Against the backdrop of China's changing IP landscape, the administrative enforcement of patents remains a valid option. Although local IP offices are being incorporated into the local administrations of market supervision, their patent enforcement function will remain intact. As such, judicial and administrative protection will likely dovetail in future to achieve complementary advantages. IP practitioners are therefore advised to tailor enforcement strategies to the circumstances of a particular case.
Requesting Customs to seize export products on grounds of patent infringement can be a potent legal tool against exporters. If the products involved are subsequently detained by the court and found to be infringing, they will be destroyed. However, it is difficult for patentees to organise customs seizures of exported patent-infringing products. If the other party files a counterclaim, the patentee may end up shooting itself in the foot.
After initiating a criminal action against an individual trademark counterfeiter, the plaintiff in a recent case filed a follow-up civil lawsuit against the counterfeiter and his company on the grounds of trademark counterfeiting and trade dress infringement. Through this civil lawsuit, the plaintiff stopped the trade dress infringement and put greater pressure on the counterfeiter.
The patent for SEB SA's Actifry product – a fryer that can automatically coat food with oil – has been the subject of numerous invalidation requests. In a September 2015 decision, the Patent Re-examination Board recognised the invention as a technological breakthrough and maintained the patent's validity. According to publicly available records, this was the first time that the board based its decision in a patent invalidity proceeding specifically on the concept of breakthrough technology.
It can sometimes be difficult or even impossible for a rights holder to obtain qualified evidence of infringement or the amount of damages that it has incurred. However – as demonstrated by a recent Taizhou Intermediate Court case – where evidence is likely to be destroyed or difficult to obtain in future, the party concerned can apply to the court to preserve evidence during the trial.
For the first time, a colour combination trade dress has been granted judicial protection – before being registered as a trademark – as a 'specific trade dress of a famous commodity' under the Anti-unfair Competition Law. The court concluded that STIHL's long-term and extensive promotion and use of the orange and grey colour combination on its famous chainsaw products made it distinctive enough to serve as a source identifier.
The Supreme People's Procuratorate and the Baiyun District Court have adopted the opinion of the brand owner in a criminal case with regard to the calculation of a trademark counterfeiter's illegal turnover. The case demonstrates the importance of the IP owner's active participation in criminal proceedings. In light of the input and involvement of the brand owner, the court imposed a heavier penalty on the counterfeiter.
In criminal IP proceedings, the Chinese courts tend not to accept a civil claim collateral to criminal proceedings filed simultaneously by the victim IP owner. Therefore, in criminal proceedings the victim and the infringer should seek to reach an agreement on damages through negotiations, since it will help the victim to obtain compensation and the infringer to obtain a commuted sentence.
SEB recently obtained favourable rulings in two disputes against infringers who exploited an invention for which SEB had filed a patent application. The exploitation started after publication of SEB's patent application, but before grant of patent. SEB filed suit for damages covering the period following grant of the patent and for a 'reasonable fee' covering the period preceding grant of the patent, pursuant to Article 13 of the Patent Law.
Original equipment manufacturer production has become a hot topic in Chinese trademark practice. It involves the intersection of three trademark issues: registration maintenance, squatting and infringement. It is hoped that the Supreme Court's expected publication of the IP Rights Report, along with an extensive review of last year's cases, will shed light on these issues.
After six years of proceedings, the Beijing Higher Court has issued its decision to vacate the lower court's decision in a high-profile civil suit between Neoplan Bus GmbH and the alleged design patent infringer Zhongda Group, a domestic bus producer. The court found that no infringement had occurred, due to the invalidation of Neoplan's design patent.
The Supreme Court recently rejected an application for retrial filed by Castel Frères SAS in a trademark non-use dispute. Its ruling redefined the concept of 'legitimacy' in trademark use and reversed a previous decision on the same issue in another case published in 2008.
The Shanghai Pudong District People's Court has held that four companies infringed Levi Strauss & Co's 'double-arc' mark by using a similar stitching on jeans. The defendants contended that the stitching was merely decoration, but the court held that Levi Strauss's use - in combination with its registered LEVI'S trademark, on the jeans as a whole - had created a link between sign and products in the minds of consumers.
In trademark opposition proceedings in China, it can be difficult to seek recognition of well-known trademark status or to prove that an opponent's trademark, although not registered in China, has obtained sufficient reputation through use. However, as a recent case demonstrates, if a disputed mark is a slavish copy of the opponent's stylised trademark, the opponent may be able to invoke copyright.
Foreign companies have registered numerous trademarks in China, but many such registrations have been purely defensive, by registrants that are either laying plans to tap into the market in future or trying to stem the flow of counterfeits. However, changing judicial practice and an imminent amendment to legislation mean that foreign companies must give more thought to serious commercial use of their trademarks.
The State Administration for Industry & Commerce has published a document entitled "Lists of Well-Known Trademarks Recognised through Administrative Procedure". Its statistics indicate the difficulties that foreign companies face in having their trademarks recognised as well known through administrative procedures.
Destroying infringing goods and their means of production can be vital to prevent repeat infringement, as the damages awarded by Chinese courts are often too small to be a deterrent. However, many courts in China choose to avoid dealing with the issue directly. Forum shopping, administrative actions and out-of-court agreements are among the tactics to consider.
If a product has lost its design patent protection, but is widely recognised by the relevant public in China as a result of its distinctive design, a recent Supreme Court opinion will make it easier to seek protection under the Unfair Competition Law. The court virtually treated the configuration of the allegedly infringed product as an unregistered three-dimensional trademark.
The State Administration for Industry and Commerce has approved and released the Management Measures of Trademark Agencies. The measures, which are already in effect, make a particularly significant change to the 2009 measures: law firms can now act as trademark agents.
Since China's accession to the World Trade Organisation in 2001, local courts have experienced an increase in IP rights lawsuits before the civil courts. The number of foreign-related IP lawsuits also increased, although these account for an ever-declining proportion of the total number of cases.