.
4. Litigation suspension of unfair competition cases
The requirements of our country’s “Anti-Unfair Competition Law” have made the right of preventing the unfair competition from becoming an important civil right. The exclusive rights of a well-known commodity’s name, packing and/or decoration all are part of such kind of right. In cases of unfair competition, the exclusive rights of the well-known commodity’s name, packaging and/or decoration may conflict with other persons’ intellectual property rights, like trademark, copyright and industrial design rights, which may lead to the suspension of an unfair competition proceeding.
VII. Confirmation suit of non-infringement
Confirmation of non-infringement (like a declaratory judgment action in the United States) is a new type of case which has arisen in the practice of the intellectual property trial in recent years. It refers to the cases in which the charged infringer initially brings a lawsuit against the asserting party in order to resolve an unstable situation, under the condition that the charged infringer certainly knows he does not infringe or he is not sure whether he is committing a tort; and, at the same time, the owner of the intellectual property threats to bring an infringement suit against him. Such a system can not only help the infringer to maintain his legal interests, but can also prevent the intellectual property’s right owner from abusing his right and threatening to sue someone randomly or maliciously.
The confirmation of non-infringement of intellectual property first appeared in a patent litigation. In 2001, the Supreme People’s Court made the following decision in a case of confirmation of non-infringement brought by Suzhou Longbao Bio-engineering and Suzhou Langlifu Healthcare Products. According to the requirement of Rule 108 and Rule 111 in Civil Procedure Law, “the court must accept the case which is in conformity with the law.” In that case, because the defendant Langlifu Healthcare Products had issued a letter declaring that the plaintiff’s commodity was an infringement, which led distributors not to sell the plaintiff’s products, the plaintiff had a direct interest with the case. The court must accept such a litigation if there is a specific defendant, a concrete claim, supporting facts and rationale; then, such a case is within the court’s scope and jurisdiction. Taking a “claim for the confirmation of non-infringement of patent” as the cause of action will reflect the essence of the party’s dispute more directly and manifest the core subject of the party’s claim and the court’s decision. Thus, the litigation of confirmation of non-infringement has been recognized in China’s judicial practice.
In addition, there is the aspect of the court’s territorial jurisdiction, which should also be considered during a confirmation suit of non-infringement. Before determination of the court’s jurisdiction, the court should first determine what type of suit “the confirmation suit of non-infringement” relates to. In view of this, the Supreme People’s Court’s Notification(No.4, Civil 3〔2004〕) of the appointed jurisdiction in the case of the patent dispute between Shijiazhuan Shuanhuan Auto Joint-share Co. Ltd, Honda Technology and Industrial Co. and Beijing Xunyang Hengxing Trade Co. found that the confirmation suit of non-infringement belongs to the dispute of infringement category. In the trial for the case of confirmation of non-infringement of the trademark “Peter”, the Beijing Higher Court held that: “the claim for the confirmation of non-infringement is a kind of confirmation request which requires the court to judge whether his act will infringe other people’s legal rights. The law applied by the court on the trial of such kind of case is the same with the civil tort dispute. Thus, the confirmation suit of non-infringement belongs to the civil infringement suit……” It can be concluded that “confirmation suit of non-infringement” belongs to category of the infringement litigation, which is recognized by the court. As to the general territorial jurisdiction of an infringement case, Rule 29 of the Civil Procedure Law of the People’s Republic of China stipulates that: a suit based upon an act of infringement belongs to the jurisdiction of the court in the place of the act or in the defendant’s domicile place. Thus, a suit based upon an act of infringement act belongs to the jurisdiction of the court in either of such locations.
In practice, when the right holder of a patent or trademark suspects that commodities sold by other people are infringing, it is suggested that the right holder may first issue a warning and try to compromise, and later sue if the infringer continues to infringe. Some enterprises may stop infringing after receiving a warning letter, while others may first bring a confirmation suit of non-infringement against the opposing party. This is one consideration for the right holder to decide whether or not to issue a warning letter, so as to avoid the confirmation suit of non-infringement.
VIII. Application for the confirmation of well-known trademark
Protection for our country’s well-known trademarks adopts the international general custom of “protect passively, confirm individually”, and different levels of courts nationwide have accepted a large number of cases involving the confirmation of well-known infringed trademarks and unfair competition. Up to 2006, 180 well-known trademarks confirmed by courts nationwide. The following issues should be carefully considered as act of an application for a well-known trademark.
1. Evidence
The court’s confirmation of well-known trademark depends upon the evidence, as the trademarks confirmed by the Supreme People’s Court during trial as the well-known trademarks, like “Qizheng”, “Sinopec”, “Gome”, “Rolex”, “Dupont”, “Walmart”, etc. all bear the characteristics of early registration, long periods of use, high advertising fees, a broad business market, and well-preserved trademark record, all of which are in conformity with the requirement of Rule 14 in our present Copyright Law. In order to meet the requirements of judicial confirmation, the evidence provided by the enterprise should have specific objectives which mainly include:
(1) The registration situation of this trademark at home or abroad.
The period of the earliest or continuous usage of this trademark (in practice, it requires that the trademark be continuously used for more than one year and no less than five years in principle, and at the minimum three years)
(2) The length, degree and geographic scope of the trademark’s publicity.
As legal practice mainly focuses on the examination and confirmation of evidence’s form and effectiveness, advertising and publicity contracts are the most basic evidences. Due to the different forms of publicity, audio-visual evidence shall be supplemented with the audio-visual materials certified by a broadcasting unit, and material evidencing monitoring; newspapers, magazines or printed evidence shall be supplemented with the real object, such as the original proof of the publishing house; photographs and other proofs if an exhibition, activity of sponsors, promotion, public welfare, etc.; and internet publicity evidence shall be supplemented with the demonstrative materials, clicks, comments, and reports, etc. As to trials of subjects concerning advertising publicity, the trademark right holder also has to submit a general analysis report on arrangement of advertising and an audit report evidencing at least three years’ advertisement input, which will help to evaluate publicity and advertising in general.
(3) Utilize the main economic index of this trademark’s commodity or service in recent years.
On the trial of the confirmation of well-known trademark, a key factor should be taken into consideration: the sale and management of the commodity or service using the trademark. In practice, the quantity of manufacture and sales can be submitted together with information about a product’s sales network, the region covered and volume, etc., in order to comprehensively confirm the volume and territory involved. The submitted data should have the certification of an authorized financial offices, taxes, or official audits. In general, quantity can be certified by the concerned agency, while the grade should be certified by the provincial administrative body. The arrangement of the sales network should be supplemented by an agency contract, sales contract, sales receipts, etc.
(4) The relevant record as to a trademark’s protection.
The record includes the local certificate of a famous trademark, i.e., a “well-known commodity” as recognized by the court as well as a certificate documenting such honor. In legal practice, evidence of notability can be determined by information like a survey of customers or an opinion poll, which are effective proofs, but evidence from a survey as to notability will be considered as a kind of circumstantial evidence by a court after examining the relevant evidences. Also, the court should strictly examine the methodology of a survey report, such as whether a design or survey method will misrepresent the truth, the choice of a survey object is in conformity with the trademark’s definition of “relevant public”, the choice of covering areas is representative, and if the method of data analysis is reasonable, etc. A court should not consider those survey results in which if there is any factor which may lead the survey report to lose credibility.
2. Select proper infringement case.
According to the principle of “passive protection”, an application for the confirmation of a well-known trademark cannot be proposed in all trials of trademark infringement or unfair competition. The specific requirements for a court to confirm a well-known trademark can be found in two judicial interpretations issued by the Supreme People’s Court:
(1) “Interpretation on the application of laws concerning the trial of geographic name civil disputes” executed in July 24, 2001, stipulates: “in the trial of geographic name dispute, the court may confirm whether the involved geographic name is well-known according to the party’s request and the concrete situation of the case.”
(2) “Interpretation on the application of laws concerning the trial of trademark civil disputes” executed in October 16, 2002, stipulates: “in the trial of a trademark dispute, the court may confirm whether the involved trademark is well-known according to the party’s request and the concrete situation of the case.” Both the above two situations can be applied to the confirmation of well-known trademark.
Cases for which confirmation can be applied include: a third party’s mark which is the same or similar to the trademark applied for by an applicant to confirm that it will damage the applicant’s interests if it is used or registered in a different commodity or service; third party which have the same or similar characters to a trademark applied for by an applicant which will mislead the public and damage an applicant’s interests if they are used or registered as the name of the enterprise or as one part of the website geographic name, etc.
At present, the Supreme People’s Court has noticed the tendency that some enterprises apply for the confirmation of well-known trademark through bringing a law suit intentionally. The president of the intellectual property chamber of the Supreme People’s Court, Jiang Zhipei, declared recently that: the confirmation of well-known trademarks will be regarded as an important subject this year and relevant judicial interpretation will be issued on the basis of investigation and research. It is reported that the Supreme People’s Court had issued an important decision which indicates that well-known trademarks confirmed by a respected Court will be effective only after it is reviewed by the belonged provincial Higher Court.
