Strength of action in implementing trademark strategies

By Frank Liu, Tiantai Law Firm

As trademark holders easily understand, the timing and speed of actions is crucial to the effective implementation of trademark strategies. However, it is also necessary to control the strength of each implementation of a trademark strategy, taking into account the target of the action and any other moves related to it, as well as the ultimate business purpose to be achieved for the trademark holder. Moreover, appropriate control of strength is also of great significance to realizing the strategy itself. The following is an illustration of the strength of actions appropriate to different scenarios.

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Strength of actions against the same target at different stages. The implementation of a trademark strategy may involve either multiple different actions or only one complex action. Even if there is only one action, it is necessary to adjust its strength at different stages in line with the reaction of the target. For example, sometimes safeguarding trademark rights may involve an infringing target that has business partnership with the holder of the infringed trademark. In such a situation, legal action at the early stage generally needs to be taken with a moderate approach, and the lawyer’s letter has to focus on discussion or negotiation with the aim of resolving the dispute through means that do not affect the business relationship. However, if the other party does not want to cooperate, the trademark being infringed may suffer greater damage, possibly impacting other infringement activities in the market, which, ultimately, may have severe consequences. Despite such a situation, the trademark holder may still be reluctant to take an aggressive approach. In such a scenario, the lawyer’s letter will need to have a tougher tone, giving a clear statement of the infringement and related legal consequences to put further pressure on the infringer to stop the infringement.

There are times when merely sending lawyers’ letters to targets do not work. This prompts the need to consider a combination of moves, thereby enhancing the strength of actions to facilitate the effective implementation of the trademark strategy. For example, when lawyers’ letters are unlikely to work, we may consider lodging complaints or cracking down on counterfeits through third-party platforms, or even filing a civil or criminal tort lawsuit to stop the infringement.

Of course, it is not always appropriate or necessary to keep enhancing the strength of action. The strength may be decreased with consideration to specific details, for example business interest and the infringer’s reaction. Anyway, before taking specific action, it is important to keep in mind that trademark holders do not have the right to withdraw criminal lawsuits (among other actions) once initiated. Therefore, for any case needing softer action in the future, it is necessary to think twice before any such move is initiated.

Control of strength of actions against different targets. In judicial practice, there are many cases involving two or more infringers, which may play different roles in the infringements. For example, there are main producers of counterfeits, producers of infringing anti-counterfeit labels, national or regional wholesalers, shop dealers and even infringers that sell through online stores or WeChat. They cause varying levels of damage to trademark holders, based on the roles they play in the infringements. Taking identical actions of similar magnitude, without distinction, against all infringers is a waste of time and resources of trademark holders. It will also not play the desired role.

Also, infringers that sometimes do not have the obvious intent of infringement, but have sales channels or other resources qualifying them as competent business partners are likely to become potential distributors or partners of the trademark holders if appropriate measures are taken. Achieving the planned objectives depends not only on the willingness of the trademark holders, but also on pre-judgment of specific circumstances and proper control of the strength of action in the process of implementation.

Proper control of strength, taking into consideration the nature of actions. For complex infringement cases, where different actions may need to be taken simultaneously or in a certain sequence against different infringers, it is important to assess how the moves may affect each other. As far as habitual infringers are concerned, the best solution may be to take the toughest action once evidence is collected. For first-time infringers, doing so without obvious malicious intent, sending lawyer’s letters may suffice. As for the large number of infringers doing small-scale businesses on e-commerce platforms, lodging online complaints may help solve most problems. However, when taking action against malicious infringers, selling through multiple channels like e-commerce and physical shops, it is necessary to consider the possible existing relevance between various infringers and control the strength of action, accordingly.

Proper control over strength in view of the development of business models. While within the scope of legal services, trademark right validation and protection strategies are ultimately intended to help trademark holders achieve their business objectives. Therefore, the strength of actions must consider the impact on a trademark holder’s business plans and models in China.

When launching action to safeguard rights, it is important not only to consider effective crackdown on infringements, but also the possibility of future partnership with infringers in some cases. Proper control of the strength of any individual action under a trademark strategy provides two advantages. On the one hand, it may deter potential infringers with a signal to the market of the trademark holder’s determination to protect its rights. On the other, it helps to enhance brand awareness, allowing the trademark holder to achieve its business objectives of maintaining or increasing market share and enhancing brand influence.

In general, despite being an easily neglected area, proper control of strength of actions under trademark strategies is crucial to fulfilling the ultimate trademark strategies and helping trademark holders to achieve their business objectives.

Frank Liu is a partner at Tiantai Law Firm in Shanghai

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