CHINA Law and Practice Contributed by: Chuanhong Long, Huiqing Wang, Yingying Shen and Fan Li, CCPIT Patent and Trademark Law Office
Civil Remedies Right-holders may bring civil lawsuits seeking civil remedies, including injunctions (an order to stop the infringing use), monetary damages and elimination of negative effects. Damages are calculated based on the right-holder’s actual losses or the infringer’s ille- gal gains. If those amounts are difficult to determine, statutory damages apply. Statutory damage is from CNY30,000 up to CNY5 million for industrial design, and up to CNY5 million for trade dress. Punitive damages are available in the case of indus- trial designs, but not trade dress. Interim Relief (Preliminary Injunctions) For both industrial designs and trade dress, interim relief in civil proceedings is governed by the provisions of the Civil Procedure Law. The threshold for obtain- ing interim relief is high. In the case of a preliminary injunction, for example, the rights-holder must dem- onstrate at least (i) an urgent necessity, meaning that irreparable harm is likely to occur without immediate relief, and (ii) a likelihood of success on the merits of the case. The applicant is also usually required to provide security or a bond. Border Measures As for the border measures, the right-holder may reg- ister design patents with the General Administration of Customs (GACC) for a ten-year term, which is renew- able. However, it should be noted that patent record- als are less common than trade marks because of the complexity involved in comparing designs. Once a patent has been recorded, detention mechanisms may be available, including both application-based detention and ex officio detention. Border measures are not available for trade dress in China. 4.5 Functionality and Technical Features Design features that are dictated predominantly by their technical function are regarded as having no impact on the overall visual effect of a design. In practice, the term “predominantly” gives rise to more debate than “solely” when determining whether a feature is function-driven, since most features, even those alleged to be functionally dictated, are in fact
hybrids of functional and aesthetic considerations. Nevertheless, where it can be shown that multiple alternative designs are capable of achieving the same technical function, the feature in question will gener- ally not be regarded as functionally dictated. China amended its Patent Law in 2020 to permit par- tial designs. Excluded from protection are (i) pure pat- terns that are not attached to a product, (ii) purely functional components, and (iii) indeterminate por- tions of a design. A design may be refused registration or subsequently invalidated on the grounds of technical necessity. Trade secret protection in China is governed primarily by the Anti-Unfair Competition Law, together with the Civil Code, the Labour Contract Law, the Company Law, the Civil Procedure Law, the Criminal Law, and the Supreme People’s Court’s judicial interpretation on civil trade secret cases. Under Chinese law, a “trade secret” generally means commercial information, technical information, or other business information that is not known to the public, has commercial value, and for which the rights-holder has taken corresponding confidential- ity measures. Protectable information may therefore include technical know-how, formulas, processes, designs, source code, algorithms, data, customer information, supplier information, pricing, marketing plans, and other operational information, provided the statutory elements are met. To obtain protection, the claimant must in substance establish three core elements: secrecy, commercial value, and reasonable confidentiality measures. In litigation, Chinese courts also expect the claimant to identify the alleged trade secret with sufficient speci- ficity, so that the court can distinguish the protected information from public-domain knowledge and from the claimant’s general business materials. 5. Trade Secrets 5.1 Legal Framework and Protectable Information
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