CHINA Law and Practice Contributed by: Binxin Li, Guangzhen Shang, Yue He and Lesley Wang, LeanWill Law Firm
name or drug trade mark, pharmaceutical companies are advised to select distinctive marks and to conduct clearance searches to increase the chance of suc ‑ cessful registration. Use of Pharmaceutical Trade Marks In addition to the requirements for use of a registered trade mark stipulated by the relevant laws and regula ‑ tions, a registered trade mark used on pharmaceuti ‑ cal labels and package inserts must also comply with the relevant formality requirements specified in the Administrative Provisions on Pharmaceutical Pack ‑ age Inserts and Labels, including the position, size and presentation of the trade mark. Non-use cancellation poses a significant legal risk in the pharmaceutical sector after trade mark registra ‑ tion, due to long product development cycles, which may leave trade marks dormant for years. Under the PRC Trade Mark Law, any party may petition to cancel a trade mark after three consecutive years of non-use. To mitigate this risk, pharmaceutical com ‑ panies should maintain comprehensive documenta ‑ tion demonstrating actual use or intent to use their trade marks, including but not limited to business plans, collaboration agreements, clinical trial reports and drug registration application materials, to defend against potential non-use cancellation actions. Trade Mark Infringement and Counterfeiting When facing trade mark counterfeiting or infringement, pharmaceutical companies have remedies similar to those available to right-holders in other industries, including the following. • Civil litigation: companies may seek injunctions and monetary compensation. Trade dress protec ‑ tion against copycat packaging may also be pur ‑ sued under unfair competition claims. In December 2024, an appellate court awarded over USD8 mil ‑ lion in damages in a trade mark infringement and unfair competition dispute between two Chinese pharmaceutical companies ( Chang Xiu Lin v Chang Shu Lin ). The court recognised the plaintiff’s trade mark as being well-known, and the drug packag ‑ ing has sufficient market influence for trade dress protection.
• Administrative enforcement: companies may seek fast and effective action through the local Admin ‑ istration for Market Regulation to stop ongoing infringement. Administrative enforcement can also facilitate the preservation and collection of evidence by government authorities, which can subsequently be used in civil and criminal proceed ‑ ings. • Criminal prosecution: for stronger deterrence, rights-holders may report counterfeiting activities to local Public Security Bureaus to pursue criminal remedies under the PRC Criminal Law. Relevant criminal offences include: (a) drug-related crimes, such as manufacturing or selling counterfeit drugs (Article 141) and man ‑ ufacturing or selling substandard drugs (Article 142), which primarily affect public health and safety and hence are subject to more severe penalties that may exceed ten years of impris ‑ onment and, in exceptionally serious cases, life imprisonment or even the death penalty; (b) medical device-related crimes, such as manu ‑ facturing or selling fake or substandard medi ‑ cal devices (Articles 145), which also primarily affect public health and safety and may incur penalties comparable to those for drug-related crimes; and (c) trade mark-related crimes under Articles 213– 215, which affect intellectual property rights and market order, with statutory penalties of up to ten years of imprisonment. Where counterfeit or substandard drugs or medical devices bear counterfeit registered trade marks, the conduct may constitute both drug or medical device- related crimes and trade mark crimes. In case of statu ‑ tory concurrence, Chinese courts generally apply the principle of selecting the offence carrying the more severe penalty. Under current judicial practice, courts generally prioritise drug or medical device-related charges, as they safeguard public health and safety and are subject to more severe criminal penalties than trade mark offences. 6.2 Copyright Copyright disputes in China’s life sciences and phar ‑ ma sector are less common than patent, trade secret and trade mark disputes, but they do occur. Dis ‑
53 CHAMBERS.COM
Powered by FlippingBook