Introduction

2019 was the 70thyear of the founding of the People’s Republic of China. The same year saw theunfolding of the People’s Courts’ Fifth Five-Year Reform Programme (2019–2023).Guided by General-Secretary Xi Jinping’s thought on Chinese socialism for thenew era, the courts implemented the decisions and essential values of the 19thNational Congress of the Communist Party of China (“Party Congress”) and of thesecond, third and fourth plena of the 19th CCP Central Committee. They havealso continued to foster the “four aspects of consciousness”, the “four mattersof confidence” and the “two pillars to safeguard”, never losing sight of theiroriginal aspirations and mission. They pursued the national goal of building acomplete xiaokang society, discharged adjudication duties based on thelaw and the constitution, and intensified reform of the adjudication system toimprove adjudication efficiency, effectiveness and judicial credibility. Theyhave also ensured efficacious discharge of their adjudication duties. Havingdedicated significant effort to building an effective team, the courts rebootedand renewed the intellectual property adjudication regime to further elevatethe credibility and impact of China’s intellectual property adjudication at theinternational level. By continuing to modernise the intellectual property adjudicationregime and capacity, the courts have also enabled the delivery of robustjudicial services and enactment of judicial safeguards to underpin thecountry’s innovation-driven development and creation of a pro-businessenvironment.

I. Leveraging the adjudicationprocess for more effective protection

The 19th CCP Central Committee’s fourth plenary session issuedimportant directives to advance Chinese socialism and modernise the nationalgovernance system and governance capabilities. The session also gave instructions forthe country to improve systems and mechanisms to encourage technologicalinnovation, redouble efforts to build an innovation-based country andstrengthen national strategic technologies. To elevate China’s technologicaland innovation capabilities, drive quality economic growth and implement ourinnovation-driven development strategy, we need greater protection and utilisationof intellectual property to fashion an effective incentive structure. As thecourts “strive to make the people feel fairness and justice in every judicialcase”—a goal that centres on the people and fair justice—intellectual propertyadjudication has become an important means to incentivise and protectinnovation.

In 2019, the courts have accepteda total of 481,793 cases, including first instance and second instance casesand applications for extraordinary legal remedy to reopen cases.475,853 cases(including carried forward cases) were concluded, representing a respectiveyear-on-year increase of 44.16 % and 48.87%.

(I) More effective adjudication ofcivil disputes

Given the essential role ofintellectual property adjudication in protecting innovation and in levellingthe competitive playing field, adjudication has focused on encouragingtechnological innovation, promoting cultural transmission and maintainingmarket order to provide clear, consistent and predictable rules to guideadjudication and instil confidence among entrepreneurs and innovators.

In 2019, the Supreme People’s Court accepted2,504 new civil intellectual property cases and concluded 1,976 cases, respectively174.26% and 260.97% higher than the previous year. In the same year, the localcourts accepted 399,031 and concluded 394,521 first instance civil cases, wherethe respective year-on-year increases were 40.79% and 44.02%. Among the newlyaccepted cases, 22,272 were patent cases (2.64% year-on-year increase); 65,209 trademark cases (25.41% year-on-year increase); 293,066 copyright cases (49.98% year-on-year increase). There were also 3,135 cases ontechnology contract disputes, (16.98% year-on-year increase) and 4,128 unfair competitioncases, including 70 monopoly cases, (49.71% year-on-year increase). Other civil intellectualproperty disputes constituted 11,221 cases, or 49.71% more than last year. Forsecond instance cases, 49,704 were accepted and 48,710 concluded, translatingto a year-on-year increase of 79.95% and 85.29% respectively.

High profile civil disputesinvolving intellectual property heard and concluded by the courts during theyear include:

French automotive parts manufacturer Valeo Systemes D’Essuyage(plaintiff- appellee)vs. Lukasi Car Accessories(Xiamen) Co. Ltd (respondent-appellant) and Fuke Car Accessories (Xiamen) Co. Ltd. (respondent-appellant)et al. involving a utility patent infringement dispute; HondaMotor Company (plaintiff-appellee- petitioner) vs. Hengsheng Xintai (Chongqing) Trade Company (respondent-appellant-petitionee), Hensim (Chongqing)Group et al. (respondent- appellant-petitionee) involving a trademarkinfringement dispute; Hemujia Medical Management Consultancy(Beijing) Co., Ltd (plaintiff,-appellant-petitioner)vs. Hemujia Obstetrics andGynaecology Hospital (Fuzhou)(respondent-appellee- petitionee) involving unfair competition; Cai Xinguang (plaintiff-appellant) vs. RunpingCommerce (Guangzhou) Co., Ltd(respondent-appellee) involving infringement of new plant variety; and copyrightinfringement case of ShanrenSculpture (Hebei) Co., Ltd(plaintiff-appellant) vs.Zhongding Garden Sculptures (Hebei) Co., Ltd et al. (respondent-appellant) and the People’s Government of Sanhe Township, Bozhou District, Zunyi Cityet al. (respondent-appellee).

(II) More rigorous legality review ofadministrative actions

The courtshave strengthened legality review of intellectual property granted andvalidated by administrative authorities and of administrative enforcementactions. In 2019, the Supreme People’s Court accepted1,066 intellectual property cases involving administrative disputes andconcluded 884 cases. Compared to last year, the number of cases has risen by70.83% and 52.15% respectively. The same year saw local courts accepting 16,134first instance administrative cases (19.11% increase year-on-year), 1,661were patent cases (8.14% increase year-on-year), 14,457 trademark cases (20.56%increase year-on-year) and 16 copyright cases. 17, 938 first instance caseswere concluded (89.74% increase year-on-year). Local courts also accepted 7,304(104.88% increase year-on-year) second instance administrative cases, and 5,942cases were concluded (84.71% increase year-on-year), of which, decision wasupheld for 4,791 cases, first instance judgement was amended for 1,026 cases; 4cases were remanded for retrial, 613 cases withdrawn, and 132 cases overruled.

High profileintellectual property-related administrative disputes heard and concluded bythe people’s courts during the year include Huawei. Technologies, Co, Ltd(plaintiff-appellee) v. Samsung Electronics Co, Ltd (Thirdparty-appellant) and CNIPA (respondent) involving an administrative overthe invalidation of a patent; and Kangzhi Lesi Network Technology (Beijing)Co., Ltd (plaintiff-appellee-petitionee) v. Meiyou InformationTechnology (Xiamen) Co., Ltd (third party-appellant-petitioner) and CNIPA(respondent-appellant) involving an administrative dispute over theinvalidation of a trademark.

(III) Stricter sanctions onintellectual property crimes

Intellectualproperty crimes were subject to more rigorous adjudication   toclean up the market, therefore better defend intellectual property fromcriminal infringement.

In 2019, thelocal courts accepted 5,242 first instance intellectual property-relatedcriminal cases, 21.37% higher than last year, including 4,982 cases relating toinfringement of registered trademarks ( 21.01% increase year-on-year), and 210 oncopyright infringement (34.62% increase year-on-year).

At the locallevel, 5,075 first instance cases were concluded during the year (24.88%increase year-on-year), including 2,134 cases involving counterfeiting ofregistered trademarks (15.23% increase year-on-year), 2,279 cases involvedselling goods bearing counterfeit registered trademarks (32.19% increaseyear-on-year), 423 were cases of illegal manufacturing or sale of goods bearingillegally produced registered trademarks (38.69% increase year-on-year); 1 caseinvolved counterfeiting patents, 191 were criminalinfringement of copyright, (40.44% increase year-on-year), 8 involved sellinginfringing reproductions (33.33% increase year-on-year), and 39 involved trade secret infringement crime (no changefrom last year).

For second instance intellectual propertycases involving criminal offences, the local courts accepted 808 cases (18.30% increaseyear-on-year), and 807 cases were concluded (23.70% increase year-on-year).

High profile criminal cases involvingintellectual property heard and concluded by the people’s courts during theyear include: Yang Fengming, Yang Maogang et al. for counterfeiting aregistered trademark; Lin Yixiang et al. involving infringement of tradesecrets; Xu Zhenwei et al. involving counterfeiting of registeredmark; and Chen Li et al. involving trademark infringement.

Intellectual property adjudication has madesteady progress in the year, and has scored higher in quality andeffectiveness. The key features for 2019 are:

New highs in caseload. Withincreased social awareness of intellectual property right and greatercredibility of the courts in adjudicating intellectual property disputes, thecourts have faced a spike in caseload. The total number of accepted andconcluded cases for the year 2019 were at historic high, both recording a year-over-yearincrease of more than 40%.

By geographical location, Beijing accepted80,165 cases, Shanghai 23,580 cases, Jiangsu Province 20,249 cases, ZhejiangProvince 27,706 cases and Guangdong Province 157,363 cases, totalling 309,063cases. This constituted 64.15% of China’s total case number and the greaterpart of the country’s intellectual property caseload. The areas that experiencedmore than 50% year-on-year increase in caseload were Hebei Province (53.53%),Anhui Province (60.30%), Fujian Province (64.88%), Guangxi Autonomous Region(98.49%) and Chongqing Municipality (173.66%). Despite facing manpowershortages, the courts have managed to dispose of a large number of cases duringthe year, with the total disposal number reaching historic high. Other thanbeing the most active regions, the courts in Beijing, Shanghai, JiangsuProvince, Zhejiang Province and Guangdong Province have also achievedcommendable disposal rates of more than 90%.

Continued emergence of new case genres. As the newround of technological revolution and industrial transformation rapidlyemerges, legal boundaries are increasing tested and pushed by new technologies,new products and new forms of business. New intellectual property issuesinvolving cutting-edge technology relating to the Internet, big data,artificial intelligence, standard essential patents, biomedicine have also continuedto emerge, requiring detailed examination of complex technological solutionsand creative application of the law, based on the merits of each case. Someexamples are:

The Supreme People’s Court: Heardpatent cases involving mechanics, material science, electrical engineering,communications, biopharmaceuticals, and fine-tuned the adjudication rules baseon the derived insights.

Beijing Intellectual Property Court: Heard andconcluded many significant and complex cases, including the first case relatingto the infringement of cloud servers, and preservation of evidence duringpre-trail for a case involving the infringement of a patent relating to the productionof stable lyophilised pharmaceutical composition.

Shanghai High People’s Court: Concluded Nokiavs. Shanghai Huaqin Communication Technology Co., Ltd involving the infringementof a utility patent. The case provides reference for tryingcommunications-related SEP disputes in the future.

Guangdong Province: The courtshave heard 63 patent cases, each involving a jurisdictional amount of more thanCNY 10 million, the aggregate amount of which was approximately CNY 8.18billion.

Continued to augment protection. The courtshave implemented the “Opinions on Improving the System of Property RightsProtection to Protect Property Rights According to Law” to provide more timelyand accessible judicial relief for intellectual property disputes, as well as tobalance the damages awarded with the market value of the intellectual propertyin question. Some exemplary efforts include:

Beijing: TheHaidian District People’s Court awarded damages of more than CNY 20 millionbased on discretionary valuation when Motion Scene (which operates UC browser)sued Sogou for using its Sogou Input Method to redirect the user to Sogou’ssearch website.

Inner MongoliaAutonomous Region High People’s Court: Increased the amountof damages from CNY 50,000 to CNY 1 million in the Guangdong Landai GroupBeijing Lanbao Beer Co., Ltd vs. Henan Honghuo Food Co., Ltd et al.trademark infringement case to sanction infringers more severely.

Zhejiang High People’sCourt: Ordered the respondent to pay CNY 8 million in damages for the Aupu ElectricalAppliances (Hangzhou) Co., Ltd and Aopu Home Furnishing Co., Ltd vs. Zhejiang FashionBuilding Materials Co., Ltd and Zhejiang New Energy Co., Ltd case involvingtrademark infringement and unfair competition. The court’s decision has protectedthe “AOPU” brand value.

Fujian Province: The courtsimposed punitive damages in the “JIU MU WANG (lit. ‘King of Nine Herds’)”trademark dispute and the “BOLIMO” trademark and unfair competition disputewhen the damages awarded were either doubled or trebled the amount forcompensatory damages.

Effects of judicial efforts were recognised. The courtshave done well in a series of complex and novel cases that attractedconsiderable public attention. The precedence would serve as classic cases thatare demonstrative and could guide future adjudication. Exemplary effortsinclude:

SPC IP Court: Issued decision forits first case immediately after the hearing, and the determination criteria forfunctional features were detailed in the written judgement. The hearing wasbroadcasted live and was widely reported by the media. Live streaming of thehearing—a case that took only 50 days to conclude from the date it was acceptedto service of judgement—attracted more than 18 million viewings. Opening up thecourtroom for public scrutiny has ensured fairness, transparency andefficiency.

Gansu High People’s Court: Concludeda new plant variety dispute involving a foreign party, thereby protecting thelawful rights of the plant breeder.

Shanghai Intellectual Property Court: Concluded aseries of cases, which include the utility patent dispute between NetacTechnology (Shenzhen) Co., Ltd and Transcend China (Shanghai) Co., Ltd. Thedisputes, which involved cutting-edge technology used in mobile storage and ajurisdictional amount of more than CNY 24.7 million, has attracted widespreadattention and much recognition.

Hunan Province: Adjudicated trademarkinfringement and unfair competition cases involving a wide range of servicesectors such as food and beverage, creative photography and department-storesales. The decisions provided direction for the regulated and reasonable use oftrademark by players in the food & beverage, department store and creativeindustries, which in turn supported the healthy growth of the service sector.

Remarkable ADR outcomes. The courtshave continued to turn to non-litigious alternative dispute resolution as theprimary means to settle dispute, and on promoting the new era FengqiaoExperience—a way of community-level social governance whereby public effortwas harnessed to maintain social stability. By actively encouraging the broaduse of ADR, parties were encouraged to resolve disputes through non-litigiousmeans by working together to find mutually agreeable and beneficial ways tosettle intellectual property disputes efficiently. Exemplary efforts include:

The Supreme People’s Court : Successfully mediated the trademark infringement case of Henan DukangInvestment Group vs. Shaanxi Baishui Dukang Company, and permanentlyresolved all cases relating to the “DUKANG” (believed to be a minister underthe mythological Yellow Emperor and originator of winemaking) trademark issue. Thecourt’s efforts have contributed to improving the stability of the local marketand providing protecting local businesses. It established a nation-widewhole-of-system coordinating mechanism to explore a circuit adjudication modelcombining the workings of an IP court and a circuit court, and an adjudicationmechanism combining onsite examination (kanyan) and hearing, and hassince facilitated the unified settlement of 48 related cases nationwide. Italso enabled the efficient resolution of 80 patent infringement cases at thepre-trial stage. The court’s efforts have made litigation easier and enabledthe Fengqiao Experience to enrich the intellectual property sector.

Beijing: Continued to drivereform of the “ADR + expedited procedure” as part of the city’s effort tomodernise the capital city’s social governance system and governance approach.

Jilin Province: The courts focused onusing mediation to resolve disputes. Total mediation rate for intellectualproperty disputes was 75%.

Anhui High People’s Court: Succeededin mediating the dispute between China Broadcasting Satellite TV and ChinaTelecom Anhui Branch concerning the infringement of broadcasting right, with ajurisdictional amount exceeding CNY 100 million.

Shandong Province: The courts implementedthe “Regulations to Promote Use of Alternative Dispute Resolution for ShandongProvince” and worked at developing a platform to align litigation withmediation.

Hubei Province: The courts coordinatedresources and established mediation platforms comprising administrative organs,lessors of the site where infringement occurred, industry associations, attorney-mediationorganisations to facilitate mediated settlement of disputes.

Sichuan Province: The courts enteredinto a cooperation agreement with the China (Sichuan) Intellectual PropertyProtection Centre to develop a mechanism to provide coordinated protection ofintellectual property. Under the agreement, the centre was appointed to mediateintellectual property-related disputes.

Yunnan Province: The courts establisheda pre-trial mediation system for intellectual property cases to enable theprompt resolution of a certain proportion of intellectual property disputes.

Liaoning Province: The courts beefed upexisting ADR mechanism by using pre-trial mediation for copyright, trademarkand unfair competition cases if the facts are clear and minimally disputed. Themechanism has enabled the courts to align litigation with mediation.

Xinjiang Autonomous Region: The courtsfocused on using mediation to settle dispute, translating to a rather highpercentage of post-mediation withdrawal rate.

II. Intensified supporting measuresfor judicial reform and built a more robust intellectual property justicesystem

In 2019, the courts leveraged the “Opinions on Several Issues on Reformand Innovation Relating to Intellectual Property Adjudication” to develop moreinnovative theories and institutions and adopt more innovative practices. Asuite of relevant reforms was also instituted as part of the courts’ effort tocontinue building better systems and mechanisms for intellectual property.

(I) SPC IP Court off to a flyingstart

Creatingthe Intellectual Property Court (SPC IP Court) within the Supreme People’sCourt was an important move by the Party Central Committee, with Xi Jinping asthe core, based on the strategic vision of building an intellectual propertypowerhouse and a high-tech global superpower. It was an important milestonemarking a major breakthrough and innovative step in our intellectual propertyadjudication system.

2019 isthe SPC IP Court’s first year of operation. As an agency tasked to hear all appealcases of technology-related intellectual property disputes, the SPC IP Courthas overcome the early difficulties to drive comprehensive progress bylaunching copious reform initiatives that have scored preliminary successes.

First, it unified adjudication standards . Unificationof adjudication standards was the primary objective of creating the SPC IPCourt. The “Rules of Implementation of a Unified Adjudication Standard for the IntellectualProperty Court of the Supreme People’s court”, among others, was developed toensure that the entire process, from preliminary analysis to mid-processcontrol, final review and approval and stringent management of important cases,were well- administered. Also, the “Minutes of the Conferences of Judges” werecompiled and “Guidelines on Case Operations” prepared and distributed to unifyadjudicative standards and methods for handling similar cases.

Second, it explored combining the hearing of administrative andcivil disputes. Disputes relating to civil infringement andadministrative validation involving the same patent was heard by the sameadjudication panel to ensure alignment of the civil and administrativeprocedures and consistency of adjudicative standards.

Third, it optimised the mechanism for adjudicatingtechnology-related intellectual property disputes. Living by itsmotto of people-centredness and being dedicated to delivering optimaladjudication management, the court leveraged its advantage as the centralcoordinating authority and the “1+76” hierarchical structure to resolve linkeddisputes within the country.

Fourth, it continued to develop the multiprong technicalfact-finding mechanism. By coordinating technical investigationresources in the country, including more than 360 technical investigators frommore than 30 technical fields, the SPC IP Court worked at alleviating theproblems faced by the courts, including inadequacies in technical investigationfor the less-developed regions and the lack of specific technical expertise in developedregions.

Fifth, it strengthened informatisation and adoption of smarttechnology. The court has built case and adjudication rules databases,and created smart platforms such as the “Big Data Intellectual PropertyAnalysis Platform”. It also explored the creation of an “IP CourtCloud”. These were endeavours to meet the demands of parties for onlinesubmission of evidence and online reading of case files, and would become the technologicalbedrock for adjudicating technology-related intellectual property disputes.

(II) Steady progress in development ofintellectual property courts

Toimplement the National People’s Congress (NPC) Standing Committee’s reviewopinions on the progress of local intellectual property courts, the SupremePeople’s court continued to provide more guidance for the Beijing, Shanghai andGuangzhou intellectual property courts, which have continued to make smooth progressand achieve remarkable outcomes.

Sincetheir establishment at the end of 2014, the intellectual property courts haveaccepted more than 100,000 cases and heard intellectual property cases of internationalimpact and which are important basis for crafting adjudication rules. They werealso instrumental for improving the quality and efficiency of hearings,ensuring consistency in decisions, and facilitating innovation-drivendevelopment. The courts have also leveraged their functional positioning toexplore bold and innovative initiatives to drive judicial reform thatengendered a new intellectual property adjudication landscape. The reforms alsoenabled specialisation, an important feature that has helped buttress judicialprotection for intellectual property.

(III) Continued optimisation ofmechanism governing trans-regional jurisdiction

Since2017, specialised judicial organs (IP divisions) were established within 21intermediate courts, such as the Nanjing Intermediate People’s Court, to facilitatecentralised jurisdiction over certain categories of trans-regional firstinstance intellectual property cases and enable specialised intellectualproperty judicial organs to be rationally distributed. The IP divisions havededicated themselves to exploring innovative initiatives and to improving thelevel of specialisation, an important effort that would drive the co-ordinateddevelopment of the Beijing-Tianjin-Heibei (Jing-Jin-Ji) region, and the developmentof the Yangtze River Economic Belt and the Guangdong-Hong Kong-Macao GreaterBay Area (Greater Bay Area). Exemplary work by several local IP divisionsinclude:

Nanjing:Conducted circuit trials, implemented specialised and centralised adjudication,and responded to the demands of high-tech industrial parks to protect theintellectual property of business innovations.

Hangzhou:Leveraged internet technology and established a trans-regional cooperationmechanism to facilitate access to online hearing and standardised applicationof the law.

Zhengzhou:Digitised processes such as introduction of online filing and acceptance ofcases, electronic service of documents and WeChat mediation to overcome timeand spatial constraints, as part of its effort to provide easy access and to increasethe level of informatisation.

Shenzhen:Capitalised on the city’s geographical advantage to strengthen judicialprotection of intellectual property by participating in the development of theGuangzhou-Shenzhen Science and Technology Innovation Corridor and the PearlRiver Delta National Demonstration Zone for Home-Grown Innovation.

Haikou: Tookthe initiative to protect intellectual property by establishing circuit-courtstations and contact points for judicial services within different parts of theprovince.

(IV) Continued rolling-out of moremeasures for the “three-in-one” intellectual property adjudication system

In 2019, the courts implemented the “Supreme People’s ‘s Opinions onPromoting ‘Three-in-One’ Adjudication of Intellectual Property-Related Civil,Administrative and Criminal Cases” to further consolidate the results of the”three-in-one” reform.

SupremePeople’s Court: Reviewed case files relating to intellectualproperty crime to distil first-hand information on criminal adjudication. Thiswill allow more in-depth examination of the norms of adjudicating intellectualproperty criminal offences, based on which, the relevant judicial interpretationscould be revised and improved.

JiangsuHigh People’s Court: Initiated a study relating to the sentencingof intellectual property crimes to provide reference for standardising the useof sanction discretion and in sentencing.

ZhejiangProvince: Since 1 November 2019, all the courts in Zhejiang Province haveimplemented the “three-in-one” adjudication procedure. 260 criminal offencesand 41 administrative disputes were heard during the year.

HainanHigh People’s Court: Initiated research studies on using designatedjurisdiction for intellectual property criminal offences, and clarified the jurisdictionmechanism for “three-in-one” adjudication for intellectual propertycases.

(V) Continued improvement oflitigation procedures

The People’sCourts worked on improving the rules of procedure based on the merits ofindividual intellectual property cases and on developing an optimaladjudication approach to overcome institutional obstacles.

First, giving reasonable guidance in evidenceproduction. The courts have developed innovative measures tostrengthen the burden of proof by enabling ex-officio investigation andcollection of evidence to effectively reduce the costs borne by right-holders.

Shanghai High People’s Court: Explored the use of an evidenceproduction order such that any behaviour that obstructed the production ofevidence would be punished under the law.

Hunan High People’s Court: Regulated policies and proceduresrelating to investigation orders for lawyers.

Hainan High People’s Court: Parties were encouraged to make fulluse of third-party means such as notarisation and electronic data platforms tocollect and preserve evidence.

Second, building a more robust fact-findingmechanism. The courts have elaborated the ways which differentpersonnel could participate in the investigation of technical facts, and have mobilisedmanpower and resources to develop a dynamic and coordinated system for fact-finding.

Supreme People’s Court: Created a pool of experts comprisingtechnical investigators and technical advisory experts employed and appointedby the courts, and established a national mechanism for sharing oftechnical-investigation resources among the courts. It also launched the”Work Manual for Technical Investigators (2019)” to guide the courts intechnical fact-finding and regulate their technical fact-finding activities.

Beijing Intellectual Property Court: Established a”four-in-one” technical fact-finding mechanism, comprisingspecialised people’s assessors, technical investigators, expert assessors andforensic institutes.

Jiangsu High People’s Court: Entered into a framework agreementwith the Jiangsu Province Collaborative Innovation Centre for BiomedicalFunctional Materials, where the parties would cooperate on intellectualproperty-related technical fact-finding. The cooperation enabled the court toengage technical experts to assist in intellectual property cases.

Production and Construction Corps Branch of the Higher People’s Court ofXinjiang Uygur Autonomous Region: When preserving evidence,  professionals were engaged to survey thelocation and the planting area of infringing seeds, and to collect samples of infringingplants .

Hubei, Hunan, Sichuan and Shaanxi High People’s Courts: Formedexpert pools to tap professional expertise and improve the accuracy oftechnical fact-finding.

Third, optimisation of adjudication approach. Giventhe diverse judicial needs, the different levels of courts have sought tooptimise their adjudication approaches through a diversion mechanism that separatesthe complicated cases from simple ones, and that applies a unified standard whenapplying the law.

Beijing Intellectual Property Court: Implemented thespeedy trial mechanism, and introduced a pilot that judges would issue”abridged written judgments” for trademark review cases. Averagedisposal time was reduced by 30%.

Xi’an IP Division: Formed an adjudication team to conductspeedy trial, an approached that required only 20% of the manpower to hear 70%of the cases.

Chengdu IP Division: Explored the use of speedy trialmechanism for intellectual property disputes to better allocate adjudicationresources. The outcomes were encouraging.

Haikou IP Division: Implemented an integrated model ofoperations that combined case acceptance, adjudication and enforcement underone operational framework to improve adjudication quality and effectiveness.

Changchun IP Division: Introduced speedy and simplifiedtrials for copyright and trademark disputes. 84.8% of the cases were concludedwithin five months, and the adjudication cycle was substantially shortened.

III. Broadened judicial functions andcontinued improvement of research quality and effectiveness to guideadjudication

Always vigilant ofhot button issues, the People’s Courts have leveraged the Supreme People’sCourt’s Intellectual Property Judicial Protection Research Centre and itstheoretical research base to strengthen development of intellectual propertyprotection-related innovative theories and research of the relevant judicialpolicies. They have also actively participated in the revision of intellectualproperty-related laws and provided effective judicial supervision and guidance.

(I) More focus on providing legislativerecommendations

The courts haveactively participated in the revision of laws and regulations such as the CivilCode, Patent Law, Trademark Law, Anti-Unfair Competition Law, Copyright law,Regulations on the Implementation of the Trademark Law, and Regulations on theProtection of New Plant Varieties.

Other legislativeendeavours include participating in thefourth forum on Patent Law amendment, and CPPCC’s meeting on folkliterature and artistic works relating to the drafting of the amendments to theCopyright Law. The courts also initiated researches on a special procedure lawfor intellectual property litigation, established the general direction, basicframework and key content of the research.

(II) Intensified drafting of judicialinterpretation

The Supreme People’s Court issue the “Provisions on the Participationof Technical Investigators in Intellectual Property Litigation” setting forththe procedure, responsibility, validity, liability relating to theparticipation of technical investigators in intellectual property litigation.It also researched on topics such allocation of the burden of proof,investigation and collection of evidence, exchange of evidence, and examinationand determination of electronic evidence. The court also organised variousseminars on the drafting of judicial interpretation for punitive damages forintellectual property infringement, application of the Trademark Law and LawAgainst Unfair Competition, trade secrets, and national defence patentdisputes.

(III) More in-depth study of judicialpolicies

The courts participated in the drafting of the “Opinions onStrengthening the Protection of Intellectual Property”, allowing specialisedintellectual property adjudication organs such the Guangzhou IntellectualProperty Court and the Shenzhen Intellectual Property Division to play biggerroles, and stepped up cooperation in GBA-related intellectual propertyprotection and professional training. For Guangzhou Knowledge City (GKC), thecourts also pressed ahead with the national comprehensive reform pilotprogramme to better utilise and protect intellectual property.

To better serve the free trade zones, special studies on theprotection of intellectual property were conducted, based on which, 38initiatives relating to the judicial protection of intellectual property forthe development of free trade zones and free trade ports were proposed.

(IV) Leveraged the role of caseguidance

As part of its annual activities, theSupreme People’s Court published the “Annual Report on Intellectual PropertyCases (2018)’” and the “Top Ten Intellectual Property Cases Decided by ChineseCourts and Fifty Typical Intellectual Property Cases”. The publicationsindicate Supreme People’s Court’s priority in distilling universally applicableadjudication standards to guide judges. The court also organised a “JudgementWeek” during which the decisions of benchmark cases were issued in an opencourtroom so as to use new genre, difficult and complex cases to shape rulesand regulations. The endeavours of other courts include:

Shenzhen IP Division: Reviewed its experience from the reformfor speedy hearing of design patent disputes and selected 19 typical cases foranalysis.

Inner MongoliaAutonomous Region High People’s Court: Held a briefing to update on intellectual property adjudicationand to launch the compilation of typical cases heard by the court to regulateand guide market players. The court hoped to influence market players tooperate in good faith and ensure that the economic order of the market respectsfair competition.

Henan HighPeople’s Court: Published typical casesrelating to trademark and brand protection .

Sichuan HighPeople’s Court: Published for the firsttime a white paper on the judicial protection of the intellectual property of non-stateenterprises (minying qiye) and typical cases. The paper expounded the problemswith intellectual property protection that non-state enterprises have faced,the underlying causes, and provided recommendations.

(V) Intensified judicial researches

Diverse research methods. The SupremePeople’s Court collated big data relating to trademarks registered and usedduring the past five years, studied the measures regulating trademark squatting,and gave recommendations. It also convened discussions on image copyrightinfringement to examine the pronounced issues and addressed social concerns byproviding clear adjudication standards.

Liaoning Province: The courts conducted intellectual property-related studies on topicssuch as the Belt & Road Initiative and pilot free trade zones to find outwhat companies need in terms of judicial protection.

Zhejiang High People’s Court: Surveyed more than 20 companies within theprovince to effectively address the judicial protection needs ofinnovation-based businesses.

Heilongjiang Province: The courts conducted in-depth studies on non-state enterprises anddeveloped manuals to educate the public to better protect the intellectualproperty of private enterprises and drive the development of the privateeconomy.

Hunan Province: The courts took the initiative to meet the judicial needs ofenterprises and tech parks, and enhanced awareness among businesses ininnovation-based development.

Productive research studies. The Supreme People’s Courtinitiated  surveys relating to revisionof the Patent law, patent linkage, and business model innovation. The surveysculminated in research outcomes such as the “Recommendations on Reforming and ImprovingLegislation for Patent Invalidation Procedure”, “Recommendations on Legislatingfor Patent Linkage”, and “A Study on the Judicial Protection of Business Model Innovations”.Other research efforts include:

Beijing High People’s Court: Reviewed the guidelines for adjudicating administrativedisputes relating to the granting and validation of trademarks to guidelitigation behaviour.

Zhejiang High People’s Court: Conducted studies on adjudication rules forintellectual property disputes involving e-commerce platforms to share judicialexperiences relating to e-commerce business.

Fujian High People’s Court: Provided opinions on how the courtscould improve judicial protection of intellectual property to better serve and fosterinnovation, entrepreneurship and creation.

Jiangsu High People’s Court: Proposed more rigorous judicialprotection of intellectual property to underpin the province’sinnovation-driven economic development.

IV. Increased transparency of thecourts to augment credibility of intellectual property adjudication

The courts are fully aware of the need for transparency, and have maderemarkable progress in developing a judicial mechanism that upholds justicethrough enhanced transparency and that champions credibility, openness,dynamism, transparency and accessibility.

(I) A more open court system

The courts have opened up further to allow public access to courthearings. This is in line with the directive that open courts should be therule and closed courts the exception. They have also found innovative ways forthe public to access court hearings and expanded the types of hearing permittedfor public observation. Some exemplary practices are:

Guangdong High People’s Court: Held a public hearing on the dispute between Shenzhen-basedJiedian Technology Co., Ltd and Laidian Technology Co., Ltd over theinfringement of utility models. About 100 people attended the hearing. Livestreaming over the internet was also accessed by nearly 10,000 viewers.

Sichuan High People’s Court: Heard a trademark infringement dispute and issued decision withinthe same hearing session. People’s Congress deputies and members of the People’sPolitical Consultative Conference  wereinvited to the observe hearing.

Inner Mongolia Autonomous Region High People’s Court: Launched “On-Campus Hearing” where approximately 300teachers and students attended the hearing for a dispute over copyrightinfringement.

(II) Greater use of cases for publiclegal education

The Supreme People’s Courtparticipated in a production by the China Central Television’s (CCTV) entitled“Judge Talk (Dafaguan Shuo)” in the third season of “China Rule of Law (FazhiZhongguo Shuo)”. It was involved in the planning, scriptwriting, productionand recording, and broadcasting of the programme. This was an important joint-publicityeffort by the Supreme People’s Court and CCTV-12 in celebration of the 70thanniversary of the founding of the People’s Republic of China. Vice President ofthe Supreme People’s Court Justice Tao Kaiyuan gave a talk in one episode. Accordingto statistics, nearly 50 million viewers watched the live telecast of theprogramme. There were also 1,357 online news articles relating to theprogramme, 78 news articles published in newspapers and magazines, 151microblog comments, 99 blog articles, 2,238 WeChat articles, and 294 apparticles. The public applauded the court for its outstanding work inintellectual property protection.

The “WIPOCollection of Leading Judgments on Intellectual Property Rights: People’sRepublic of China (2011–2018)” was launched at the Second Annual WIPOIntellectual Property Judges Forum. WIPO’s legal counsel Frits Bontekoe spokeat the launch event. The forewords of the volume were written by WIPO DirectorGeneral Francis Gurry and Justice Tao Kaiyuan. This casebook of judgments givesthe global intellectual property community access to landmark judgments fromChina and allows China’s leading cases to play their demonstrative role and Chinesejudgements to create greater impact. Other key endeavours include:

The Supreme People’s Court:Organised a series of activities, including a Judgement Week and a “Judges Goon Campus” to make better use of cases to educate the public on the law, and instilgreater respect for knowledge and awareness of protecting intellectual property.When hearing important cases, the court also ensured that it invited NPCdeputies, CPPCC members, and SPC’s special supervisors and advisors as well as fellowsof the Chinese Academy of Sciences, lawyers and representatives of industryassociations to observe the proceedings and share their insights.

Beijing Xiong’an New AreaIntermediate People’s Court : Organised the “ProtectIntellectual Property Outreach Event” to educate businesses newly establishedin the area, such as Baidu, Tencent, JD and Huawei, on intellectual propertylaws and regulation.

Zhejiang High People’s Court : Established the “Zhejiang Balance (Zhejiang Tianping)” WeChat OfficialAccount, the “IP Converge (Zhi Zhi Hui)” website, and the “Zhejiang IPLaw Connect (Zhe Zhi Xi Fa)” column to lay the ground for regularoutreach activities. During the year, the court published 85 articles, and madeavailable live streaming of 26 hearings which boast of 900,000 visits.

Jiangsu High People’s Court : Organised a walkabout for the People’s Congress deputies and members of theCPPCC committee cum media event. The effort was effective and well-received.

(III) Joint outreach

The Supreme People’s Court organised the “IP JudicialProtection-Anhui Expedition”, for which selected NPC deputies, SPC’s specialsupervisors and Anhui Province’s leaders, together with the centralgovernment’s media agencies, visited some Anhui courts and key hi-tech companies.During their visits, the delegation learnt about the state of intellectualprotection in Anhui Province, innovative outcomes, and focused on discoveringthe judicial needs of commercial entities to better serve the development of innovation-basedbusinesses. Other outreach activities include the “IP Courtroom Open Day” and“IP Protection Judgement Week” during which many major cases involving advancedtechnology such as medical equipment, internet data mining and opticaltechnology were heard. The court also launched the “Faxin-IP” online project tocreate a unified big data intellectual property service platform by integratingand upgrading the existing intellectual property case guidance platform and throughresearch and development. The platform aims to provide free retrieval andconsulting services for intellectual property judges nationwide. Otherendeavours include:

Hebei High People’s Court : Combined 26-April outreach activities with the publicity campaign to promotethe “Regulations on the Protection of Olympic Symbols” to publicise extensivelythe relevant laws and regulations. It was a successful event.

Shanxi High People’s Court : Visited the province’s Comprehensive Reform Pilot Zone to find out the needs ofbusinesses and set forth requirements on how the courts should provideinnovative services to better serve businesses and create an environment thatconduces to innovation.

Tibet Autonomous Region HighPeople’s Court : Organised legal outreach activities in theChinese and Tibetan languages based on local folk customs and religious beliefsin interesting formats.

Ningxia Autonomous Region HighPeople’s Court: Organised outreach activities andconsultations, including providing on-site legal advice.

V. Greater cooperation and exchangefor greater impact in the intellectual property judicial landscape

Given the increasingly open andinclusive world, intellectual property adjudication should be based on China’snational circumstances, a global mindset, and an international vision. Itshould also promote the sharing of China’s experience and wisdom.

(I) Serving the needs ofinternational relations for the larger good

The Supreme People’s Courts has intensified thestudy of intellectual property issues emerging from foreign trade and economicnegotiations, and strengthened its adjudication guidance and supervision of thelower courts according to law.

Judges fromthe Supreme People’s Courts participated in bilateral and multilateraldialogues and exchanges, including negotiations on the “Convention on theRecognition and Enforcement of Foreign Judgments in Civil or CommercialMatters” adopted by the Hague Conference on Private International Law (HCCH). SPChas made important contributions to the satisfactory resolution of intellectualproperty issues relating to the Convention.

(II) Increasing China’s impact in theworld

In June2019, the Supreme People’s Court and WIPO co-organised the Seminar onApplication of WIPO Mediations Service in Intellectual Property Litigation,during which participants from WIPO, Singapore, the Supreme People’s Courts andour local courts shared their insights on WIPO’s alternative dispute resolutionmechanism. Director of the WIPO Arbitration and Mediation Centre Erik Wilberscommended China for being the organisation’s close partner. SPC alsoparticipated in the International Cooperation in Fighting against IntellectualProperty Right Infringement at the second China International Import Expo inShanghai, during which it shared the importance of using punitive damages todeter and prevent repeat and malicious infringing behaviour, as part of aneffort to engender a legal environment that fosters protection of intellectualproperty, that makes the infringer pay for its wrongdoing, and that sanctionsoffences.

JusticeLuo Dongchuan, Vice President of the Supreme People’s Court, held more than 20 constructivemeetings and discussions with representatives  from WIPO, AIPPI, AIPLA, ICJ, the SupremeCourt of Cuba and High Court of Justice in London. Francis Gurry,director-general of the WIPO, spoken favourably of the establishment of the SPCIP Court, and said that the court embodies China’s commitment to protectingintellectual property and its determination to provide fairer and moreefficient protection for intellectual property. Abdulqawi Ahmed Yusuf, Presidentof the International Court of Justice, commended that China’s achievements inthe legal sector was not only reflected in the country’s overall effort todevelop a robust legal system, its achievements in specific areas in field ofintellectual property also deserves admiration.

(III) Widened channels of foreigncooperation

In response to the global interest in how judicial protection ofintellectual property works in China, the People’s Courts have actively engagedin dialogues through different platforms to build understanding of China’ssituation and create greater impact at the international level.

To support WIPO’s collaborativeprogrammes, our judges participated in the Roundtable on WIPO-China Cooperationand Major Intellectual Property Developments in China. We havealso send representatives to participate in WIPO’sMaster Dialogue on IP Adjudication. A delegation of patent judges visited theEuropean Union. These were occasions at which our judges shared China’s latestdevelopment and historic achievements in intellectual property adjudication.Other international activities in the year include participating in the SecondAnnual WIPO Intellectual Property Judges Forum, 9th OECD/ Korea Policy Centre(KPC) Competition Law Seminar for Asia-Pacific Judges, AIPPI Annual WorldCongress, 2019 Annual Meeting of the International Trademark Association(INTA),and the European Communities TradeMark Association (ECTA) Annual Conference, and the Japan-China-Korea IPSymposium.

VI. Capacity-building for judges aspart of an incessant effort to improve adjudication capability

Political cultivation has always been the guiding light for the People’sCourts. By continuing to develop the judges’ political awareness and by takingbig strides to revolutionise the judiciary and putting together a team offull-time, professional and specialised judges, the courts have been working atbuilding a team of intellectual property judges that have a firm politicalstand, a holistic view and international perspective, and extensive legal expertiseand technical know-how. Organisational- and people-building are key to standingthe courts in good stead for intellectual property adjudication in the new era.

(I) Ideological and politicaleducation

Given that political cultivationis our priority, the courts have organised educational activities to remind everyoneof the motto: “Do not lose sight of our original aspirations; be mindful of ourmission (buwang chuxin, laoji shiming)”. Various institutions governingintraparty political activities were also harnessed to awaken judges to theneed to guard their original aspirations and to buttress their ability to fulfiltheir mission. Platforms such as the “New Knowledge Forum” and “Forumon Intellectual Property Court” were established to enable online andoffline education and management for party-development. The courts have also adopteda party-development approach for round-the-clock online and offline educationand management. The SPC IP Court’s party branch has also won the “100 Model ofExcellence” accolade presented by Banner (“qizhi”), a magazinepublished by the State Organs Work Committee of CPC Central Committee, for the secondParty-building Innovative Outcomes Award. It was the sole recipient of theaward within the court system.

(II) Developing a sense of honour andself-discipline

The courts have managed court and partyoperations based on rigorous standards, having implemented the “Eight-PointFrugality Code (‘ba-xiang gui-ding’)” and its rules of implementation.They have also stamped out “the four forms of decadence” (i.e.formalism, bureaucratism, hedonism and extravagance) or si feng, and havedeepened the development of party ethics and clean governance and their fightagainst corruption.

(III) Building judicial capabilities

By focusing on the overallrequirements of the “five excellences (wuge guoying)”, i.e.excellence in belief, political stance, sense of responsibility, ability andbehaviour, the courts have strengthened people development at every turn. Theyhave focused efforts at building a quality team of effective, loyal, incorruptand responsible individuals to helm the courts of the new era and drive newdevelopments. The Supreme People’s court has also increased its involvement incoordinating and guiding the lower courts, and encouraged the courts to planfor the training and creation of a pool of professional intellectual propertyjudges, and the establishment of different of personnel exchange mechanisms. Toelevate judicial capabilities, the courts have also adopted many differentapproaches, including special training, thematic seminars, on-the-job training, exchanges and secondment, andobservation of court proceedings. These efforts will help build an adjudicationteam that believes in perpetual learning, which will in turn enable the courtsto adapt to new circumstances and the demands of intellectual propertyadjudication, and judges to continue building their professional capabilities.

Conclusion

Today’s world is defined by unprecedented changes which quicken the paceof reform of the global governance system and the international order. As thenext wave of technological revolution and industrial reform arrives withastonishing force, protection of intellectual property is confronted with newissues, new tasks and new challenges. As the People’s Courts discharge theirduties and responsibilities, they will discern new trends and circumstances,and will leverage their judicial powers to protect intellectual property. They willalso strive to provide effective judicial service and safeguards to achieve sustainedand robust economic development and social stability, build a comprehensive xiaokangsociety, and bring the 13th five-year plan to a successful completion.

Introduction

In the Report to the 20th National Congress of the Communist Party of China, it was emphasized that pursuing high-quality development is one of the essential requirements of the Chinese path to modernization; it was clearly defined that innovation will remain at the heart of China’s modernization drive; and special deployment was made to strengthen the legal protection of intellectual property rights. In 2022, Chinese courts adhered to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, put the guiding principles from the 20th National Congress into action, and fully implemented Xi Jinping Thought on the Rule of Law, while keeping in mind the top priorities of the country. In order to make the people feel justice has been served in each and every judicial case, Chinese courts enhanced the sense of responsibility and mission in improving the trial of intellectual property (hereinafter “IP”)cases in the new era and continued to improve judicial protection of IP rights.

1. Fully Utilized Trial Functions to Support Innovation-
   Driven Development

In 2022, Chinese courts focused on bolstering their trial functions, while trying various IP cases fairly and efficiently in accordance with the law. The courts newly accepted 526,165 IP cases of first instance, second instance, and remanded for retrial, and concluded 543,379 cases (including carried over cases, ditto hereinafter), a year-on-year decrease of 18.17% and 9.67%, respectively.

In 2022, local people’s courts at all levels newly accepted 438,480 civil IP cases of first instance and concluded 457,805, a year- on-year decrease of 20.31% and 11.25%, respectively. In these newly accepted cases, the number of patent cases increased by 23.25% to 38,970 respectively from the previous year; trademark cases dropped by 9.82% to 112,474 year on year; copyright cases decreased by 29.07% to 255,693; technology contract cases grew by 5.55% to 4,238; competition cases increased by 11.51% to 9,388; other cases of civil IP disputes fell by 15.66% to 17,717 year on year. In 2022, local courts newly accepted 46,524 civil IP cases of second instance, down 5.22% year on year; and concluded 46,563, up 2.41% on a year-on-year basis. The Supreme People’s Court newly accepted 3,786 civil IP cases and concluded 3,073, a year-on-year drop of 10.77% and 13.61%, respectively.

In 2022, local courts newly accepted 20,634 administrative IP cases of first instance and concluded 17,630, a year-on-year increase of 0.35% and decrease of 8.85%, respectively. Among those newly accepted cases, the number of patent cases increased by 3.65% to 1,876, trademark cases grew by 4 to 18,738, and copyright cases fell by 7 to 12. In addition, local courts newly accepted 5,897 administrative IP cases of second instance and concluded 7,285 , down 28.22% and 1.79% respectively compared to 2021. Of those cases, 5,518 were sustained, 1,650 were reversed, 3 were remanded for retrial, 78 were withdrawn, 10 were dismissed, and 26 were resolved in other means. The Supreme People’s Court newly accepted 1,456 administrative IP cases, a drop of 48.95% compared to 2021, and concluded 1,542, down 38% year on year.

Local courts newly accepted 5,336 criminal IP infringement cases of first instance and concluded 5,456, down 14.98% and 9.76% respectively. In particular, 4,971 trademark infringement criminal cases were newly accepted, and 5,099 were concluded, a year- on-year drop of 15.3% and 9.86%, respectively; 304 copyright infringement criminal cases were newly accepted, and 302 were concluded, down 8.71% and 7.93%. Other criminal cases newly accepted reached 61, and 55 were concluded, down 13 and 6 respectively compare to the figures of 2021. Local courts newly accepted 979 criminal IP cases of second instance and concluded 977, a decrease of 6.76% and 2.01% compared to 2021, respectively.

In 2022, IP cases accepted by Chinese courts are mainly characterized by the following features:

The number of technology-related cases continued to increase, the demand for IPR protection in central and western China was high, and the importance of IPR judicial services to high-quality development was emphasized further. In 2022, the IP Court of the Supreme People’s Court continued to accepted a significant number of new civil non-procedural cases in second instance involving technical IPRs. Significantly more case of first instance involving patent and technology contract were accepted by local people’s courts at all levels. Courts in Jiangsu province newly accepted 1,817 new cases of disputes over ownership and infringement of technical IP rights, a 17.61% increase from the previous year. Year-on-year; the number of new IPR cases received by the courts in Shanxi province and Hainan province rose by 22.21% and 72.58%, respectively. In Hebei province, the number of IP cases newly accepted and concluded by local courts increased by 45.94% and 106.01% year on year. The number of new civil IPR cases received in courts of Liaoning province increased by 61% annually. The number of new civil IPR cases of first instance accepted by courts in Jiangxi province increased by 22% compared to 2021. In addition, the number of cases accepted by the courts in Hunan province, Heilongjiang province, and the Xinjiang Production and Construction Corps (hereinafter; referred to as “XPCC”)also continued to grow steadily.

The Internet online trial mechanism for IP cases continued to see innovations, the development of smart court architecture was fostered, and the mechanism for convenience and benefit of the judiciary improved. Online trial platforms were leveraged by local courts to facilitate online court hearings, services, and other legal processes of IP cases, which shortened the duration of litigation and reduced litigation costs. For instance, courts in Shanghai accepted 38,505 IP cases online, with over 20,000 online court hearings and meetings and more than 170,000 electronic services. Courts in Henan province recorded an online filing rate of over 90%, with 16,023 IP first instance cases were filed online. In Qinghai, the online filing rate for IP cases reached 62.7%, with 898 electronic services were conducted via the service platform. In Guangxi, the Intermediate People’s Court of Guigang utilized digital technology to have approximately 70% of all accepted IP cases filed online annually. The Qingdao Intellectual Property Court developed an online asynchronous evidence cross-examination system, which enabled relevant parties to upload electronic evidence online and complete cross-examination, thereby streamlining pre-trial procedures.

The substantive resolution of disputes by Chinese courts continued to be strengthened, and the protection of the rights and interests of rights holders became more comprehensive, increased public satisfaction with the judicial protection of IP rights. Local Chinese courts mediated and resolved 44,155 civil IP cases of first instance, a mediation and resolution rate of 9.64%, up 0.78% compared to 2021. Additionally, 2,894 civil IP cases of second instance were mediated and resolved at a rate of 6.22%, an increase of 0.57% from the previous year. Notably, the rates of mediation and withdrawal of IP cases recorded by courts in Tianjin, as well as Hebei, Guangdong, and Heilongjiang provinces were particularly high, reaching 75.51%, 73.48%, 52.94%, and 66.6%, respectively. The high rates of withdrawal reflect the effective reduction of the burden on litigants and the complete maintenance of social stability and harmony. Courts in Jiangsu province heard 97 IP cases in which punitive damages were applied, up 21.25% year on year; the Primary People’s Court of Pudong New Area of Shanghai applied punitive damages in 25 cases; a total of 169 million yuan was awarded as punitive damages for 29 IP cases heard by the Intermediate People’s Court of Shenzhen; local courts in Hunan province conducted a special judicial campaign and concluded 3,796 cases involving IP rights, with 60.4315 million yuan awarded; in Guangdong province, less than 20% of civil IP cases accepted by local courts resulted in forced enforcement, with a 98% enforcement and closing rate. In response to IP infringement in critical areas influencing people’s livelihoods, such as food and drug production, courts in Jiangsu province issued nearly one hundred orders prohibiting the relevant entities from engaging in the specified industry. According to the relevant applications, the Intermediate People’s Court of Guiyang in Guizhou province heard 25 IP preservation cases and froze properties worth 40.1 million yuan last year. The cost of IP infringement increased dramatically, and rights holders were effectively compensated for their losses.

More cases were accepted by courts at lower levels. The quality and effectiveness of IP case trials have improved as a result of jurisdiction diversity of intermediate and high courts. In Jiangsu province, primary people’s courts heard 65.25% of all IP cases in the province, an increase of 10.52% year on year. Meanwhile, the proportion of cases heard by intermediate and high courts dropped to 31.56% and 3.19%, respectively. Similarly, in Chongqing, the number of IP cases newly accepted by primary people’s courts accounted for 75.2% of all IP cases in the city, up 28.1% compared to 2021; the proportion of cases heard by intermediate and high courts, in contrast, decreased by 29.9% to 21.3% and increased by 1.8% to 3.5%, respectively. This demonstrates the gradual formation of a “pyramid” pattern with respect to the trial of IP cases. Of the first- instance civil IP cases concluded by local courts, 320 cases were concluded under the elevated jurisdiction of higher courts, more than three times the figure in 2021. 63 civil IP cases were submitted to a higher-level court in Jiangxi province, and 15 such cases that were submitted to a higher court in Guangdong province due to their novelty, complexity, or guiding significance in law application, thus effectively promoting the uniformity of judicial rules.

1. Encouraged and Assured Scientific and Technological
   Innovation to Promote Self-reliance and Strength

Speeding up efforts to achieve greater self-reliance and strength in science and technology is the path China must take to advance high- quality development. Chinese courts maximized the role speeding up efforts to achieve greater self-reliance and strength in science and technology is the path China must take to advance high-quality development. Chinese courts maximized the role of IP trials in

fostering and safeguarding scientific and technological innovation. Chinese courts provided high-quality judicial services to support basic research, protected original and pioneering scientific and technological advances, and eliminated obstacles that impeded high- quality development.

1. The Chinese Judiciary Continued to Promote the Unification of Judicial Standards in Technology-Related Cases

Concentrating on bolstering IP protection, Chinese courts conducted a more stringent examination of the legitimacy of administrative acts pertaining to patent granting and rights reexamination and promoted the application of unified administrative and judicial standards, thereby enhancing the quality of patent granting and rights reexamination. In 2022, Chinese courts maximized their responsibilities in rule-setting and value guidance for protecting achievements of scientific and technological innovation, summarized and proposed new judicial protection rules, and encouraged the continuous innovation and upgrading of technologies and industries. the Supreme People’s Court reasonably defined the trial functions of courts at four levels and specified that cases involving ownership and infringement disputes related to invention patents, utility model patents, new plant varieties, integrated circuit layout designs, trade secrets, and computer software shall be centrally adjudicated by the intellectual property courts, intermediate people’s courts of provincial capitals, and intermediate people’s courts designated by the Supreme People’s Court. This effectively promoted the nationwide application of consistent judicial standards in technology-related cases and improved judicial protection of significant scientific and technological innovations. The Supreme People’s Court released the Top 10 Intellectual Property Cases and 50 Typical Intellectual Property Cases in 2021, including 11 technology-related cases involving infringement of technology secrets, plant variety rights, and invention patents, which provided useful guidance for trial practices. In addition, the Supreme People’s Court conducted research on the implementation of judicial interpretations such as Provisions on Several Issues Concerning the Application of Law in the Trial of Civil Cases involving Patent Disputes Related to Drugs Applied for Registration in order to quickly summarize the trial experience. In the trial of the patent right ownership dispute over the “dust removal device and system for gasification furnaces’： the Supreme People’s Court defined the right basis for the source party and the technology improvement party. In the trial of the administrative dispute over the invalidity of the patent rights between Qilu Pharmaceutical and Sihuan Pharmaceutical, the judicial standards for the creativity of drug patents and adequate disclosure in specifications were clarified. In the trial of the infringement dispute over the utility model patent rights of the “integral geocell”, it was determined whether the defense concerning a legitimate source complied with reasonable diligence requirements.

2. Chinese Courts Committed to Facilitate and Protect Basic Research and Original Innovation

Based on the requirement that the frontier science and technology in the world should be integrated with the major national strategic needs, economic and social development goals and the livelihoods and wellbeing of the people, Chinese courts intensified IP protection in key areas, core technologies, and emerging industries. Meanwhile, the courts worked to ensure the legitimate rights and interests of innovators and provided judicial services to achieve breakthroughs in core technologies. The Supreme People’s Court implemented the arrangements of the Party Central Committee on the revitalization of the seed industry and issued the Guiding Opinions on Protecting the Intellectual Property Rights of the Seed Industry, Combating Infringement of Counterfeit and inferior goods, and Creating a Good Environment for the Revitalization of the Seed Industry jointly with the Ministry of Agriculture and Rural Affairs and other departments. In addition, the Supreme People’s Court released the second group of model cases from Chinese courts regarding judicial protection of IP rights in the seed industry, supported the establishment of the Base of Chinese Courts for the IP Protection in Germplasm Resource Research (Hainan), and held the Seminar of Judicial Protection for IP Rights in Germplasm Resource for the first time in the name of the Base. The case of the “Jinjing 818” rice plant variety infringement was selected as one of the “Top Ten Cases of Promoting the progress of the Rule of Law in the New Era in 2021.” The Supreme People’s Court concluded China’s first drug patent linkage lawsuit, which was nominated as one of the “Top Ten Cases of Promoting the progress of the Rule of Law in the New Era in 2022” and accelerated to shape and improve the drug patent linkage system. During the two related cases of patent and technology secret infringement involving “melamine,” the defendants were ordered to compensate the rights holders for a total of 218 million yuan in economic losses with several and joint liabilities, which reflects the judicial goal of vigorously protecting technological innovation. During the trial of the technology secret infringement case of “oil and gas microorganism exploration’； the Supreme People’s Court delivered a strong signal to improve the protection of technology secrets. The High People’s Court of Jiangsu Province, along with the competent provincial departments, signed a memorandum of understanding on “Building Strong Industrial Chains via IP Protection and Developing an Independent and Self­controlled Modern Industrial System,” which established a working mechanism to develop the key industrial chains. The Suzhou Intellectual Property Court facilitated a package settlement between the parties in a invention patent infringement dispute involving a US corporation, effectively protecting the legitimate rights and interests of innovators. The Hefei Intellectual Property Court met with administrative and law enforcement agencies as well as companies based in Anhui Province, to solicit and respond to commercial innovators for rights protection.

• Increased the Judicial Protection of Trademarks to
  Enable the Growth of Successful Brands

Chinese courts continued to strengthen the judicial protection of trademark rights, improved the trial quality of administrative cases on trademark registration and review, as well as civil cases on trademarks, and upheld the order of trademark application, registration, and use. They directed rights holders to register trademarks in compliance with the law, regulated the use of trademarks, and upheld the rule of law on the market, thereby encouraging the growth of successful Chinese brands in the new era.

1. Chinese Courts Improved the Quality of Trademark Registration and Review

In order to improve the trial quality of administrative cases involving trademark registration and review, steps have been taken to crack down on malicious trademark registration for the non-purpose of use. The boundaries and protective scopes of trademark rights were reasonably defined, and normalized, standardized procedures for trademark application and registration were promoted. The Supreme People’s Court and China National Intellectual Property Administration co-hosted a symposium to solicit opinions from courts across the country and provide sound suggestions and references for legislation work such as the revision of trademark laws and the legislation of geographical indications, as well as to promote the continuous improvement of the legal system for trademark regulations, which further improved the rules for trademark registration and review. The administrative case concluded by the Supreme People’s Court regarding the invalidation of the trademark “Chen Mahua” was selected as one of the “Top Ten Cases of Promoting the progress of the Rule of Law in the New Era in 2022’； which provided effective guidance for rulings of trademarks lacking distinctive features. The criteria for determining the distinctiveness of English trademarks were clarified during the retrial of the denied “BIODERMA” trademark application. In the case regarding the invalidation of the “Youlian” trademark, it was stated that trademarks violated the principle of good faith and failed to reasonably avoid prior registered trademarks should not be registered. Beijing High People’s Court established two distinct teams to try administrative trademark rejection review cases and administrative cases proceeding involving regular trademarks. This facilitated the intensive case management and reduced the average review time for administrative trademark rejection review cases to 35 days, making it possible to “quickly try simple cases, and scrutinize complicated cases.”

2. Chinese Courts Strengthened the Judicial Protection of Trademarks

People’s courts continued to strengthen the role of trademark using in determining the scope of trademark right protection and encouraged trademark owners to use trademarks in practice continuously to give full play to the identification function of trademarks, while protecting the legitimate rights and interests of consumers. In accordance with the law, the judicial protection of well-known trademarks, traditional brands, and time-honored brands was strengthened, and the development of brands was encouraged. The rules and regulations for protecting geographical indications were improved, and infringement on geographical indication rights were curtailed. During the trademark infringement case trial of the “Nanmiao” tofu, the Supreme People’s Court protected the legitimate use of the geographical name in the registered trademark by other operators. In the “Yipinshi” trademark infringement case trial, the abusive use of rights by maliciously obtaining trademarks and initiating infringement lawsuits was halted in accordance with the law. The organizing committee of the Beijing Winter Olympics and Paralympic Winter Olympics sent a letter of appreciation to Beijing High People’s Court and the Beijing Intellectual Property Court for supporting the protection of Olympic brands. The High People’s Court of Sichuan Province heard the “Qinhuajiao(green pepper)” trademark infringement case in accordance with the law, maintained the order of trademark usage, and safeguarded ethical business practices. To enhance judicial protection of geographical indications, the High People’s Court of Zhejiang Province launched a major research project initiative on the judicial protection of trademarks with geographical indications to enhance judicial protection of geographical indications. The Intellectual Property Court of Hainan Free Trade Port conducted research to develop a guide for judicial protection of geographical indications, exploring the integration of IP protection and rural revitalization. Beijing Xicheng District People’s Court visited time- honored brands within its jurisdiction and established a IP cases trial supervisory mechanism to promote time-honored brands rejuvenation.

1. Strengthened Copyright Trials to Contribute to the
   Building of a Country with a Strong Culture

People’s courts fully leveraged the guiding role of copyright trials in promoting outstanding culture, strengthened protection of copyright and related rights, promoted the development of culture and science, and contributed to the building of a socialist country with a strong culture.

1. Chinese Courts Vigorously Promoted Advanced Socialist Culture

Chinese courts continued to be dedicated to promoting advanced socialist culture based on their functions in judicial trials. They also facilitated the creative transformation and innovative development of fine traditional Chinese culture, and sparked the creative vitality for cultural innovation and creation, thereby bolstering the cultural- ethical driving force necessary to realize the great rejuvenation of the Chinese nation. Chinese courts heard cases involving the inheritance of classic Chinese revolutionary works and the protection of the legitimate rights and interests of heroes, heroines and martyrs according to the law, while vigorously promoting the core socialist values. Copyright protection for genetic resources, traditional culture, traditional knowledge, and folk art was intensified to promote the consolidation and utilization of intangible cultural heritage. Chinese courts prioritized copyright protection in new areas such as live streaming, short videos, animation and games, and cultural creativity, clamping down on piracy and plagiarism while promoting the prosperous development of cultural undertakings and industries. To improve the market environment for digital culture, courts in Beijing, Tianjin, and Shanghai, issued injunctions against behaviors such as the piracy of the Beijing Winter Olympics and the Qatar World Cup. The Suqian Intermediate People’s Court of Jiangsu Province analyzed the characteristics of local book piracy cases and submitted judicial recommendations to the administrative authority, which effectively reduced book infringements and piracies. The Intermediate People’s Court of Qinzhou, Guangxi, concluded a cross­provincial copyright infringement crime case involving the sale of pirated textbooks and reference books , which was selected as one of the Top Ten Typical Cases of Youth Copyright Protection in 2022. The Beijing Internet Court has released version 2.0 of the Tianping Blockchain-Copyright Chain co-governance platform, which achieved full coverage of digital copyright rights confirmation, authorization, transaction, and protection, thereby promoting the development of the copyright market in a healthy and orderly manner. The Quanzhou Dehua People’s Court in Fujian province established a “1-2-3-4” protection mechanism targeting ceramic IP rights to address 4 main challenges: evidence preservation, law enforcement & supervision, social recognition, and dispute resolution, which was formally acknowledged by the World Intellectual Property Organization (WIPO).

2. Chinese Courts Enhanced Judicial Protection of Copyright in the New Era

People’s courts fully implemented the Copyright Law to protect copyright and related rights. The Supreme People’s Court continued to summarize judicial experiences and conducted researches jointly with local courts, and drafted judicial interpretations of the Copyright Law to solve challenging legal issues in the field of copyright trials. The Supreme People’s Court heard and reversed the judgment on the copyright infringement case of the “Big-Headed Kid” artwork, which clarified the rules for determining copyright ownership and achieved positive social effects. In a case involving the jurisdiction query for the infringement of the right to disseminate works over the Internet, the Supreme People’s Court specified the jurisdiction of civil cases involving such infringement and the judicial interpretation application standards, providing sound guidance for copyright trial practices. Beijing High People’s Court provided a reply on determining the royalty standards for image infringement cases, which promoted the adoption of consistent judicial standards concerning similar cases in its jurisdiction. In Hubei province, local courts promoted the use of standardized table judgment in copyright cases, which significantly shortened the trial term. Sichuan High People’s Court and Chongqing High People’s Court jointly issued minutes to unify the judicial standards concerning infringement cases of the right to disseminate information over the Internet in their jurisdictions. Heilongjiang High People’s Court, along with 9 other government departments included the Heilongjiang Provincial Copyright Administration, jointly signed a notice to crack down on violations of the Copyright Law to strengthen criminal protection of copyright. Beijing Intellectual Property Court made well-coordinated efforts and mediated a series of lawsuits between companies regarding copyright infringement of Chinese academic literature network databases, settled over 1,000 cases in the city and properly resolving potential disputes.

1. Maintained a Sound Legal Environment for
   Competition to Stimulate Innovation and Creativity

People’s courts continued to enhance anti-monopoly and anti-unfair competition judicial efforts. By strengthening the fundamental status of competition policies, maintained a sound legal environment for fair market competition, optimized the business environment, in order to make contribution to the development of a sound system of socialist market economy.

1. Anti-Monopoly and Anti-Unfair Competition Judicial Efforts Improved

In 2022, People’s courts continued to improve the application rules in the field of competition, strengthened judicial trials concerning unfair competition, and maintained the rule of law in market competition. The Supreme People’s Court issued the Interpretation of Several Issues Concerning the Application of the Anti-Unfair Competition Law of the People’s Republic of China, which provided detailed rules regarding the Anti-Unfair Competition Law, including its General Provisions and articles on counterfeiting and confusion, false publicity, commercial defamation, and unfair competition on the internet, etc. Furthermore, the document also unified the relevant judicial standards and responded to the judicial needs arising from new fields and new business practices. The Supreme People’s Court researched and drafted new judicial interpretations on anti-monopoly civil litigation, solicited public opinions, and improved judicial rules for anti-monopoly cases, while clarifying the judicial standards for determining monopolistic behaviors. The Supreme People’s Court held a press conference on Chinese courts’ strengthening judicial practice of anti-monopoly and anti-unfair competition, The Court released 10 typical cases for each category to enhance the public legal awareness for respecting and protecting fair competition. Additionally, the press conference also guided courts at all levels to punish monopolistic behaviors and maintain the market order for fair competition. People’s courts at all levels enhanced judicial efforts in key fields and critical junctures such as platform economies, core technologies, medicine, and communication, cracked down on monopolistic agreements, as well as exclusive and restrictive competition behaviors with the abuse of market dominance. Chinese courts also refined the criteria for identifying monopolistic behaviors involving internet platforms, specified the rules for determining unfair competition behaviors such as traffic hijacking and interference, and regulated and directed capital operation in healthy manner in accordance with the law. During the trial of the “Zhang Bainian” case of trademark infringement and unfair competition dispute and the Bairui Runxing case of unfair competition dispute, the Supreme People’s Court clearly stated the responsibilities of sellers in disputes related to unfair competition. In the “kindergarten” case concerning horizontal monopoly agreements and the case involving the abuse of market dominance by public utility companies in relation to water supply and drainage, the Supreme People’s Court responded to public concerns regarding market competition behaviors that affect people’s livelihood and promptly forbidden exclusive and restrictive behaviors in competition, ensured that the public benefit from fair competition.

2. Healthy Development of the Digital Economy Promoted in Accordance with the Law

Efforts were made to explore and strengthen judicial protection of IP rights in the digital economy field, provide robust judicial services and guarantees to fully leverage the function of data, and improve the efficiency of data governance, thereby promoting high-quality development of the digital economy. Chinese courts improved hearings of cases involving data cloud storage, open-source data, data ownership, data trading, data services, and unfair competition in data markets to effectively maintain data security. In addition, research was carried out on IP rights judicial protection of data rights, as well as fair competition in the era of the digital economy, and local courts were guided to explore trial models catering to the demand of the digital economy and promote the judicial protection of innovative achievements in the digital economy. During the trial of the “web crawler platform data” case of technology secret infringement, the Supreme People’s Court specified that platform data can be protected as technology secrets, which strengthened the protection of data rights and interests with competitive advantages and values created by platform operators through legitimate business operations. Jiangxi High People’s Court produced opinions on IP judicial services to safeguard the development of the digital economy and proposed 13 measures of services and guarantees. Shenzhen Intermediate People’s Court of Guangdong province issued implementation opinions on enhancing judicial protection of IP rights in the digital economy, contributing to the high- quality development of the digital economy within the city. Beijing Intellectual Property Court concluded research including Research on Judicial Rules Regarding Competition Behaviors in New Business Practices and Models in the Digital Economy, properly closed multiple data infringement cases, continued to explore judicial rules where the Anti-unfair Competition Law is applied to protect data.

1. Deepened Judicial Reforms to Improve Efficiency
   and Quality of IPRs Protection

The judicial reform in IP domain was deepened by people’s courts, by continuing to improve the specialized trial system for IP cases, strengthening the IP litigation system, and deepening the “three- in-one” reform of IP trials. These efforts helped unify the legal application standards, enhanced diversified resolution of disputes, and improved the coordination between administrative enforcement and judicial practice, thereby enabling the comprehensive improvement of judicial protection for IP rights.

1. Promoted the Modernization of the Trial System to Boost Judicial Capacity

Led by the IP trial department of the Supreme People’s Court and backed by IP divisions of local courts, China’s specialized IP trial framework with 4 demonstrating IP courts and 27 IP divisions of local intermediate people’s courts as the focuses, saw further improvement. The Supreme People’s Court issued Several Provisions on the Jurisdiction of Civil and Administrative Intellectual Property Cases of First Instance, as well as its associated documents: Notice of Issuing the Standards for Civil and Administrative Intellectual Property Cases of First Instance under Jurisdiction of Primary People’s Courts, and Notice Regarding Issues Concerning the Appellate Jurisdiction of Cases Involving Disputes over Invention Patent and Other Intellectual Property Contracts. The documents established a judicial protection system with sound jurisdictional rules, reasonably defined the trial functions of courts at four levels, and optimized the allocation of trial resources. Currently, 558 primary courts, including Internet courts, have jurisdiction over civil IP cases. Meanwhile, the Supreme People’s Court continued to improve the appellate mechanism of IP cases at the national level, upgraded the retrial application procedures of IP cases, and intensified supervision and guiding to ensure the consistent application of the relevant laws and regulations. Local courts leveraged trial resources and jurisdictional mechanisms by elevating jurisdiction in accordance with the law to enable the efficient trial of IP cases and fully safeguard the rights and interests of the parties involved.

The Supreme People’s Court strengthened its guiding efforts to promote the “three-in-one” trial mechanism reform of civil, administrative, and criminal IP cases across 25 high courts, 236 intermediate courts, and 275 primary courts nationwide. In particular, 10 courts have achieved full coverage of the “three- in-one” trial mechanism for IP cases within their jurisdiction. the Supreme People’s Court conducted research to formulate normative documents on IP cases and issued the Interpretation on Several Issues concerning the Application of Law in the Handling of Criminal Cases Involving Infringement on Intellectual Property Rights (SOLICIT OPINION DRAFT) jointly with the Supreme People’s Procuratorate to solicit opinions from the public. Working with the relevant departments, Heilongjiang High People’s Court named the divisions which receive IP cases as IP divisions in the intermediate and primary courts, distributed implementation plans which guidelined the practical effect of the “three-in-one” reform. High courts in provinces including Anhui, Zhejiang, Henan, and Qinghai jointly issued guiding documents with the relevant provincial procuratorates and public security departments to improve jurisdiction over criminal IP cases, which established clear procedures and sound coordination mechanisms, thereby fully implementing the “three-in-one” reform target.

Chinese courts continued to improve the diversified technical fact­finding mechanism, and improved the “Database of Technical Investigation Talent for Chinese Courts”，with more than 500 technical investigators added to the Database. Additionally, the nationwide on-demand deployment and talent sharing mechanism saw continued improvements, effectively addressing the difficulties in ascertaining the facts of technology-related cases. High courts in regions such as Guangxi and Tibet introduced regulations on the engagement of technical investigators in IP cases and improved their institutional mechanisms according to local realities. Moreover, the IP courts in Nanjing and Suzhou fully leveraged the function of technical investigators by participated in the fact­finding investigation of 751 technology-related cases, conducted 66 inspections and preservations, and attended 490 trials and court hearings, with 388 technical investigation reports issued.

People’s courts enhanced judicial protection of IP rights. The Supreme People’s Court issued the Opinions on Strengthening Judicial Pro tection of Intellectual Property Rights of Traditional Chinese Medicine to facilitate the inheritance and innovative development of traditional Chinese medicine. Focusing on the characteristics of IP litigation, Chinese courts conducted researches to formulate specialized procedures law for IP lawsuits. Efforts were made to curb the abuse of rights and strengthen the protection of rights holders through specialized research on regulating malicious IP litigation and the accurate application of punitive damages. Shanghai High People’s Court issued opinions on handling IP cases involving small amounts to optimize and adjust the procedures for IP litigation and to try simple cases quickly and tough ones delicately. Guidelines for the application of punitive damages were drafted or issued by high courts and intermediate courts in Beijing, Shandong, Guangdong, XPCC, Inner Mongolia, and other regions, with typical cases published to promote the accurate implementation of the punitive damages system in accordance with the law.

2. Contributed to the Building of an Overarching IP Protection Framework

Chinese courts continued to improve the coordination between judicial trials and administrative law enforcement to enable the unification of judicial and enforcement standards. The Supreme People’s Court, jointly with government departments including the Supreme People’s Procuratorate, Ministry of Agriculture and Rural Affairs, Ministry of Commerce, Ministry of Culture and Tourism, State Administration for Market Regulation, China National Intellectual Property Administration, and National Administration of Traditional Chinese Medicine, improved coordination mechanisms and promoted institutional exchanges, data exchange, and information sharing. Additionally, the Supreme People’s Court released the Opinions on Strengthening Intellectual Property Appraisal jointly with departments including China National Intellectual Property Administration and the Supreme People’s Procuratorate to deepen cooperation between law enforcement departments and judicial organs in the field of IP identification. The Supreme People’s Court and China National Intellectual Property Administration co­released the Opinions on Strengthening the Coordinated Protection of Intellectual Property, including 13 specific measures to improve the coordination between administrative protection and judicial protection of IP rights. The High People’s Court of Shaanxi Province led the establishment of the Qinchuangyuan Intellectual Property Judicial Protection Center; involving 13 provincial-level government organs and academic institutions. The Center features a joint meeting system and offers a platform for cooperation. The Guangzhou Intellectual Property Court, Shanghai Intellectual Property Court, worked with China National Intellectual Property Administration, to explore the synchronization of administrative patent re-examination and infringement disputes hearings, shortening the trial cycle of patent infringement cases to improve patent protection.

Chinese courts accelerated the building of a diversified settlement mechanism for IP disputes, fully implemented the “head office to head office” working mechanism for the online connection between litigations and mediations, improved the system for the judicial confirmation of administrative mediation agreements, and built a joint force for protecting IP rights. Mediation organizations focusing on IP cases achieved full coverage in 30 regions across the country, with continued growth in the number of mediation organizations and mediators. People’s courts entrusted more than 90,000 IP disputes to pre-litigation mediation organizations, with a success rate of over 80%, effectively resolving IP disputes in China. The Supreme People’s Court intensified communication with departments including the National Copyright Administration, China Writers Association, and China Federation of Literary and Art Circles to promote the establishment of a “head office to head office” mechanism for the online connection between complaints and mediations in the field of copyright protection. Notably, the High People’s Court of Hebei province and Hebei Provincial Admiration for Market Regulation signed the Memorandum of Cooperation on the Judicial Confirmation of Administrative Mediation Agreements for Intellectual Property Disputes, which facilitated the resolution of 5 patent disputes through the mechanism. Courts in Shandong province handled 146 cases involving the judicial confirmation of administrative mediation agreements for IPRs disputes. The High People’s Court of Liaoning Province and the Liaoning Intellectual Property Office, co-issued the Notice on Establishing a Mechanism for the Online Connection Between Complaints and Mediations Involving Intellectual Property Disputes. After 11 mediation organizations set up, 110 mediators stationed and successfully mediated 2,834 IP disputes, a success rate of 96.29%. Heilongjiang High People’s Court and the Department of Justice of Heilongjiang Province co­founded an intellectual property arbitration court and issued the Notice on Properly Handling Arbitration and Preservation Cases in Accordance with the Law, which facilitated the integration of litigation, arbitration, and mediation, while strengthening well- coordinated governance.

The Supreme People’s Court endeavored to build regional mechanisms for IP protection, strengthen the development of IP integrity systems, and expand the promotion of the rule of law for the judicial protection of IP. The Court continued to guide relative courts to empower the coordinated development of the Beijing-Tianjin- Hebei region, the development of the Yangtze River Economic Belt, the integrated development of the Yangtze River Delta, the building of the Guangdong-Hong Kong-Macao Greater Bay Area, the full revitalization of Northeast China, and the building of the Hainan Free Trade Port, and the development of the Chengdu- Chongqing Economic Circle, thereby enabling well-coordinated regional innovation. The high people’s courts of Hunan, Hubei, and Jiangxi province established a cooperative working mechanism for trials in city clusters along the middle reaches of the Yangtze River. Under their guidance, intermediate courts in cities including Yueyang, Xianning, and Jiujiang signed cross-regional IP protection agreements with the competent market regulation departments to explore solutions to new challenges in cross-regional, large- scale, and collective IP infringement. The high people’s courts of Sichuan province and Chongqing jointly held the 2022 Sichuan- Chongqing Intellectual Property Protection Seminar to enable the integrated protection of IP rights in both regions. Beijing Intellectual Property Court, the Third Intermediate Court of Tianjin, and the Intermediate Court of Xiong’an New Area signed the Cooperation Framework Agreement on Strengthening Judicial Protection of Intellectual Property, a move that promoted cooperation including talent training, trial collaboration, and experience sharing. The Intellectual Property Court of the Hainan Free Trade Port sent judicial recommendations to the Hainan Administration for Market Regulation and the Intellectual Property Office of Hainan Province, publicly listing 12 individuals involved in 9 criminal cases of IP infringement as serious violators of IP laws. The Intermediate Court of Dalian in Liaoning Province sent judicial recommendations to the local administration for market regulation, publicly disclosing the information of 4 entities involved in intentional IP infringement. The People’s Court of Binhai New Area in Tianjin adopted new regulations to report persons subject to execution in IP cases who failed to fulfill their obligations to departments for market regulation, financial institutions, and industry associations. During Intellectual Property Promotion Week, the Supreme People’s Court held a press conference and planned a series of events to showcase the achievements of Chinese courts in providing judicial protection for IPRs from all angles, perspectives and depths. Courts in regions including Jilin, Gansu, Qinghai, Ningxia, and XPCC released well- planned typical cases and conducted events such as public hearings and public enforcement to encourage the general public to respect and protect IP rights.

• Upheld the Legal Equality in IPRs Protection
  and Promoted International Communication and

Cooperation

Chinese courts made greater efforts to establish China as a preferred venue for international IP litigation, properly tried major IP disputes related to international trade, and created an open, transparent judicial environment, as well as a sound market environment for fair competition, thereby contributing to a greater degree of opening up. In 2022, Chinese courts concluded nearly 9,000 IP cases of first instance involving foreign parties. During the trialing of administrative dispute case between Manolo Blahnik and China National Intellectual Property Administration regarding the invalidity of trademark rights, the Supreme People’s Court equally protected the prior rights of the foreign party and received a letter of appreciation from the Spanish Embassy in China. Courts in Jiangsu newly accepted 527 IP cases involving foreign parties, with a trademark infringement and unfair competition dispute involving a well-known foreign brand concluded in which punitive damages was awarded in accordance with the law, and upheld the foreign rights holder’s claim for compensation of 50 million yuan. In Guangdong, courts resolved a series of standard essential patent disputes involving foreign parties and assisted the parties reach global package settlement via mediation. The People’s Court of Siming in Xiamen, Fujian province, and the International Commercial Mediation Center for BRI established the “Intellectual Property Mediation Room of the Maritime Silk Road Central Legal District”, expanding the channel for mediating IP disputes involving foreign parties jointly.

Committed to building a community with a shared future for humanity, Chinese courts actively engaged in global IP governance under the framework of the WIPO in 2022, deepened judicial IP cooperation with other nations and regions, and pushed for the improvement of international rules and standards on IP rights. The Supreme People’s Court sent judges to participated in the Third China-ASEAN Justice Forum and the Fourth Session for the China-Singapore Supreme Courts Joint Working Group, and co­organized with the European Union the Seminar on Specialized Litigation Procedures for IP Cases. Judges were also sent to attended conferences including the 2022 WIPO Intellectual Property Judges Forum, the WIPO Assemblies Side Event: WIPO ADR for IPOs and Courts, the Fifteenth Session of the Advisory Committee on Enforcement (ACE), as well as the 13th Meeting of the Russia- China Working Group on Cooperation in Protection of IPRs, which was organized by the Ministry of Commerce of China. In addition, the Supreme People’s Court co-organized the Seminar on the Legal Application and Judicial Cooperation in IP Cases between China’s Mainland and Hong Kong jointly with the HKSAR Department of Justice, participated in the drafting of the China chapter of the WIPO International Patent Case Management Judicial Guide, and offered advanced courses through the WIPO Distance Learning Courses in Chinese. Fujian High People’s Court and the WIPO Arbitration and Mediation Center signed the Agreement on Strengthening Communication and Cooperation on Alternative Dispute Resolution for Intellectual Property Rights and formulated the corresponding coordination and working mechanisms.

• Leveraged the Guiding Role of Party Building to
  Build a First-Class Judicial Team

Committed to the political development of the Party, Chinese courts strengthened political loyalty, engaged in impartial and honest judicial practices, and endeavored to build an IP trial team of law and technology-savvy professionals with political integrity, big-picture thinking, and a global outlook.

The 20th National Congress of the Communist Party of China is a meeting of great importance. It takes place at a critical time as the entire Party and the Chinese people of all ethnic groups embark on a new journey to build China into a modern socialist country in all respects and advance toward the Second Centenary Goal. The 20 th National Congress draws a grand blueprint for advancing the great rejuvenation of the Chinese nation on all fronts through Chinese modernization, while making arrangements for improving the legal protection of IP rights. Chinese courts adhered to the absolute leadership of the Party on judicial work concerning IP. Gained a deep understanding of the decisive significance of establishing Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and establishing the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; Chinese courts endeavored to fully study, understand, and implement the guiding principles from the 20th National Congress. They have relied on Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era to enhance cohesion and forge the judicial soul. Upholding Xi Jinping Thought on the Rule of Law in judicial practices involving IR Chinese courts extensively conducted the “Two Establishes” themed education program to consolidate the progress made in learning the Party’s history and the education and rectification of political and legal teams. Furthermore, Chinese courts continued to promote the high-quality development of judicial work on IP.

Chinese courts strictly adhered to stringent prohibitions such as the “Three Provisions” and the “Ten Prohibitions” for political and legal officials in the new era. In 2022, Chinese courts implemented the “list of prohibited industries” to regulate the post-employment behaviors of the relevant officials, fully implemented the judicial accountability system, standardized the exercise of judicial power; and established the mechanism for the exercise of judicial power and supervision in the field of IP rights, thereby guaranteeing impartial and honest judicial practices. Last yea。Chinese courts continued to intensify education and training in an effort to enhance the political, theoretical, and practical competence of judicial officers, carry forward their fighting spirit and build up their fighting ability. The Supreme People’s Court held a press conference on the new judicial interpretations and judicial policies pertaining to IP rights to facilitate the accurate application of laws by local courts. In addition, the Court mobilized efforts to compile the IP and competition volume of the Application of the Civil Code of the People’s Republic of China and compiled summaries of judicial opinions to guide their trial practices. The high people’s courts of Sichuan and Chongqing jointly organized a training course on judicial protection of IP. Under their guidance, the Chengdu Intermediate People’s Court and the Chongqing No. 1 Intermediate People’s Court co-hosted a forum for IP judges. The High People’s Court of Yunnan Province and the

Yunnan Administration for Market Regulation jointly held a training course on administrative enforcement and judicial protection of IP rights to broaden the judicial horizons of IP judges. Focusing on the characteristics of border port cities, the Dandong Intermediate People’s Court of Liaoning Province collaborated with the customs department to enhance trial officials* knowledge of international brand protection.

Conclusion

2023 marks the first year for fully implementing the guiding principles of the 20th National Congress of the Communist Party of China. In IP trials, Chinese courts will continue to follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and fully acted on the guiding principles from the 19th CPC National Congress and the plenary sessions of the 19th Party Central Committee and thoroughly implemented the guiding principles from the Party’s 20th National Congress and the first and second plenary sessions of the 20th Central Committee. Chinese courts will practice Xi Jinping Thought on the Rule of Law across the board, gain a deep understanding of the decisive significance of establishing Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and establishing the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; enhance their consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment with the central Party leadership; stay confident in the path, theory, system, and culture of socialism with Chinese characteristics; and uphold Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and upheld the Central Committee’s authority and its centralized, unified leadership. Under the absolute leadership of the Party, Chinese courts will adhere resolutely to the path of socialist rule of law with Chinese characteristics and endeavor to ensure that the people perceive fairness and justice in every judicial case. Chinese courts will strive to increase their political awareness, consider the big picture, enhance judicial fairness and efficiency, prioritize self-discipline and team building, and provide impartial judicial services to the people on a consistent basis. This year; Chinese courts will “ strengthen legal protection of intellectual property rights in order to establish a foundational system for all- around innovation”； create an open, fair; just and non-discriminatory environment for the development of science and technology, as well as a world-class business environment that is market-oriented, law­based, and internationalized, thereby laying the groundwork for the construction of a fully modern socialist country.

Weekly China Trademark News Updates

June 28, 2023

1. The Beijing Intellectual Property Court released the Proposal on Online Submission of Litigation Materials in Electronic Format

On June 25, the Beijing IP Court released the Proposal on Online Submission of Litigation Materials in Electronic Format (“Proposal”), advocating that the parties should choose to use online litigation platforms to submit various litigation materials in electronic format as a priority.

The transition period for the said mechanism is from the release date of the Proposal (June 25, 2023) to July 15, 2023. During the period, the Beijing IP Court will conduct publicity and lectures in various forms, and deal with feedback issues and suggestions from all parties. After the transitional guidance period, the parties shall submit litigation materials in accordance with the requirements of the Guidelines for Submitting Electronic Litigation Materials.

Attached to the Proposal is the “Guidelines for the Submission of Electronic Litigation Materials in Administrative Cases of Trademark Refusal Review of Beijing Intellectual Property Court (Trial)“, which defines the electronic litigation materials and stipulates the submission methods (online + compact discs), format templates, file size and format requirements, naming rules, submission rules, etc. It is worth noting that the Guidelines specifically recommend that “the plaintiff should submit all evidence at once upon filing the case.” In addition, the case check list, which was generally submitted at the pre-litigation mediation stage before, is also one of the case docketing materials and needs to be submitted at the time of official docketing.

2. Overturning the decisions of the TMO, TRAD, and the Beijing IP Court, the Beijing High Court found no detrimental influence in the mark “Jing Heng De Li in Chinese”

Beijing Watches & Glasses Co., Ltd. (“Beijing Watch Company”) applied for the registration of the mark “(JING HENG DE LI, the starting character “京” is short for Beijing)” (“Disputed Mark”) in Class 9 on September 21, 2010. After refusal review, the trademark was preliminarily approved to be used on “timer; electrical plug; eyeglasses; eyeglass cases; eyeglass lenses; eyeglass frames; eyeglass chains” on January 20, 2017.

Shanghai Sanlian (Group) Co., Ltd. filed an opposition to the said trademark within the opposition period, citing its prior registration of the mark “(SHEN HENG DE LI, the starting character “申” could be another name for Shanghai)” in Class 37 and other trademarks, and asserted on absolute grounds that the Disputed Mark was deceptive and its registration was prone to adverse effects.

After examination, the TMO decided the Disputed Mark shall not be registered, affirming that “Heng De Li in Chinese” is a time-honored brand with a history of one hundred years in China’s watch and glasses sales and repair industries. Its goodwill was accumulated by many Heng De Li shops in the country and shall be enjoyed by all the Heng De Li shops in China. It shall not be exclusively owned by any one of them. If the registered use of the Disputed Mark was approved and monopolized on its designated products, it would easily confuse consumers, cause damage to the interests of Heng De Li enterprises, and have adverse social impacts.

Beijing Watch Company filed an appeal against this registration refusal decision, but the TRAD also found that the application for registration of the Disputed Mark constituted the situation of “other adverse effects” referred to in Article 10(1)(viii) of the Trademark Law 2019.

Beijing Watch Company filed a lawsuit with the Beijing IP Court, but was not supported. So it continued to file a second instance appeal, arguing that:

1. The Disputed Mark is not a sign that is harmful to socialist morality or has other adverse effects, and its application for registration does not violate the provisions of Article 10(1)(viii) of the Trademark Law 2019.
2. According to the principle set by prior rulings and judgments, the Disputed Mark was applied and used by Beijing Watch Company, which has a certain historical relationship with “Heng De Li.” And the character “JING”, which is the genuine domicile of the company, was added before “Heng De Li”, so that the logo can distinguish the Beijing Watch Company from other Heng De Li enterprises in the country, and will not have adverse social impact. The first instance court did not consider the background of the application for registration of the Disputed Mark, which is an obvious factual error.
3. The TRAD’s examination decision that the application for registration of the Disputed Mark violated the provisions of Article 10(1)(viii) of the 2019 Trademark Law is against the principle of consistency of examination standard and the principle of fairness for same rulings in same cases, and has damaged the reasonable expectation of Beijing Watch Company as the administrative counterpart.

After the trial, the Beijing High Court decided the final judgment as follows:

In this case, the Disputed Mark is composed of the Chinese character “Jing Heng De Li,” which was a fabricated word, and the evidence in the case was not sufficient to prove that the use of the Disputed Mark or its constituent elements on products such as ” eyeglasses” was harmful or has negative impact on China’s socialist morality, social public interests, and public order. Although the previous judgments have determined that “Heng De Li” was a time-honored brand with a long history in China’s eyewear and watch industries, it cannot be determined that the “Heng De Li” logo falls into the scope of China’s social public interest or public order. Therefore, the application for registration of the Disputed Mark did not violate Article 10(1)(viii) of the 2019 Trademark Law. The original judgment and the sued decision made an error in this determination and should be corrected.

3. Though failed to oppose “CANTERBURY” from registration, Canterbury managed to invalidate the squatter mark based on bad faith at court stage

In July 2004, Beijing Sanwei Hezhong Business Management Co., Ltd. (“Sanwei Hezhong”) applied for the registration of the “” mark (“Disputed Mark”) for “toys; sports balls; sports equipment” and other goods in Class 28.

Canterbury Co., Ltd. (“Canterbury”) filed an opposition and later an opposition appeal against the Disputed Mark. The TRAD in the opposition appeal determined that the Disputed Mark violated Article 10(1)(viii) of the Trademark Law and should not be registered. Sanwei Hezhong was dissatisfied and appealed to the court. After the first instance at the Beijing First Intermediate Court and the second instance at the Beijing Higher Court, both courts found that the Disputed Mark violated Article 10(1)(viii) of the Trademark Law. Sanwei Hezhong appealed to the Supreme People’s Court for retrial. On December 19, 2017, the Supreme People’s Court ruled that the registration of the Disputed Mark did not violate Article 10(1)(viii) of the Trademark Law. The Disputed Mark was subsequently published for registration in April 2018.

In October 2018, Canterbury filed an invalidation against the Disputed Mark for violating Article 30 (similar trademarks on similar goods) and Article 32 (previous enterprise name and pre-registration of its prior use mark by improper means), and the first paragraph of Article 44 (obtaining registration by other improper means) of the 2014 Trademark Law. The TRAD did not support its requests.

Canterbury then appealed to the Beijing IP Court. After the hearing, the court held that:

Evidence from Canterbury showed that its brand of “CANTERBURY” and bird head graphics has relatively high fame, and the trademarks had been registered and used in mainland China before the application date of the Disputed Mark. Sanwei Hezhong applied for the registrations of multiple trademarks that were identical or similar to Canterbury’s trademarks in multiple classes of goods or services, and its brand promotion and domain name registrations also showed that it subjectively free-rided on Canterbury’s brand popularity and misled consumers. Therefore, the application for registration of the Disputed Mark constituted the situation of “obtaining registration by other improper means” in the first paragraph of Article 44 of the 2014 Trademark Law.

Then Sanwei Hezhong filed an appeal before the Beijing High Court and the second instance court, after holding an inquiry among the three parties, ruled as follows.

According to the evidence in the case, before the application date of the Disputed Mark, “CANTERBURY” and the bird’s head logo brand under the name of Canterbury already had a relatively high reputation. During the period from July 2004 to February 2005, Sanwei Hezhong applied for the registration of “CANTERBURY,” “Ken Bai Li in Chinese,” bird’s head logo and other nine trademarks. Among them, the bird head logo was determined to have damaged the prior copyright of Canterbury; the “CANTERBURY” was completely included in Canterbury’s marks; and the “Ken Bai Li in Chinese” marks have similar pronunciation with Canterbury’s marks. Sanwei Hezhong failed to provide a reasonable explanation for the said trademark applications, and there were also domain name registrations and other activities.

Although Sanwei Hezhong submitted evidence of the use of the Disputed Mark at the second instance, however, the number of sales contracts, consignment notes, and invoices submitted were very little, and the corresponding dates were all in 2020, which was more than ten years since the application date of the Disputed Mark. The said evidence of use is not enough to prove that Sanwei Hezhong has continued using the Disputed Mark, and as an operator in the same industry of sporting goods, it cannot prove that its application for the Disputed Mark has subjective good faith through the small amount of use evidence. Therefore, it can be determined that the application for the Disputed Mark has the subjective intention of free-riding the market reputation of others, which disrupts the normal order of trademark registration management and damages the public interest. The registration of the Disputed Mark constituted the situation of “obtaining registration by other improper means” as stipulated in the first paragraph of Article 44 of the 2014 Trademark Law. Sanwei Hezhong’s appeal lacked factual and legal basis and should not be supported.

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Weekly China Trademark News Updates

June 20, 2023

1. Lululemon won RMB 1 million in damages

The Meizhou Intermediate Court of Guangdong concluded a first-instance judgment on the trademark infringement dispute between Canada Lululemon Sports Goods Co., Ltd. (“Lululemon”) and an individual Zhang. The court ordered Zhang to immediately stop trademark infringement and compensate Lululemon for economic losses of RMB 1 million (approx. USD139,446).

The court found that Lululemon owns registered trademarks such as “,” “LULULEMON”, “Lu Lu Le Mon in Chinese,” and “ALIGN.” The said trademarks are registered and valid and shall be protected by the law.

In this case, the alleged infringing goods were identical or similar to those for which Lululemon has the exclusive right to use registered trademarks. The promotional information of the accused online shop and the logos of “Lu Lu Le Mon in Chinese,” “LULULEMON,” “,” and “ALIGN” used on the relevant goods all serve to identify the source of the goods, which constituted trademark use. The said marks used by Zhang were indistinguishable from the registered trademarks claimed by Lululemon, which constituted identical marks. Zhang’s behaviors were enough to cause confusion and mislead the relevant public, which infringed Lululemon’s trademark rights.

In this case, Lululemon claimed that the profit from infringement was much higher than the amount of RMB 1 million claimed by Lululemon, regardless of calculating based on the Zhang’s profit margin, the industry’s profit margin, the profit margin of listed companies in the same industry, or the cost price of the counterfeit goods. The court supported Lululemon’s claim for the compensation amount. The court comprehensively considered Zhang’s degree of subjective fault, infringement profits, nature of infringement, operation method, operation scale, duration, sales amount and other factors, combined with the fame of Lululemon’s registered trademarks, and the reasonable and necessary cost paid by Lululemon to stop the infringement in finding that Zhang should pay Lululemon for economic loss of RMB 1 million (apprx. USD139,446) (including reasonable expenses for stopping the infringement).

2. The Beijing High Court recognized the “Laoshan in Chinese” mark as a well-known mark and granted cross-class protection

The Beijing High Court made a second-instance judgment on the administrative trademark invalidation dispute between Qingdao Heshanquan Natural Food Co., Ltd. (“Qingdao Heshanquan”), the CNIPA, and Qingdao Laoshan Mineral Water Co., Ltd. (“Qingdao Laoshan”). The court found that “Laoshan in Chinese” constituted a well-known mark, and the “Laoshan Peninsula in Chinese” mark shall be invalidated.

Disputed Mark

Cited Mark

The Disputed Mark is the “Laoshan Peninsula in Chinese ” mark with reg. no. 36199582 that was approved to be used on services such as “providing online marketplaces for buyers and sellers of goods and services; displaying goods on communication media for retail purposes; franchising business management; etc.” in Class 35, the current trademark owner is Qingdao Heshanquan.

The Cited Mark is the “Laoshan in Chinese” mark with reg. no. 381702, which was applied earlier than the application date of the Disputed Mark, which is approved to be used in Class 32 for “soft drinks; mineral water; etc.” The current trademark owner is Qingdao Laoshan.

The court found that the Cited Mark has been continuously promoted and used by Qingdao Laoshan for a long time, and had become well-known in mineral water products before the application date of the Disputed Mark. The Disputed Mark contained the Cited Mark, the two marks were similar in terms of word composition, pronunciation, and meaning, and the Disputed Mark constituted a copy, imitation and translation of the Cited Mark. The services such as “buyers and sellers of goods and services provide an online market” under the Disputed Mark and the mineral water under the Cited Mark do not belong to identical or similar goods or services. However, considering that Qingdao Heshanquan and Qingdao Laoshan are located in the same area and both are food business enterprises, the registration of the Disputed Mark is likely to mislead the public, making the public think that the approved services of the Disputed Mark is provided by Qingdao Laoshan or is associated with Qingdao Laoshan, which could damage Qiangdao Laoshan’s interests. The court held that the registration of the Disputed Mark violated Article 13(3) of the 2014 Trademark Law.

3. The applicant of a trademark was canceled, and its trademark application shall not be approved for registration

The CNIPA concluded the opposition action filed by Shanghai Rongying Brand Management Co., Ltd. (“Shanghai Rongying”) against the “Hualai Shifu in Chinese” mark with app. no. 54491795 in Classes 35 and 43 applied by Tangshan Miyuan Enterprise Management Consulting Co., Ltd. (“Tangshan Miyuan”).

The CNIPA found that the opposed mark “Hualai Shifu in Chinese” was designated for use in services such as market research and business analysis in Class 35, and restaurant services in Class 43. Shanghai Rongying cited “Hualaishi in Chinese,” “Hualaishi in Chinese CNHLS & Design” and other marks that were approved in Class 35 for displayed goods on communication media, and restaurants in Class 43. The composition, pronunciation, and overall appearance between the opposed mark and the cited marks were similar and constituted as similar marks. Parts of the opposed mark’s designated services were identical with the cited marks’ approved services. The marks constituted similar marks on similar services and is likely to cause confusion to the consumers.

According to the evidence provided by Shanghai Rongying, Tangshan Miyuan was canceled on May 11, 2021, and its qualification as an entity no longer exists. There was no evidence showing that the applicant had filed an assignment for the opposed mark prior to the cancelation date of the applicant. The CNIPA would accept the applicant’s failure to file an assignment for the opposed mark if the opposed party cannot provide contrary evidence. As a civil right, trademark right should be enjoyed and exercised by a subject with civil entity qualifications. Therefore, the opposed mark should not be approved for registration if the applicant lost its entity qualification. According to Article 4, Article 30, and Article 35 of the Trademark Law, the “Hualai Shifu in Chinese” mark shall not be registered.

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Weekly China Trademark News Updates

June 14, 2023

The Standards for Suspension of Trademark Review and Adjudication 

The CNIPA recently released the Standards for Suspension of Trademark Review and Adjudication (the “Standards”) that lists the circumstances to grant a suspension for a pending trademark review case.

The Standards states that the precondition of a suspension is the petitioner’s filing of a suspension request, except where the examiner suspends the review at his discretion based on that a cited mark is suspected of being registered in bad faith. The necessary condition to resume the review is subject to the petitioner’s submission of corresponding evidence proving that the cited mark’s status has been confirmed.

There are seven express circumstances to suspend a case and three case-by-case scenarios where suspension can be considered.

The seven circumstances are:

(1) The disputed mark or the cited mark is in the proceeding of name change of registrant or an assignment, and there will be no conflict of rights between the disputed mark and the cited mark after the name change or assignment;

(2) The cited mark has expired and is in the process of renewal or in the grace period for renewal;

(3) The cited mark is in the revocation or withdrawal proceeding;

(4) Where the cited mark has been revoked, invalidated or not renewed upon expiry, the review is within one year from the date the cited mark is published as valid or expired. If, however, the rejection is not based on the one-year isolation period under Article 50 of the Trademark Law, the case does not need to be suspended.

(5) The case involving the cited mark has been concluded and is waiting for the conclusion to become effective, or the enforcement of the effective judgment is pending for re-adjudication.

(6) The prior rights involved must be based on the results of another case that is pending in a court or the CNIPA;

(7) The status of the cited mark involved must be based on the result of another case that is pending in a court or the CNIPA, and the petitioner must explicitly file a suspension request;

Among the seven express circumstances, Circumstances (1) to (5) can be generally applied in rejection appeals, registration disapproval appeals, and invalidations. Circumstance (6) is specifically applicable to registration disapproval appeals and invalidations, while Circumstance (7) is specifically applicable to rejection appeal.

The three case-by-case scenarios that cases can be suspended are:

(8) A case can be suspended where the cited mark involved in a rejection appeal is pending in an invalidation proceeding, and the cited mark’s registrant has been identified in other cases as constituting bad faith registration under Article 4, Article 19(4), and Article 44(1) the Trademark Law. This scenario does not require the petitioner to file a suspension request. Examiners have discretion to decide whether to suspend based on the facts of the case, which will effectively reduce the right holders’ troubles of filing repeated applications and exhausting legal proceedings caused by bad faith registrations;

(9) A case can be suspended in a case-by-case scenario if it is necessary to wait for a case that shares identical facts, or a relevant case to be ruled or adjudicated. This scenario does not necessarily involve a cited mark, so a petitioner is not required to file a suspension request. However, to better coordinate administrative rights confirmation proceeding, other administrative proceedings, judicial proceedings, unify review and trial standards, avoid proceeding loopholes caused by conflicting decisions, and effectively reduce the parties’ burden, examiners have discretion to decide whether to suspend a case according to the specific circumstances of the case; and

(10) Other situations in which a case can be suspended. For cases that fall short of fully exhaust all proceedings, the principle of necessity and the benefit to the right holder shall be taken into consideration. With reference to the said scenarios, examiners have discretion to decide whether to suspend a case according to the specific circumstances of the case.

To ensure right holders’ interests, while considering efficiency, fairness, and stability of trademark registration order, a suspension request should be filed within the specified time limit. A petitioner for a rejection appeal should supplement at least within three months of the filing date of rejection appeal with a written statement stating the actions taken to remove the obstacles blocking the cited mark. The petitioner may also put forward an explicit suspension request as stated in Circumstances (7) together with the reasons for rejection appeal. The suspension request shall state the cited mark’s registration number, the proceeding it is in, and the relationship with this case, and other conditions. In principle, whoever applies for the suspension shall apply for lifting the suspension. After the cited mark’s status is confirmed, the petitioner shall submit the corresponding evidence, and the examiner shall resume the review if the examiner receives the petitioner’s supplemental evidence and confirms that the circumstances for the suspension has been eliminated.

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Weekly China Trademark News Updates

June 7, 2023

1. Victorinox’s “Cross and Shield” marks were intentionally infringed with bad faith. The infringers were ordered to pay RMB 3 million in compensation

The Beijing Xicheng District Court recently concluded a trademark infringement lawsuit between Victorinox AG (“Victorinox”), Beijing Weishi Elite Trading Co., Ltd. (“Elite”), and Shanghai Baoshun Trading Co., Ltd. (“Baoshun”). The court ordered Elite and Baosun to immediately cease trademark infringements and compensate Victorinox economic damages of RMB2.9 million (USD407,355) and reasonable expenses of RMB100,000 (USD14,046). Baoshun appealed the first instance decision but the Beijing IP Court rejected the appeal request.

The alleged infringements in this case were: 1. The alleged infringing store sells bags and uses “victoriacross flagship” in the store name and uses “” pattern on its webpage; 2. “Weishi Cross in Chinese” was used in the name of each product; 3. The home page of each product introduction picture uses a combination of “VICTORIACROSS” and ““; 4. “” was used alone in many places on the products bought during notarized purchase, and “VICTORIACROSS” and “” were used in combination on packaging and tags. The allegedly infringing products were backpacks, handbags, suitcases, etc., which fell into the goods approved for use under Victorinox’s “VICTORINOX” mark with reg. no. G763828, the “” mark with reg. no. 3491225, and the “Victorinox” mark with reg. no. 8563347. Therefore, the alleged infringement fell within the scope of protection of Victorinox’s trademarks, which constituted trademark infringement.

The court found that the production and use of Elite and Baoshun lacked a legal basis. Moreover, the following factors were considered: First, Elite’s “Weishi Cross in Chinese” mark with reg. no. 6954073 was determined by the China Supreme  Court to fall under Article 13, Paragraph 2 of the 2001 Trademark Law, which “reproduces, imitates or translates others well-known mark that are not registered in China are likely to cause confusion,” and invalidated. Therefore, Elite’s copying, imitating, and translating others’ prior well-known marks were done with bad faith intentions. Second, the alleged infringing stores and products used the “” logo that was similar to Victorinox’s registered marks. Compared with “,” the latter has a higher significance. The composition elements, method, and overall appearances were all very similar. Elite and Baoshun did not provide evidence to prove that their use had a legal basis for rights. Third, in the (2018) SPC Administrative Judgment No. 64 issued by the China Supreme Court on May 31, 2018, it was determined that prior to the registration date of the “VICTORIACROSS” mark with reg. no. 349122, Victorinox’s prior marks with reg. nos. G763828 and 3491225 were widely used in class 18’s goods for handbags, travel bags, and other goods, which could establish a certain fame in China. Therefore, as a product operator in the same industry, it was impossible for Elite to be unaware of Victorinox’s brand reputation, but it still used the “VICTORIACROSS” and “Weishi Cross in Chinese” in combination with the “” logo, which was very similar to the use of Victorinox. Its intention to actively seek to confuse the results was obvious. In summary, it can be determined that the subjective bad faith of Elite and Baoshun was obvious, and that their acts have infringed Victorinox’s trademark right, and they should bear the legal responsibility to stop the infringements.

2. RMB 800,000 in damages for unauthorized use of “Mercedes in Chinese” on auto parts

The Shanghai IP Court recently concluded a trademark infringement lawsuit between the appellant Shanghai Tonghe Auto Parts Co., Ltd. (“Tonghe”), the appellee Daimler AG (“Daimler”), and the defendant in the first instance Shanghai Tongzhi Auto Parts Co. Ltd. (“Tongzhi”). The court rejected the request to appeal and affirmed the lower court’s decision. Tonghe was ordered to immediately stop infringements against Daimler and was ordered RMB800,000 (USD112,380) in compensation to cover Daimler’s economic loss.

According to the notarized evidence submitted by Daimler and the administrative penalty decision, on-site transcripts, interrogation transcripts, photos and other evidence made by Shanghai Minhang District Market Supervision Administration, it can be determined that Tonghe sold brake pads, in the relevant stores it operated, along with filters, pulleys and other auto parts. These parts were marked with three-pointed star design, “Mercedes-Benz,” “MERCEDES-BENZ.” and other logos. The first instance court found that the said goods were identical to those approved for use by Daimler’s marks with reg. nos. 526122 and G1089299. The three-pointed star logo and the “MERCEDES-BENZ” mark used above were basically identical visually as the three-pointed star logo and the “MERCEDES-BENZ” mark owned by Daimler, which constituted identical marks. Compared with Daimler’s marks, the only difference between the “MERCEDES-BENZ” mark and the “Mercedes-Benz” mark was letter case, and there was basically no visual difference between the two in overall appearances. Therefore, Tonghe’s acts violated Daimler’s trademark rights. The first instance court took into account the relatively high popularity of Daimler’s marks on related goods, the fact that product quality may affect personal safety, and the variety of infringing products, and comprehensively considered Tonghe’s degree of subjective bad faith, the nature, time, and decided that the amount of compensation shall be determined based on factors such as the consequences, the quantity, and unit price of the infringing products, and the size of the company.

The main focus of dispute in the second instance of this case was whether the amount of compensation in the first instance was reasonable. Regarding Tonghe’s claim that the amount of compensation in this case should be based on the quantity of infringing products investigated and dealt with by the Market Supervision Administration and its fine. The second instance court found that Daimler, as the owner of the registered marks, has the right to both apply for administrative investigation and file a civil lawsuit for trademark infringement. Although Tonghe was punished administratively because Daimler purchased the infringing product based on the three notarizations involved in the case, the amount of compensation in civil infringement lawsuits is not necessarily based on the facts and the fines found in the administrative punishment. The first instance court’s comprehensive considerations of Tonghe’s infringement facts were appropriate.

With regard to Tonghe’s claim that Daimler failed to present evidence of notarized purchases in the first instance, resulting in the inability to identify product quality, Daimler should bear the adverse consequences. The second instance court found that although Daimler did not submit notarized evidence in the first instance, based on the photos attached to the notarial certificate and the content recorded on the CD-ROM and the relevant facts recorded in the administrative punishment decision, Tonghe did not submit valid evidence to prove its products’ legal origin. Based on this, the first instance court was not in err in determining that Tonghe infringed Daimler’s trademark. Moreover, product quality of the infringing products would not have affected the determination of trademark infringement.

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Weekly China Trademark News Updates

May 30, 2023

1. Sandisk’s red-grey color combination mark was infringed and the infringer was held to be unfairly compete with Sandisk

The Shenzhen Intermediate Court recently concluded a trademark infringement and unfair competition lawsuit between SanDisk Co., Ltd. (“SanDisk”), Nanning Big Whale Trading Co., Ltd. (“Nanning Big Whale”), and Shenzhen Big Whale Trading Co., Ltd. (“Shenzhen Big Whale”).  The court held that the defendants infringed Sandisk’s mark and constituted unfair competition. The court ordered economic compensation and reasonable costs of RMB150,000 (USD 21,206).

(Cited Mark)

The court found that Nanning Big Whale and Shenzhen Big Whale jointly produced and sold the CK MicroSD memory card that SanDisk accused of infringement. According to the evidence of fame such as sales, publicity, and honors provided by SanDisk, it can be determined that  as early as 2018, the SanDisk MicroSD memory card enjoyed a certain market fame and reputation across China, and can be seen as goods with a certain influence. SanDisk has been selling and promoting SanDisk MicroSD memory cards since 2011, and has not changed its red-gray color combination decoration design for many years. SanDisk uses red-gray colors and their permutations on SanDisk MicroSD memory cards “.” It has a certain degree of significance. After years of use and promotion of SanDisk’s overall decoration design, the relevant public has associated said decoration with SanDisk’s MicroSD memory card, and has the function of distinguishing the source of goods, which is a unique decoration of SanDisk. After comparison, Nanning Big Whale and Shenzhen Big Whale used identical decoration as SanDisk’s “” on the CK MicroSD memory cards they produced and sold. Considering the SanDisk MicroSD memory card and its good reputation and uniqueness of the decoration, when the relevant public pays general attention, it is easy to confuse and misidentify the source of the CK MicroSD memory card. In particular, Shenzhen Big Whale also used SanDisk when selling CK MicroSD memory cards. In addition, the defendants falsely used product information, copyright, and trademark rights statement of SanDisk’s parent company, Western Digital Corporation. Therefore, it can be determined that Nanning Big Whale and Shenzhen Big Whale,  without the permission of SanDisk, used the logo “” identical to the decoration of SanDisk’s MicroSD memory card that have a certain influence on SanDisk, constituting unfair competition.

At the same time, Nanning Big Whale and Shenzhen Big Whale used the exact same logo on the CK MicroSD memory card product that was identical as the blank memory card approved for use for SanDisk registered trademark “” with reg. no. 31557071, and sold the said product, infringed SanDisk’s trademark right.

2. “Nike” and “De Wu in Chinese” marks were infringed

The Dongcheng District Market Supervision and Administration Bureau of Beijing imposed an administrative penalty on an individual in accordance with the second paragraph of Article 60 of the China Trademark Law, confiscated the goods and imposed RMB30,000 (USD 4,242) in fine.

Nike owns the “NIKE” mark with reg. no. 4516216 for “clothing, shoes, and soccer shoes” in class 26. Shanghai Shizhuang Information Technology Co., Ltd. owns the “De Wu in Chinese” mark with reg. no. 31033869 in class 35 for “marketing, providing an online market for buyers and sellers of goods and services” in class 35.

On November 12, 2021, the Market Supervision and Administration Bureau of Dongcheng District, Beijing received a report that there was a stall in a market selling sneakers suspected of infringing on the “NIKE” mark. After investigation, in October 2021, the party concerned paid RMB1,600 (USD226) to buy 100 pairs of sneakers with the “NIKE” trademark from a salesperson and sold 5 pairs when he was investigated on November 12, 2021. Nike confirmed these sneakers were infringing products. Inside the shoebox, there were words “identified as genuine by an appraiser” and a QR code with “De Wu in Chinese.” After confirmation with the owner of the “De Wu in Chinese” app Shanghai Shizhuang Information Technology Co., Ltd., the above appraisal conclusion was not Issued by the company or authorized to be issued by others.

This case is a typical case of administrative law enforcement in which the use of infringing trademarks on goods to deceive consumers’ trust and confuse the source of goods.

3. Unauthorized use of “Forbidden City in Chinese” caused infringer RMB 330,000 in compensation

The Beijing Intellectual Property Court recently concluded an unfair competition dispute between the Palace Museum, Sichuan Palace Wine Co., Ltd. (Sichuan Palace Wine), Palace Museum Wine (Beijing) Co., Ltd. and sentenced the defendant to compensate RMB330,000 (USD4,657) for economic losses.

The court held that the Forbidden City used to be the imperial palace of the Ming and Qing dynasties, and later became the Palace Museum in Beijing. It is a national key cultural relic protection unit and a world cultural heritage. It has long been known to the public and enjoys a high reputation. When mentioning “Forbidden City in Chinese,” people will first think of the Palace Museum, not other meanings. Beijing Forbidden City Company promoted wine products on its website and marks “Supervised by the Palace Museum” next to the displayed product pictures and displays a sign with “Supervised by the Palace Museum”; Beijing Forbidden City Company registered the “Forbidden City Liquor Brand Center” WeChat public account on February 21, 2017 to display the wine bottle and packaging pictures of the “Forbidden City Liquid” liquor, and the base showing the liquor bottle was marked with the words “produced by the Palace Museum in Beijing,” etc. As of the hearing date of this case on June 9, 2022, the said Public Account still labeled the time as September 22, 201 and the content was marked with the words “supervised by the Palace Museum” on the base of the “Forbidden City Liquid” liquor displayed. The words “Supervised by the Palace Museum” contained the name of the original enterprise name, and “Forbidden City in Chinese” is a well-known and recognizable name in the enterprise name of the Palace Museum. Therefore, the above acts were enough to make the relevant public misunderstand the source of the goods. Even if the Beijing Forbidden City Company standardized and used its corporate name on its webpage, it was enough to cause the relevant public to mistakenly believe that the company has a close relationship with the Forbidden City, thereby damaging the competitive interests of the Forbidden City. The Beijing Forbidden City Company has violated the Palace Museum’s rights and interests of the “Forbidden City in Chinese” name which constituted unfair competition. The words “Supervised by the Palace Museum” marked on the packaging box of the “Forbidden City Liquid” liquor bottle produced and sold by Sichuan Palace Museum Company contained the name of the Palace Museum. Therefore, the said behavior was enough to make the relevant public misunderstand the source of the goods, infringed on the rights and interests of the “Forbidden City in Chinese” name of the Palace Museum, and constituted unfair competition.

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Weekly China Trademark News Updates

May 24, 2023

1. “Adidas” was recognized as a well-known mark and successfully fended off “qdidas”

Disputed Mark Reg. No. 19502292	Cited Mark 1 Reg. No. 71092	Cited Mark 2 Reg. No. G1037620	Cited Mark 3 Reg. No. 3336263

The Beijing High Court recently concluded an administrative trademark invalidation dispute between the appellant Tianjin Jiuhong Bicycle Co., Ltd., (“Jiuhong”), the CNIPA, and Adidas Co., Ltd. (“Adidas”). The appeal was dismissed, and the first instance court judgment upheld.

The issue in this case is whether the Disputed Mark violated Article 13, Paragraph 3 of the 2014 Trademark Law. The court found that: based on the evidence in the case, it can be proved that the Cited Mark 1 has been widely known to the public on clothing and other goods before the Disputed Mark’s application date and constituted a well-known mark. According to the need-based determination principle of well-known marks, the courts will only determine whether a trademark is well-known when it is really necessary. This court has protected the rights and interests of Adidas by affirming that the Cited Mark 1 is a well-known mark, and will not comment on whether the Cited Marks 2 and 3 constituted well-known trademarks.

The Disputed Mark is composed of English letters “qdidas”, the Cited Mark 1 is a word trademark composed of uppercase English “ADIDAS”. The Disputed Mark and the Cited Mark 1 are relatively similar in terms of word composition, pronunciation, meaning, appearance, etc. It constituted a copy or imitation of the Cited Mark 1. Although “bicycle; trolley” and other goods approved for use under the Disputed Mark and “clothes” goods for which the Cited Mark  is well-known are not similar goods according to the CNIPA Goods and Services Classification, they overlap in terms of sales channels and consumer groups, which belong to goods with a high degree of correlation. Considering factors such as the distinctiveness and popularity of the Cited Mark 1 and the degree of imitation of the Disputed Mark, the use of the Disputed Mark on “bicycles; trolleys” and other goods was likely to cause the relevant public mistakenly believe that the Disputed Mark and the Cited Mark have a certain degree of connection, thereby weakening the distinctiveness of each Cited Mark, improperly using the market reputation of the Cited Marks, and causing the interests of Adidas to be affected and damaged. Therefore, the first instance judgment and the sued ruling determined that the registration of the Disputed Mark violated the provisions of Article 13, Paragraph 3 of the 2014 Trademark Law was not wrong, and this court affirmed. The relevant grounds of appeal of Jiuhong cannot be established and should not be supported.

2. Nike successfully invalidated the “Swoosh & M & Design” mark

Disputed Mark Reg. No. 30399446	Cited Mark 1 Reg. No. 991722	Cited Mark 2 Reg. No. 4581865

The Beijing High Court recently concluded an administrative trademark invalidation dispute between the appellant Shanghai Jingnai Apparel Co., Ltd. (“Jingnai”), the CNIPA, and Nike Innovation Co., Ltd. (“Nike”). The court dismissed the appeal and affirmed the first instance judgment.

The Beijing High Court found that “clothing, shoes, socks” and other goods approved for use under the Disputed Mark and “clothing, shoes, hats” and other goods approved for use under the Cited Marks 1 and 2 fall into the same subclass according to the CNIPA Goods and Services Classification, constituted as identical or similar goods. The Disputed Mark is composed of the English letter “m” and designs, and the Cited Marks 1 and 2 are design marks. Comparing the Disputed Mark with the Cited Marks, it can be seen that the lower part of the Disputed Mark is highly similar to the design of the Cited Marks. The said marks were similar in design methods and overall visual effects, which constituted similar trademarks. In addition, the evidence submitted by Nike can prove that the Cited Marks already had a high reputation before the application date of the Disputed Mark through its publicity and use. Jingnai did not submit any evidence to prove that the Disputed Mark had formed a one-to-one relationship with the Disputed Mark through use and promotion, and was able to distinguish itself with the Cited Marks. On this basis, if the Disputed Mark and the Cited Marks 1 and 2 coexisted in the market, it would easily cause the relevant public to be confused and misunderstand, or believe that there was a certain relationship between the source of the goods. Therefore, the Disputed Mark and the Cited Marks constituted similar marks on identical or similar goods, and the registration of the Disputed Mark violated Article 30 of the Trademark Law. The original judgment was correct and shall be upheld.

3. The trademark infringer of the “Atlantis in Chinese” mark was ordered to compensate for RMB 1 million

The Hainan High Court recently concluded a trademark infringement and unfair competition dispute between the appellant Hainan Fuda Building Materials Co., Ltd. (“Fuda”), Hainan Atlantis Hotel Management Co., Ltd. (“Hainan Atlantis”), the appellee Kona International Co., Ltd. (“Kona”) and Hainan Zhongrui Huachen Investment Holdings Co., Ltd. (“Zhongrui Huachen“), the defendant in the original trial. The court dismissed the appeal and upheld the first instance judgment.

The issues in this case are: 1. Whether Fuda, Hainan Atlantis, and Zhongrui Huachen, the defendant in the original trial, infringed on Kona’s trademark rights; 2. Whether Fuda, Hainan Atlantis, and Zhongrui Huachen, the defendant in the original trial, have committed unfair competition; 3. If their actions constitute trademark infringement and unfair competition, how should the three companies be held civilly liable.

Regarding issue 1, first of all, Kona registered the “ATLANTIS” mark with reg. no. 5171193, the ” Atlantis in Chinese” mark with reg. no. 6635808, the “ATLANTIS” mark with reg. no. 10940717 and the “Atlantis in Chinese’ mark with reg. no. 14010119 (collectively referred to as the “Cited Marks”), which are approved for use in services such as sales of commercial housing, real estate leasing, management, apartment management, etc. According to the facts ascertained by the first instance court, since 2008, Kona has been publicizing its “Atlantis in Chinese” and “ATLANTIS” marks on Xinhuanet and other media. It has further publicized and reported the Cited Marks when it began to construct and operate the Sanya Atlantis Hotel. The Sanya Atlantis Hotel named after the Cited Marks has won relevant honors successively, with high significance and fame. Second, Zhongrui Huachen and Fuda named their real estate project under development and construction “Atlantis Garden in Chinese” and used “Atlantis in Chinese” and “ATLANTIS” extensively when promoting and selling its project. Such use, in fact, played the role of identifying the project, and it was essentially a commercial mark. The name was exactly the same as the prominent part of the Cited Mark, and the pronunciation was the same, and it was located in Hainan, where the Sanya Atlantis Hotel is located. It will make the relevant public mistakenly believe that there was a certain connection between the real estate project and Kona and its brand services, which would easily mislead the public and confuse the relevant public. Therefore, Zhongrui Huachen and Fuda used Kona’s Cited Marks as the name of its real estate and used it in large quantities in the process of development, construction, publicity and sales, which infringed Kona’s trademark right. In addition, according to the ascertained facts, Kona applied for the registration of the “ATLANTIS” mark in 2006 and the “Atlantis in Chinese” mark in 2008, and made a lot of publicity for the said marks and gained wide popularity no later than 2008. The construction engineering design plan of the “Atlantis Garden in Chinese” project was only approved by the Haikou City Planning Bureau on July 17, 2012. Therefore, the prior use defense of the three companies could not be established.

Regarding issue 2, the Hainan Atlantis Company was a company established by Zhongrui Huachen on November 25, 2013 for the operation and management of real estate projects. Basically, the Hainan Atlantis Company used the same characters as Kona’s already well-known registered mark “Atlantis in Chinese” as its enterprise name and used “Atlantis in Chinese” in a large number of daily operations and promotional activities. The “Atlantis in Chinese” mark would easily made the relevant public mistakenly believe that the three companies and the real estate projects developed by them have a specific relationship with Kona. Therefore, it constituted unfair competition and should bear corresponding civil liabilities.

Regard issue 3, the assumption of infringement liability, Kona requested the three companies to stop infringing its Cited Marks, stop using the Cited Marks in all commercial publicity and activities including but not limited to the “Atlantis in Chinese” in real estate project site, brochures and WeChat public account, and requested the Hainan Atlantis Company to immediately stop unfair competition and change the company name. The changed company name must not contain the word “Atlantis in Chinese” based on factual and legal basis. The first instance court supported Kona’s requests according to the law. Regarding the liability for compensation, because Kona did not provide evidence to prove the economic losses it suffered due to the infringement, nor did it provide evidence to prove that Zhongrui Huachen, Fuda and Hainan Atlantis gained unjustified benefit, the first instance court comprehensively considered factors such as the popularity and influence of the Cited Marks, the nature and degree of infringement by the three companies, the time of infringement and the degree of subjective fault, and the reasonable expenses paid by Kona in this case, it was not inappropriate to determine that the three companies should compensate Kona for economic losses and reasonable expenses of RMB 1 million (USD141,747).

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Weekly China Trademark News Updates

May 18, 2023

China Trademark Filing Strategies – Rejection Appeals and Backup Filings

China’s trademark prosecution timelines and its ever-growing trademark database have brought genuine concerns to brand owners when considering filing new applications. While the China National Intellectual Property Administration has been continuously accelerating new trademark application examination process, expedited examination creates an obvious downside of increase in rejections that often requires applicants to remove citations (such as non-use cancellation or invalidation). How to keep trademark applications alive while dealing with citations will be the main focus in this short article.

Below are some of trademark timelines, which may vary on a case-by-case basis and only serves as a reference for brand owners’ filing strategies.

Notices of rejection or approval	3 to 5 months from application filing date
Rejection appeal decision	6 to 8 months from filing date
Non-use cancellation decision	7 to 10 months from filing date
Non-use cancellation appeal decision	7 to 12 months from filing date
Opposition decision	10 to 12 months from filing date
Invalidation decision	11 to 13 months from filing date

When a new filing is rejected based on one or more prior marks, there are generally two options to consider. Each of the two options has its own advantages, risks, and disadvantages.

Option 1 – Keep the original filing alive by exhausting all appeal proceedings until all citations are removed

• Actions
  1. File rejection appeal to keep the application alive. Meanwhile, file non-use cancellations, invalidations or other actions against the citations.
  2. If rejection appeal decision is unfavorable because some citations remain valid, appeal to the Beijing IP Court (first instance court appeal), the Beijing High Court (second instance court appeal), and even re-trial court appeal.
  3. Note, however, after a citation is expired or invalidated, the CNIPA may wait for another year to approve later-filed identical or similar application for the purpose of avoiding confusion among consumers according to the Chinese Trademark Law.
• Advantages
  • Earlier filing date works better in enforcements against later-filed bad faith filings or even in infringement cases.
  • Trademark portfolios are easier to manage.
• Risks and Disadvantages
  • Formality documents for court appeals require notarization and legalization, which may take longer than expected and lead to failure to docket the appeal.
  • Attorney fees and other related fees for court appeals are significantly higher than filing backup applications.

Option 2 – Keep filing backup applications until all citations are removed

• Actions
  1. File rejection appeal to keep the first application alive. Meanwhile, refile a second application that is identical to the first mark as a backup.
  2. If the backup second application is rejected based on the same citation(s) found in the first application, appeal the backup second application rejection, drop the first application when and if its rejection appeal decision is unfavorable, and file a backup third application. If the backup second application rejection appeal failed, repeat actions 1 and 2.
  3. If the backup second application is rejected based on additional or new citations,
     • and they cannot be canceled or invalidated, drop the second application and keep the first application alive by exhausting all appeal proceedings until all citations are void.
     • and they can be canceled or invalidated, appeal the backup second application rejection, and consider filing a third application as a backup, unless the first application survives until all citations are removed.
•  Advantages
  • There will always be a pending backup application.
  • Relatively low official fees and attorney fees, and no notarized/legalized formality documents are required.
• Risks and Disadvantages
  • Though refiling when a prior application is rejected is a good timing for backup purpose, there are risks that additional citations, including those filed in between the prior application and the backup application may be cited to block the backup application. As such, court appeal proceedings stated in Option 1 may be necessary.
  • Trademark portfolios would be more complicated to manage.

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Weekly China Trademark News Updates

May 10, 2023

1. The CNIPA issued the “Work Plan for Systemically Governing Bad Faith Trademark Registration and Promoting High-quality Development (2023-2025)”

On May 8, 2023, the CNIPA issued the ” Work Plan for Systemically Governing Bad Faith Trademark Registration and Promoting High-quality Development (2023-2025).” The work plan is aimed at consolidating the achievements in combating bad faith trademark registration in recent years and deepening the governance of bad faith trademark registration in all fields.

2. “IKEA” is recognized as a well-known mark

Inter IKEA Systems B.V. (“IKEA”) sued Qingdao Yi Jia Staircase Co., Ltd., Linyi Mingde Yi Jia Home Furnishing Co., Ltd., Shanghai Red Star Macalline Brand Management Co., Ltd. Rizhao Branch, and Wang Zhaobin for trademark infringement and unfair competition.

The court found that IKEA is the owner of the “IKEA in Chinese” mark with reg. no. 5782277 and the “IKEA” mark with reg. no. 175291. The said marks were all valid. The defendants used a large number of logos such as “IKEA in Chinese” and “Mingde IKEA in Chinese” in WeChat public account and sales channels and manufacturing sites of “IKEA Whole Wood Mansion,” etc., which constituted identical and similar with the “IKEA in Chinese” trademark with reg. no. 5782277. The defendants used “IKEA” in WeChat public account during the poster publicity week, which was identical with the “IKEA” mark with reg. no. 175291. It was very easy for the relevant public to mistakenly believe that the defendants or their products were related to the plaintiff. The defendants’ action constituted trademark infringement. Regarding the use of the “ENKEA” mark, IKEA’s “IKEA” mark with reg. no. 175291 was registered in China since  1982. After years of use by IKEA, that is, large-scaled publicity and promotion, it has been widely known to the relevant public and has been recognized by administrative agencies and judicial agencies as a well-known mark and has received protection for many times. It should be recognized as a well-known mark. This particular mark reached well-known status before Yi Jia Staircase Co., Ltd. registered its “ENKEA” mark with reg. no. 7682322 on September 8, 2009. Combining the series of acts of the defendant Yi Jia Staircase Co., Ltd., its registration and use, the registration was a bad faith registration and should not be restricted within five years from the date of trademark registration, and the plaintiff has the right to request prohibition of its use. The defendants Yi Jia Staircase Co., Ltd. and Mingde Yi Jia Company used “ENKEA” in large quantities in its WeChat public account, “IKEA Whole Wood Mansion,” and other sales places, production workshops, etc. Compared with the “IKEA” mark, the mark “ENKEA” is similar with the “IKEA” mark in the combination of letters and pronunciation, and these marks shall constituted similar marks under the Chinese Trademark Law, which was likely to cause the relevant public to believe that the defendants or their products were associated with IKEA. Thus, the defendants’ actions infringed upon the trademark right of the “IKEA” mark with reg. no. 175291 owned by IKEA, and such use should be prohibited. The defendant, Red Star Macalline Rizhao, is a professional company engaged in the business of furniture products and should have a relatively high review obligation. The contract between the defendants and the third party clearly stipulated that the operating brands were ” IKEA in Chinese Staircase” and “ENKEA IKEA Whole Wood Mansion” and when the “ENKEA” and “IKEA” logos were clearly used in the store, as a store operator, Red Star Macalline Rizhao did not perform reasonable management duties, which constituted trademark infringement. At the same time, the defendant Yi Jia Staircase Co., Ltd. registered the domain name “enkea.cn” where the identifying “enkea” in this domain name is similar to IKEA’s “IKEA” mark with reg. no. 175291, and the defendant used it as a domain name in publicity and in contact with customers. It was very likely to cause confusion, which constituted trademark infringement of the “IKEA” mark with reg. no. 175291.

With regard to unfair competition, the defendant used the plaintiff’s “IKEA in Chinese” mark with reg. no. 5782277 as its business name, and the business scopes of the two defendants were similar to that of the plaintiff, which could easily lead to confusion among the relevant public, who believed that the defendants and the plaintiff had a direct relationship. This behavior constituted unfair competition. In summary, the court held that the defendants should stop infringing on the plaintiff’s trademark rights, and ruled that the defendants Qingdao Yi Jia Staircase Co., Ltd. and Linyi Mingde Yi Jia Home Co., Ltd. should stop using the word “Yi Jia in Chinese” in their business names. And they should compensate IKEA for economic losses and reasonable expenses of RMB3 million (USD433,025), the defendant Wang Zhaobin was jointly and severally liable for compensation, and the defendant Shanghai Red Star Macalline Brand Management Co., Ltd. Rizhao Branch should compensated Ikea for economic losses and reasonable expenses of RMB50,000 (7,217).

3. Huawei was awarded double punitive damages of RMB 5 million in a trademark infringement lawsuit

Huawei Technologies Co., Ltd. (“Huawei”) sued Shenzhen Shangpai Technology Co., Ltd. (“Shangpai”) and Liu Yuliang for trademark infringement and unfair competition. Later, Huawei removed the unfair competition claim.

The court found that Shangpai set “Huawei” as a search keyword and prominently used “Huawei in Chinese” and “HUAWEI” logos in product display pictures, which could have the effect of identifying the source of goods for consumers, so the court determined that the use of the accused infringing logo belonged to trademark use under the Chinese Trademark Law. In this case, the accused infringing mobile phone stabilizer fall into the same class of goods as those goods approved under the “HUAWEI” mark with reg. no. 16844938 approved for photographic equipment racks and camera tripods. Though the accused infringing mobile phone stabilizer was not similar to the “HUAWEI” mark with reg. no. 14203957 approved for smartphones, cameras, earphones, and mobile phone protective cases based on the the CNIPA Goods and Services Classification, however, the CNIPA Goods and Services Classification was for reference only. In actual use, it belongs to the supporting facilities for the use of camera functions in smartphones. The functions and uses of the two were closely related, and there was a certain overlap in sales channels and consumers, which constituted similar goods. Regarding the similarity of trademarks, the “Huawei in Chinese” mark in this case was exactly identical to the “Huawei in Chinese” mark with reg. no. 16844938. The accused infringing mark “HUAWEI” with the “HUAWEI” mark with reg. no. 14203957, the 8 pastel flower logo and the HUAWEI text were identical. The former has an extra line of text at the bottom, and the details of the two were slightly different, but the overall structure was similar. Based on the general attention of the relevant public, it was easy for the relevant public to misidentify the source of Shangpai’s products or believed that its source had a specific connection with the goods registered by Huawei, which was likely to cause confusion, and constituted as similar marks. Therefore, Shangpai’s use of the “HUAWEI” logo in the process of selling mobile phone stabilizer products in the online store constituted an infringement of Huawei’s “HUAWEI” mark with reg. no. 16844938 and the “HUAWEI in Chinese” mark with reg. no. 14203957. Regarding the amount of compensation, Huawei requested the application of punitive damages, taking Shangpai’s benefits from the infringement as the compensation base, plus twice the punitive damages. The court comprehensively considered the subjective fault degree of Shangpai and the objective infringement circumstances. In order to effectively play the role of punitive damages in punishing and preventing infringement, the court determined to double the punitive damages, and supported the calculation method of punitive damages claimed by Huawei, and fully supported Huawei’s compensation claim of RMB5 million (USD722,157) against Shangpai.

Follow us on LinkedIn! Email: trademark@beijingeastip.com Tel: +86 10 8518 9318 | Fax: +86 10 8518 9338 Address: Suite 1601, Tower E2, Oriental Plaza, 1 East Chang An Ave., Dongcheng Dist., Beijing, 100738, P.R. China