CHINA Law and Practice Contributed by: Chuanhong Long, Bin Zhang, Cuicui Liang and Lei Fu, CCPIT Patent and Trademark Law Office
mark right, as the status of the trade mark right might be influenced by official decisions. If the trade mark is cancelled or invalidated during the litigation, this will influence the result of the litigation against trade mark infringement. “Non-Infringement” Defences Defences against trade mark infringement also include “non-infringement” defences, claiming both the trade marks and the goods involved are not identical or sim - ilar, and/or no confusion would likely be caused due to the use of the mark in question. The alleged infringer could also challenge the use status of the trade mark involved. If the trade mark registrant cannot prove their use of the trade mark within the three years prior to the infringement litigation being filed, the alleged infringer will not bear liability for compensation. 9.2 Defences to Copyright Infringement (Fair Use/Fair Dealing) In China, the concept of fair use exists in both the Trademark Law and Copyright Law. The Trademark Law regulates that the rights-holder cannot prohibit the legitimate use of generic names, designs or mod - els of goods, or direct indications of the quality, main raw materials, functions, uses, weight, quantity and other features of goods, or the place name in the trade mark. The Copyright Law provides for specific circumstanc - es where certain uses of copyrighted works may be permitted without the owner’s consent, such as for the following purposes: • news reporting; • teaching; • scientific research; or • personal study. The Copyright Law does not recognise an exception to copyright infringement based on satire or parody. It is still controversial whether parody should enjoy copyright protection. For satire, it might be considered an independent subject of copyright, but as it incorpo - rates elements of the original copyrighted work, there may be infringement risks.
There is no statutory exception to trade mark or copy - right infringement based on the right to free speech or information. 9.3 Exhaustion In China, the Trademark Law and Copyright Law do not have explicit provisions for “exhaustion of rights”. The first sale of a product bearing a trade mark can exhaust the owner’s rights to that specific item, how - ever, meaning that the trade mark owner has no right to prohibit others from reselling or transferring the product in the market. Regarding copyright exhaustion, China follows the principle of “exhaustion of distribution rights”, which means that once the original or copies of a work have been sold or lawfully transferred, the new owner of the original or copies can resell or give away the same original or copies without the need for permission from the copyright holder regarding the distribution right. Regarding non-fungible tokens (NFTs), in a recent judgment the court denied that the trading of NFT dig - ital works was subject to the control of the distribution right and did not apply the “exhaustion of distribution rights” to NFTs. This decision was based on the statu - tory principles of the Chinese Copyright Law that the distribution right in China is limited to the transfer of tangible carriers that are attached to the work. Trade mark or copyright holders have access to injunc - tive relief measures to protect their rights. A judge has discretion in ordering remedies based on the specific circumstances of the case. Application for a prelimi - nary injunction can be filed with the competent court before instituting legal proceedings or in the middle of legal proceedings, requesting measures prohibiting infringement or preserving the assets in accordance with the relevant laws. The application for prohibiting infringement could be filed with the court on condition that the plaintiff has evidence proving that another party is engaged in (or 10. Remedies 10.1 Injunctive Remedies Application for an Injunction
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