Interpretations of the Supreme People's Court of Several Issues Concerning the Application of the Law to the Trial of Civil Dispute Cases Involvin

Promulgated October 12, 2002 and effective October 16, 2002

In order to correctly try trademark dispute cases, and in accordance with the provisions of laws such as the General Provisions of the Civil Code of the People's Republic of China, the Contract Law of the People's Republic of China, the Trademark Law of the People's Republic of China, the Civil Procedure Law of the People's Republic of China, etc., the following interpretations are made regarding several issues relating to the application of the law:

Article 1The following acts constitute acts causing other harm to another's exclusive right to use a registered trademark as set out in Item (5) of Article 52 of the Trademark Law:

(1)using wording that is identical or similar to another's registered trademark as a business name and displaying it prominently on identical or similar goods, thereby easily causing mistaken recognition on the part of the relevant public;

(2)reproducing, imitating or translating another's registered well-known trademark or its main part and using it as a trademark on non-identical or dissimilar goods thereby misleading the public and potentially prejudicing the interests of the registrant of the well-known trademark;

(3)registering words that are identical or similar to another's registered trademark as a domain name and using it to carry out electronic commerce business in related goods, thereby easily causing mistaken recognition on the part of the relevant public.

Article 2In accordance with paragraph 1 of Article 13 of the Trademark Law, where another's non PRC-registered well-known trademark or its main part is reproduced, imitated or translated and used as a trademark on identical or similar goods, thereby easily resulting in confusion, civil liability to stop the infringement should be undertaken.

Article 3Trademark licenses as set out under Article 40 of the Trademark Law include the following three types:

(1) "exclusive licenses", which means that the trademark registrant licenses a single licensee to use its registered trademark for an agreed period, within a specified territory and in an agreed manner and where the trademark registrant, in accordance with the agreement, may not use the registered trademark;

(2) "sole licenses", which means that the trademark registrant licenses a single licensee to use its registered trademark for an agreed period, within a specified territory and in an agreed manner and where the trademark registrant, in accordance with the agreement, may use the registered trademark but may not license other parties to use the registered trademark;

(3) "non-exclusive licenses", which means that the trademark registrant licenses a third party to use its registered trademark for an agreed period, within a specified territory and in an agreed manner and where the trademark registrant can itself make use of the registered trademark and license others to use its registered trademark.

Article 4 "Materially interested parties" under Article 53 of the Trademark Law includes licensees under trademark license contracts for registered trademarks, lawful successors to trademark property rights, etc.

When exclusive rights to use a registered trademark are infringed, licensees under exclusive license contracts can bring a suit in the People's Courts. Licensees under sole license contracts can bring a joint suit together with the trademark registrant and can also bring a suit by themselves if the trademark registrant does not bring a suit. Licensees under non-exclusive license contracts can bring a suit provided that they have been given clear authorization to do so by the trademark registrant.

Article 5Where a trademark registrant or materially interested party brings a suit because a third party is infringing the exclusive rights to use the registered trademark after the trademark registrant or materially interested party has filed an extension application during the grace period for extending the term of a registered trademark but before such extension has been approved, the People's Court should accept the suit.

Article 6Civil suits that have been brought because of an act of infringement of the exclusive rights to use a registered trademark, shall fall under the jurisdiction of the People's Court of the place where an act of infringement under Articles 13 or 52 of the Trademark Law has been carried out, of the place where the infringing products are stored, sealed or detained, or of the place where the infringer is domiciled.

The "place where the infringing products are stored" referred to in the preceding paragraph, means the place where large quantities of the infringing products are stored or hidden, or the place where they are regularly stored or hidden. The place where they are "sealed or detained" means the place where an administrative body such as Customs, administration for industry and commerce, etc., has sealed up or detained the infringing products.

Article 7Where a single suit is brought over acts of infringement committed in different locations by multiple defendants, the plaintiff can select as the People's Court with jurisdiction the People's Court of the place where one of the defendants has carried out the infringing act. Where a suit is brought against one of the defendants only, the People's Court of the place where that defendant carried out the infringing act shall have jurisdiction.

Article 8The "relevant public" referred to in the Trademark Law means consumers related to the type of product or service branded with the trademark or business operators that have a close connection to the marketing of the aforementioned product or service.

Article 9The phrase "trademark that is identical" in item (1) of Article 52 of the Trademark Law means where the suspected infringing trademark is compared with the plaintiff's registered trademark and the two trademarks are essentially without difference visually.

The phrase "trademark that is similar" under item (1) of Article 52 of the Trademark Law means where the suspected infringing trademark is compared with the plaintiff's registered trademark and the font, pronunciation or meaning of the words or the composition or coloring of the device are similar, or the overall structure of its combined main elements is similar, or where its 3-dimensional shape and combination of colors are similar thereby easily leading the relevant public to mistake the source of the products or to believe that their source has a certain connection to products using the plaintiff's registered trademark.

Article 10Where a People's Court makes a determination of whether trademarks are identical or similar in accordance with item (1) of Article 52 of the Trademark Law, it shall apply the following principles:

(1)using the ordinary powers of observation of the relevant public as the standard;

(2)the trademarks should be compared in their entirety and their important elements should also be compared; the comparison should be carried out with the two objects of comparison being kept apart;

(3)when considering whether the trademarks are similar, the distinctiveness and notoriety of the registered trademark for which protection is being sought should be considered.

Article 11"Similar goods" under item 1 of Article 52 of the Trademark Law means goods that have identical functions, uses, production entities, sales channels, target consumers, etc., or goods that the relevant public would normally consider to have a certain connection and thus easily cause confusion.

"Similar services" means services whose purpose, content, methods of provision, target users, etc., are identical or services what the relevant public would normally consider to have a certain connection and thus easily cause confusion.

"Similar goods and services" means that a certain connection exists between the goods and services which could easily cause the relevant public to be confused.

Article 12Where a People's Court determines whether goods or services are similar in accordance with item (1) of Article 52 of the Trademark Law, it should make an overall determination based on the normal knowledge of the relevant public with regard to the goods or services. The International classification of Goods and Services for the Purposes of the Registration of Marks and the Classification of Similar Goods and Services may be used as a reference for determining the similarity of goods or services.

Article 13When a People's Court determines an infringer's liability for compensation in accordance with paragraph 1 of Article 56 of the Trademark Law, it can calculate the measure of damages in accordance with the method of calculation chosen by the rights holder.

Article 14The benefits gained from the infringement referred to in paragraph 1 of Article 56 of the Trademark Law can be calculated by multiplying the unit profit by the sales quantity of the infringing product. Where it is impossible to ascertain the unit profit, the unit profit of the products using the registered trademark shall be used for the calculation.

Article 15The losses suffered from the infringement referred to in paragraph 1 of Article 56 of the Trademark Law can be calculated according to the reduction in the sales amount of the product suffered by the rights holder because of the infringement or can be calculated by multiplying the sales amount of the infringing product by the unit profit of the products using the registered trademark.

Article 16Where it is difficult to calculate both the benefit gained by the infringer because of the infringement or the loss suffered by the rights holder because of the infringement, the People's Court can, in accordance with the parties' request or on an ex-officio basis, apply the provisions of paragraph 2 of Article 56 of the Trademark Law in order to determine the measure of damages.

When a People's Court is determining the measure of damages, it should make an overall determination having considered factors such as the nature, the period and the consequences of the infringement, the reputation of the trademark, the amount of trademark licensing royalties, the types, periods and scope of trademark licenses for the mark, the reasonable expenses incurred in stopping the infringement, etc.

Where the parties reach an agreement on the measure of damages in accordance with paragraph 1 of this Article, this should be permitted.

Article 17The "reasonable expenses incurred in stopping the infringement" referred to in paragraph 1 of Article 56 of the Trademark Law include reasonable expenses of the rights holder or an appointed agent in investigating and collecting evidence regarding the infringing act.

In accordance with a party's statement of claim or the specific facts of the case, a People's Court may include lawyer's fees that comply with the stipulations of the relevant State departments within the calculation of the scope of compensation.

Article 18The statute of limitations for bringing a suit for the infringement of a registered trademark is 2 years, starting from the date that the trademark registrant or a materially interested party knew or should have known about the act of infringement. Where a trademark registrant or a materially interested party brings a suit after more than 2 years, if the infringing act is still continuing at the time the suit is brought and the exclusive rights to use the registered trademark are still in the period of validity, then the People's Court should issue a judgment [ordering] the defendant to stop the infringing act. The measure of damages for the infringement should be calculated by reckoning back 2 years from the date when the rights holder brought the suit before the People's Court.

Article 19Where a trademark license contract has not been recorded, this will not affect its effectiveness, unless otherwise agreed by the parties.

A trademark license contract which has not been recorded with the Trademark Office may not be used to oppose third parties acting in good faith.

Article 20The assignment of registered trademarks shall not affect the effectiveness of trademark license contracts that had already entered into effect before the assignment, unless the trademark license contracts contain provisions to the contrary.

Article 21Where a People's Court is trying a dispute involving the infringement of exclusive rights to use a registered trademark, in accordance with the provisions of Article 134 of the General Provisions of the Civil Code and Article 53 of the Trademark Law and the specific circumstances of the case, the court can issue a judgment [ordering] the infringer to bear such civil liability as stopping the infringement, removing obstructions, eliminating dangers, compensating loss, eliminating the effect [of the infringement], etc. It can also issue a decision for civil sanctions, imposing fines and/or confiscating the infringing goods, the forged trademark representations and property such as materials, tools and equipment, etc., specially used to manufacture the infringing products. The amount of the fines can be determined by reference to the relevant provisions under the Implementing Regulations for the PRC Trademark Law.

Where an administrative department for industry and commerce has already imposed an administrative penalty in respect of the same act of infringing the exclusive rights to use a registered trademark, the People's Court shall not impose any additional civil sanction.

Article 22Where a People's Court is trying a trademark dispute case, it may, at the request of a party and in accordance with the actual circumstances of the case, make a determination in accordance with law as to whether the registered trademark in question is well-known.

Determination of a trademark as well-known should be carried out in accordance with the provisions of Article 14 of the Trademark Law.

Where a party requests protection in respect of a trademark that has been previously been determined as a well-known trademark by administrative bodies or a People's Court and the other party does not dispute the mark in question being well-known, the court will not carry out any further examination. If the other party does dispute the trademark being well-known, the People's Court shall carry out an examination in accordance with Article 14 of the Trademark Law.

Article 23The provisions under these Interpretations applying to product trademarks also apply to service trademarks.

Article 24Where previous relevant regulations are inconsistent with these Interpretations, these Interpretations shall apply.