(Passed on October 12, 2002)
In order to help in the adjudication of trademark disputes, the Supreme Court has issued the following judicial interpretation of the Trademark Law of the Peoples Republic of China ("the Trademark Law"):
Article 1 Defining certain acts as "acts causing other harm to another's exclusive right to use a registered trademark" under Item (5), Article 52 of the Trademark Law.
(1) the use of words identical or similar to another's registered trademark as a trade name in a distinctive manner on identical or similar goods, and thus causing possible confusion among the relative public.
(2) the copy, imitation, translation of another's well-known, registered trademark or its dominant part to be used as a trademark on non-similar or non-identical goods and thus mislead consumers and possibly causing damage to the interest of the well-known trademark owner.
(3) the registration of words identical with or similar to another's registered trademark as a domain name, and to conduct e-commerce in the goods through this domain name, which is likely to cause confusion among relative public.
Article 2 According to Article 13 (1) of the Trademark Law, any party who copies, imitates or translates another's well-known, but unregistered trademark or the dominant part of the trademark and subsequently uses it as a trademark on identical or similar goods and this is likely to cause confusion, shall bear liability of ceasing the infringing acts.
Article 3 The trademark licenses described in Article 40 of the Trademark Law include the following three types:
(1) sole license means the trademark registrant licenses the exclusive right of use in the registered mark to one licensee for an agreed period of time, area and in a specific manner of use. Therefore prohibiting the registrant's own use of the registered trademark so as to infringe on the licensee's rights.
(2) exclusive license means the trademark registrant licenses the exclusive right of use in the registered mark to one licensee for an agreed period of time, area and for use in a specific manner. The registrant can use the mark as agreed but should not license the mark to others so as to infringe on the licensee's rights.
(3) general license means the trademark registrant licenses the right to use the registered mark to others for an agreed period of time, area and manner of use. The registrant can also use its mark and license the use to others.
Article 4 The interested party described in Article 53 of the Trademark Law includes the licensees of the registered mark and its legal heirs and successors.
If the exclusive right to use a registered trademark is infringed, lawsuits can be initiated by an exclusive licensee alone, or by a sole licensee jointly with the registrant (or alone when the registrant does not do so), or by a general licensee with express authorization of the registrant.
Article 5 Courts shall accept infringement suits initiated while the renewal of the relevant trademark is being applied for.
Article 6 Civil litigation based on the infringement of the exclusive right of use of a registered mark is subject to the jurisdiction of the people's court located in the district where the infringing acts take place, or where the infringing goods are stored or detained, or where the defendant is located.
The place where the infringing goods are stored refers to the places for regularly storage in large quantity of the infringing goods or to the places where the infringing goods are hidden. The place where the infringing goods are seized and detained refers to the place where the goods are detained by customs, local administration of industry and commerce (local AICs) or other administrative authorities.
Article 7 In instances of litigation involving several defendants situated in different locations, the plaintiff can choose a court which has jurisdiction over any one of the defendants to hear the case. For litigation involving only a single defendant, the court located in the place where the infringing acts take place has jurisdiction over the matter.
Article 8 The "relative public" means consumers related to the goods or service for which the trademark is used and other traders who have a close relationship with the distribution and sales of the aforesaid goods or service.
Article 9 "Identical trademark" referred to in Article 52 (1) of the Trademark Law means when comparing the accused infringing mark and prior mark the two marks do not have much difference in visual appearance.
"Similar trademark" referred to in Article 52 (1) of the Trademark Law means, when comparing the accused infringing mark and prior mark, if the appearance, pronunciation, meaning of the word(s), or the design and color of the device, or the overall appearance of the combination of the above elements of the two marks is similar; or the 3-dimentional shape or the combination of colors are similar to such a degree that the relative public are likely to mistake the original source of the goods for which the marks are applied and think the source of the goods has certain association with the goods for which the trademark's owner mark is used.
Article 10 The people's court shall apply the following principles when judging whether the marks are identical or similar in accordance with Article 52 (1) of the Trademark Law.
¡¤ the ordinary perception of the relative public;
¡¤ comparing the marks in overall appearance as well as its elements; with the goods bearing the marks should be viewed separately;
¡¤ when judging whether the marks are similar, the distinctiveness and fame of the prior mark should be considered.
Article 11 "Similar trademark" referred to in Article 52 (1) of the Trademark Law means goods that are identical in function, usage, and that belong to the same industry, that are sold through the same sales channel(s) and are aimed at the same group of consumers; or the relative public tend to think the goods are associated with each other and thus are likely to cause confusion.
"Similar service" means services that are identical with each other in purpose, content, way of serving and target consumers; or the relative public tends to think the services are associated with each other and thus are likely to cause confusion.
"Goods and service are similar" means that the goods and services are associated with each other and thus are likely to cause confusion.
Article 12 When judging whether the goods or services are similar according to Article 52 (1) of the Trademark Law, the people's court shall make its judgment based on the average knowledge of the public pertaining to the goods or service. The International Classification System of Goods and Services can be used as a reference.
Article 13 When the people's court determines the liability or damages according to Article 56 (1) of the Trademark Law, the amount of compensation can be calculated according to the options available to the trademark right owner.
Article 14 The income obtained by the infringer from the infringement as provided by Article 56 (1) of the Trademark Law can be the determined by multiplying the quantity of the infringing products sold by the unit profit; if the unit profit is difficult to ascertain, the trademark owner's own unit profit in the goods in questions can be used.
Article 15 The loss suffered by the trademark owner, as provided by Article 56 (1) of the Trademark Law, can be the calculated as the decreased amount in sales during the infringement period multiplied by the unit profit of the trademark owner's branded products.
Article 16 If neither the income obtained by the infringer, nor the loss suffered by the trademark owner can be calculated, the people's court can determines the amount by applying Article 56 (2) of the Trademark Law at the request of the litigating party or on its own initiative.
When determining the amount of damages, the people's court should consider the nature, period of time and the result of the infringing acts, the fame of the plaintiff's trademark; the royalty, kind, period, area of license, and the reasonable expenses incurred in stopping the infringement as well as any other factors it considers relevant.
The court should allow the concerned parties to reach agreement according to paragraph Article 56(1).
Article 17 The reasonable expenses incurred in preventing the infringement provided in Article 56 (1) of the Trademark Law includes the trademark's owner reasonable expenses, or its retained agent, in investigating the infringement and obtaining evidence of the infringement.
Based on the claims made by the concerned parties and each specific case, the people's court can include into the amount of damages awarded to the trademark owner its attorney fees at the rate set by the competent authority.
Article 18 The time limitation period for instituting legal proceedings concerning the infringement of the exclusive right to use a trademark is two years. The limitation period begins from the date when the registrant or other concerned parties knows or should have known about the infringing acts. The registrant or other concerned parties can initiate proceedings after the 2-year period, but only if the infringing acts still continues at the time of initiating the litigation and the registration of the mark is still valid. The damages should be assessed from the 2 years preceding the commencement of the litigation.
Article 19 Trademark license contract without recordation with the Trademark Office will not adversely affect the effectiveness of the contract unless the contract parties agree otherwise.
A trademark license contract without recordation with the Trademark Office cannot be used against any third parties.
Article 20 The assignment of a registered trademark does not adversely affect the effectiveness of the trademark license agreement if the license agreement has become effective at the time of assignment of the mark unless the contract parties agree otherwise.
Article 21 When hearing disputes regarding the exclusive right of a registered trademark, the people's court may, in accordance with Article 134 of the General Principle of the Civil Law of the PRC and Article 53 of the Trademark Law, and based on each specific case, order the infringer to bear the liability of ceasing the infringement, removal of obstacles, elimination of dangers, compensation for losses and elimination of all ill effects. It also has the discretion to impose a fine, detain infringing goods, confiscate infringing trademark reproductions and materials as well as the tools and equipment used in the production of the infringing goods. The amount of the fine shall be determined according to the relative provisions of the Implementing Regulations of the Trademark Law of the PRC.
Article 22 When hearing disputes regarding the exclusive right of a registered trademark the people's court may at the request of the concerned party and depending on the specific situation of the case pass judgment on whether the concerned mark is "well-known".
In determining whether a mark is "well-known", the court shall refer to Article 14 of the Trademark Law.
Where the concerned party asks the court to protect the mark which was previously recognized as being well-known by an administrative authority or the people's court, and where the other party does not challenge the fame of the mark, the people's court will not examine this issue again. Where the other party does oppose the admittance of the mark as being well-known, the court will examine the issue in accordance with Article 14 of the Trademark Law.
Article 23 The provisions regarding goods under this interpretation will automatically apply to services as well.
Article 24 Where any prior provisions are not in compliance with this interpretation, this interpretation will prevail.
