You’re responsible for monitoring and enforcing your intellectual property (IP). You should monitor for IP infringement in both online and offline markets.
Options for enforcing the proper use of your trademark include administrative, civil and criminal remedies.
You can also opt to send a cease and desist letter to the infringer or warn them before initiating enforcement proceedings.
Sending cease and desist letters to the trade mark infringer
A cease and desist letter is an optional procedure.
In some cases it is a recommended first step before formal enforcement steps are taken, however you should seek legal advice before you send a letter.
It is usually only advisable to send a cease and desist letter after you have collected clear cut evidence. Depending on the industry involved, only a small number of Chinese infringers are likely to respond to the letter and even fewer of those who reply will cease or promise to cease the infringement.
In fact, it is possible that a cease and desist letter might tip off some opportunistic or fly-by-night infringers and in those cases, it might be preferable to go straight to administrative adjudication or court enforcement.
It is important to note that in some circumstances, if you do not withdraw your cease and desist letter or start a lawsuit, the opposite party may file a declaration of non-infringement action, requesting the court to determine that their actions do not constitute infringement. In Australia, this is known as an anti-suit injunction.
This is an important difference from Australian practice and procedure.
Filing administrative complaints with State Administration for Industry and Commerce
You can file your complaint to the local State Administration for Industry and Commerce (AIC), which might carry out an investigation shortly after your complaint is filed.
This might be appropriate when there is a clear cut case of infringement and you have a certificate of your trade mark registration to support your claim. In some cases, you may be requested to participate in the investigation.
Compared with Court proceedings, an administrative action is generally supposed to be faster and less costly.
There are no strict procedural requirements and the paper work required is generally less than required in a court case.
However, in practice, AIC needs to be persuaded by a strong evidence to act and you may need to collect evidence about the infringement activities first, including samples and the address of the infringers to make it easy for the AIC to act.
The AIC can order immediate cessation of any illegal activities and confiscate or destroy all infringing products, labels, brochures and equipment specifically used for manufacturing infringing products if it finds there has been an infringement.
It can also impose a monetary fine on the infringers, but it cannot order the infringer to pay compensation to you.
Filing civil law suits
As a registered trade mark owner, you are also entitled to file civil law suits against the manufacturers and distributors of alleged infringing products and request them to cease their activities as well as seek compensation for economic loss.
To support an infringement claim, you are required to prove that:
- the alleged infringing mark is identical or similar to your registered trade mark; and
- the infringing mark was used in connection with or affixed to similar goods or services.
Generally speaking, litigation is believed to be a more powerful way to strike out the infringing activities than administrative proceedings.
However, civil litigation is time consuming and more costly than administrative proceedings. It can take 12 months or longer for the initial case, and another three to six months for an appeal.
You can claim compensation for economic loss as a result of the infringing activities. The compensation will be determined in accordance with the actual losses suffered by you due to the infringement, the gains derived by the infringer from the infringement (if your actual losses are hard to prove) or the licensing fee of the trade mark when both the losses and the infringer's actual interests obtained are difficult to prove.
Where it is difficult to determine all of these factors, the People's Court shall rule on a compensation amount of not more than RMB3 million.
Filing a criminal complaint to the Public Security Bureau
If the infringement of your trade mark is serious enough to be criminal you may request the relevant Public Security Bureau (PSB) to initiate a criminal investigation.
The initiation of any criminal investigation depends on the primary investigation and the evidence you have collected, usually through private investigation companies.
You will be required to persuade the PSB that the infringing activities have reached the threshold for criminal investigation. The threshold is currently when the illegal business revenue is higher than RMB50,000 or the amount of illegal gains is more than RMB30,000.
If an infringement is determined to be a crime, the court will order either fines or jail sentences up to seven years in prison, depending on the impact on society caused by the infringement.