CHINA Trends and Developments Contributed by: Qiang Ma, Jingtian & Gongcheng
CNIPA adopts a more cautious approach towards the recognition of well-known trade marks Both the CNIPA and the courts have adopted a more cautious approach when it comes to recognising well-known trade marks. They have become conservative about the applica - tion of Article 13 of the PRC Trademark Lawand will avoid applying it unless necessary. A good example is a famous foreign consultation com - pany which has secured well-known trade mark protection dozens of times. According to the written rule, the CNIPA should have directly relied on the successful precedents to recog - nise well-known marks again unless the other side raised an objection. However, in a recent contentious case, the CNIPA asked for evidence of use to support the recognition, which means a re-determination. This transformation reflects the current prudent position of the CNIPA. Inadequate preservation and enforcement hamper trade mark protection The landscape of trade mark application pro - ceedings is evolving, yet the deficiency in pres - ervation and enforcement measures remains a significant challenge for trade mark protection. The absence of robust mechanisms in terms of the following hinders the effective safeguarding of brand owners’ rights. • There are challenges in uncovering infringers’ property. To preserve or enforce judgments, trade mark owners have to file applications and provide detailed property information about the infringers, while the court lacks the authority. For example, to take action against an infringer’s bank accounts, trade mark owners must provide the bank’s name and address. However, it is difficult and burden - some for right holders to obtain such specific and confidential information about infringers.
• There are inadequate limits on infring - ers’ evasive tactics and high consumption. Infringers are adept at concealing or transfer - ring their illicit gains derived from trade mark infringements. Against this backdrop, the courts are often hesitant to conduct in-depth investigations in preservation and enforce - ment proceedings on the one hand but on the other, high consumption limits imposed on individuals and directors/senior manage - ment of corporations have proven insufficient to prevent evasion of liability, as the infringers can still find ways to circumvent these restric - tions. These factors hinder trade mark owners from recovering damages even after securing civil judgments. • Right holders lack awareness of the necessity to preserve the infringing goods for destruc - tion. Their claims typically focus on stopping infringement, destroying infringing goods and obtaining economic compensation. Accord - ingly, most plaintiffs only preserve the infring - er’s assets for monetary compensation, while not requesting the court to preserve poten - tially infringing goods. As a result, the court is unable to ascertain the exact scope of infring - ing property during enforcement proceedings, which eventually affects compensation for trade mark owners. • The financial burden of preservation guar - antee is heavy for trade mark owners. Some courts demand a guarantee as a prerequisite for issuing preservation orders, typically rang - ing from 20% to 30% of the value of the pre - served property. In cases involving substantial assets like real estate, this requirement can be onerous, significantly increasing the litiga - tion burden for trade mark owners. The effectiveness of preservation and enforce - ment in trade mark infringement cases is cur - rently unsatisfactory. There is an urgent need to
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