How TM owners can flexibly use administrative protection

Trademark owners generally encounter various difficulties in defending their rights, specifically in terms of evidence collection, high costs and low compensation. Unlike most countries worldwide that use judicial means to resolve trademark disputes, China adopts a dual-track system of “judicial protection” and “administrative protection”, in which trademark owners may seek maximum protection either way.

If trademark owners make flexible use of administrative protection based on their specific circumstances, they may effectively tackle the above-mentioned difficulties in defending their rights.

First, the administrative protection procedure can partially eliminate difficulties in obtaining evidence. In practice, due to the typically hidden nature of infringement, even if trademark owners find traces, they cannot enter plants or warehouses to collect evidence. Numerous other limitations and inconveniences can make it challenging to obtain evidence to satisfy the requirements of litigation, even if professional investigators are hired to deal with it.

However, as administrative authorities, trademark law enforcement authorities have the right to take strong measures through coercive power such as inquiry, inspection, investigation and seal-up or seizure against suspected offenders.

These authorities can enter production plants or warehouses to conduct inspections of inventory and even impound products. Since evidence is collected by administrative authorities, this is considered highly credible and easily submitted by trademark owners to the court for civil infringement litigation.

Reducing costs

Second, trademark owners may reduce the costs of trademark protection through administrative protection. Trademark owners are only required to provide preliminary infringement evidence, which can be collected by hired professional market investigators. The administrative authorities will mainly handle the enforcement process with their statutory powers free of charge. This requires less work and expenditure on investigation by trademark owners and their lawyers, greatly reducing relevant costs.

Additionally, trademark owners may increase their compensation by making flexible use of the administrative protection procedure. Although the administrative authorities can only mediate on compensation amounts via protection procedures, they have already determined the fundamental infringement facts, which puts infringers in a disadvantageous position and trademark owners in a more favourable one. This makes settlement more likely between both parties, with trademark owners obtaining satisfactory compensation.

Even if mediation fails, trademark owners may still be awarded higher damages in civil proceedings with the help of evidence collected by the administrative authorities, such as the specific amounts of infringing products, sales amounts, or even financial accounts. If infringement does not cease after the penalties, trademark owners may also claim punitive damages in civil proceedings.

Speedy resolution

Finally, administrative protection is more speedily effective in defending trademarks. Administrative enforcement only takes about three to six months from acceptance of the case to issuance of an administrative penalty decision, which is fast, efficient and may quickly stop the infringement. This is especially important for products with a short market cycle.

Once the enforcement authorities determine a complaint by a trademark owner constitutes an infringement of trademark rights after investigation, corresponding measures under article 60 of the Trademark Law may include ordering immediate cessation of the infringement, confiscating and destroying infringing goods and tools mainly used for manufacturing them, and forging the registered trademarks, as well as imposing corresponding fines.

Besides, according to the Interim Regulations on Enterprise Information Disclosure, the enforcement authorities will disclose information on administrative penalty cases in the National Enterprise Credit Information Publicity System, to warn infringers, protect consumers and restrain law enforcers. These are all very effective means in stopping infringement.

Initiating protection

In practice, trademark owners only need to provide two types of evidence and materials to initiate the administrative protection procedure.

The first is evidence of infringement, identifying the infringer and suspected type of specific infringement. Trademark owners also need to investigate and verify the suspected infringer’s production sites, production scale, storage place and sales channels to facilitate smooth implementation of the administrative enforcement. For information or materials that can be wiped out or damaged ‒ such as websites, online stores and samples with infringing trademarks ‒ notarisation is recommended.

The second is providing proof of the trademark owner’s identity, such as the business licence and resident identity card, along with proof of ownership, such as the trademark registration certificate, renewal certificate and licence contract. In the case of foreign-related claimants, the identification and authorisation documents must be notarised.

After this preparation, trademark owners may request protection from a trademark law enforcement authority at or above county level in the place where the infringement is committed. Enforcement authorities at or above county level in the place where the infringing products are produced, sold, stored, or where the infringer has registered an actual business, are entitled to jurisdiction.

Conclusion

Administrative protection of trademarks is a powerful tool for protecting trademarks. In practice, trademark owners may determine the best way to defend their rights after comprehensive consideration of the purpose, effect and advantages and disadvantages of various protection measures, based on the actual situation of cases, to safeguard their legitimate rights and interests. Therefore, enterprises are suggested to thoroughly study and make flexible use of the administrative protection procedure to realise better, quicker and cheaper protection of trademarks.

Chen Jian is the managing partner and Hu Xiaoxia is an associate at Wan Rui Law Firm

Wan Rui Law Firm is a member of Sanyou IP Group