Interpretation by the Supreme People’s Court Relating to Application of Law in Adjudication of Cases of Trademark Civil Disputes

(Adopted on 12 October 2002 at the 1246th Meeting of the Adjudication
Committee of the Supreme People’s Court)

The following explanations of the application of law are made in accordance with the General Principles of Civil Law 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, and the Civil Procedural Law of the People’s Republic of China for the purpose of correct adjudication of trademark disputes:

Article 1

The following acts are acts set forth in Article 52(5) of the Trademark Law that cause other injuries to the exclusive right to use a trademark:

(1) Use of words identical to or similar to the trademarks of others prominently as names of enterprises for identical or similar goods that are likely to cause public misidentification

(2) Reproductions, imitations and translations of others’ registered well-known trademarks or the principal parts thereof to be used as trademarks on goods that are not identical or similar but mislead the public and are likely to cause injury to the interest of the registrants of the well-known trademarks

(3) Use of words identical to or similar to the trademarks of others as domain names to conduct electronic commerce for the trading of relevant goods through such domain names that are likely to cause public misidentification

Article 2

In accordance with Paragraph 1 of Article 13 of the Trademark Law, any person who reproduces, imitates or translates well-known trademarks of others not registered in China or the principal parts thereof and uses the same as trademarks for identical or similar goods shall be civilly liable to cease and desist from the infringement if the use of the same will likely cause confusion.

Article 3

The licenses to use trademarks as set forth in Article 40 of the Trademark Law include the following three categories:

(1) Exclusive license, which means a license granted by a trademark registrant to allow a single licensee to use the trademark for an agreed period of time, within an agreed geographic area and in an agreed manner and that the trademark registrant may not use such registered trademark as agreed;

(2) Sole license, which means a license granted by a trademark registrant to allow a single licensee to use the trademark for an agreed period of time, within an agreed geographic area and in an agreed manner and that the trademark registrant may use the trademark as agreed, but may not allow any other to use such registered trademark;

(3) General license, which means a license granted by a trademark registrant to allow a single licensee to use the trademark for an agreed period of time, within an agreed geographic area and in an agreed manner and that the trademark registrant may use the trademark as agreed or allow others to use such registered trademark.

Article 4

The interested parties as provided for in Article 53 of the Trademark Law include licensees under registered trademark licensing agreements and lawful successors and assigns of the property rights of registered trademarks.

In the event of infringement upon the exclusive right to use a registered trademark, the licensee under an exclusive licensing agreement may bring an action before the people’s court; the licensee under a restrictive licensing agreement may bring an action jointly with the trademark registrant before the people’s court or bring such an action singly if the registrant does not bring an action; the licensee under a general licensing agreement may bring an action pursuant to an express authorization of the trademark registrant.

Article 5

If a trademark registrant or an interested party applies for an extension of a registered trademark during the grace period for extension of registered trademarks and, before the approval for the extension is obtained, brings an action against a third party infringement upon the exclusive right to use the registered trademark, the people’s court shall accept and hear the case.

Article 6

For any civil case brought against infringement upon the exclusive right to use registered trademarks, the people’s courts in places where the infringement takes place or where the infringing goods are stored or sealed for investigation and impounded or where the defendant resides shall have jurisdiction over the case as provided for in Articles 13 and 52 of the Trademark Law.

As provided for in the preceding paragraph, the place where the infringing goods are stored means the place where infringing goods are stored in material quantity or where such goods are often stored; the place where the infringing goods are sealed for investigation and impounded means the place where the infringing goods are sealed for investigation and impounded by the administrative authorities of the customs and of the industry and commerce.

Article 7

For a joint action involving multiple defendants and different places where the infringement has taken place, the plaintiff may choose the people’s court in the place where one of the defendants had carried out the infringement; for any action against only one of the defendants, the people’s court in the place where such defendant has carried out the infringement shall have jurisdiction over the case.

Article 8　

The relevant public as provided for in the Trademark Law means the consumers of a certain type of goods or service represented by a trademark or anyone closely related to the promotion and sale of such goods and service.

Article 9

An identical trademark as provided for in Article 52(1) of the Trademark Law means the trademark against which infringement is alleged represents no material visual difference from the registered trademark of the plaintiff.

A similar trademark as provided for in Article 52(1) of the Trademark Law means a trademark against which infringement is alleged that, when compared with the registered trademark of the plaintiff, is similar in the shape of words, phonetics, meaning or the shape of the graphics and its color, or in the general formation resulting from the positions of the all the principal elements, or in the three-dimensional shape or the formation of colors, and is likely to cause misidentification among the general public as to the origin of the goods or misperception that the origin of the goods is specially connected to the goods represented by the registered trademark of the plaintiff.

Article 10

Pursuant to Article 52(1) of the Trademark Law, the people’s court shall determine what constitutes identical or similar trademarks in accordance with the following principles:

(1) measure against the attention generally applied by the relevant public;

(2) conduct both an overall comparison of the trademarks and a comparison of the principal parts of the trademarks and the comparisons shall be conducted separately with the objects of comparison isolated from one another;

(3) to determine whether the trademarks are similar, consideration shall be made to the prominence and popularity of the registered trademarks for which protection is being sought.

Article 11

Similar goods as provided for in Article 52(1) of the Trademark Law mean goods that share similarities in function, usage, manufacturing entities and targeted consumers, or goods that cause the relevant public to believe in the existence of a special relationship or are likely to cause confusion.

Similar services mean services that share similarities in purpose, method and targeted consumers of such services, or services that cause the relevant public to believe in the existence of a special relationship or are likely to cause confusion.

If goods are said to be similar to services, it means the existence of a special relationship between the goods and services and the likelihood of the relevant public being confused about them.

Article 11

Where 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 13

When the people’s court ascertains the amount of compensation to be paid by the infringing party pursuant to Paragraph 1 of Article 56 of the Trademark Law, it may calculate the amount of compensation on the basis of the calculating formula selected by the claimant.

Article 14

The amount of gains obtained as a result of infringement as provided for in Paragraph 1 of Article 56 of the Trademark Law may be calculated by multiplying the quantity of sales of the infringing goods by the unit profit of such goods sold; if the unit profit of such goods cannot be ascertained, the calculation shall be based on the unit profit of the goods bearing the registered trademark.

Article 15

The losses caused by the infringement as provided for in Paragraph 1 of Article 56 of the Trademark Law may be calculated by multiplying the amount of sale reduction of the goods suffered by the claimant as a result of the infringement or the amount of sale of the infringing goods by the unit profit of the goods bearing the registered trademark.

Article 16

If it is difficult to determine both the amount of gains obtained by the infringer from his infringement and the losses resulting from the infringement suffered by the victim of the infringement, the people’s court may rely on the claimant’s request or use its discretion pursuant to Paragraph 2 of Article 56 of the Trademark Law to determine the amount of compensation.

In its determination of the amount of compensation, the people’s court shall take into consideration the nature, duration and consequence of the infringement, the reputation of the trademark in question, the amount of licensing fees for the use of the trademark, the type, duration and scope of the trademark license and the reasonable costs to enjoin the infringement.

The parties involved shall be permitted to reach a settlement agreement as to the amount of compensation pursuant to the first clause of this Article.

Article 17

The reasonable costs incurred to enjoin infringement as provided for in Paragraph 1 of Article 56 of the Trademark Law include the reasonable costs incurred by the claimant or his/her authorized agent to conduct investigation and evidence collection in respect of any infringement.

At the request presented by the party in action or as the specific circumstances of the case may require, the people’s court may include legal fees in the amount of compensation pursuant to the regulations of the relevant governmental departments.

Article 18

The statute of limitation for infringement upon the exclusive right to use registered trademarks is two years, commencing from the time when the trademark registrant or claimant knew or should have known of the infringement. If the trademark registrant or claimant brings an action beyond the two-year limitation and if the infringement continues at the time of the action, during the validity period of the exclusive right to use the trademark, the people’s court shall rule to enjoin the infringement by the defendant and the amount of compensation for the infringement shall be calculated for two years dating back from the time when the claimant brings the action before the people’s court.

Article 19

Failure to file a trademark licensing agreement shall not affect the validity of the agreement unless the parties thereto provide otherwise.

Any trademark agreement not having been filed with the Trademark Office shall not be used against any good-faith third party.

Article 20

The transfer of a registered trademark shall not affect the validity of a trademark licensing agreement that took effect before the transfer unless the trademark licensing agreement provides otherwise.

Article 21

When hearing cases of infringement upon the exclusive right to use registered trademarks, the people’s court may, pursuant to Article 134 of the General Principles of Civil Law, Article 53 of the Trademark Law and the specific circumstances of the cases, rule to order the infringer to bear such civil liabilities as to cease and desist the infringement, eliminate interference, compensate for losses and eliminate adverse effects. It may also order such civil sanctions as fines, confiscation of the infringing goods, counterfeit trademark representations and materials, tools and equipment used specifically to produce infringing goods. The amount of fines may be determined by reference to the Implementing Rules of the Trademark Law of the People’s Republic of China.

For the same act of infringement upon the exclusive right to use a registered trademark to which the administration for industry and commerce has rendered administrative sanctions, the people’s court shall not render any civil sanction.

Article 22

When hearing trademark disputes, the people’s court may, pursuant to the request of the parties involved and the specific circumstances of the cases, ascertain whether the registered trademarks involved are well-known pursuant to law.

Well-known trademarks shall be ascertained pursuant to Article 14 of the Trademark Law.

If a party seeks protection of a trademark already ascertained as well-known by the administrative authorities or by the people’s court, and the opposite party does not raise any objection in respect of the well-known mark involved, the people’s court shall not carry out any investigation thereof. In the event of any such objection, the people’s court shall investigate the matter pursuant to Article 14 of the Trademark Law.

Article 23

The explanations made in respect of trademarks for goods apply to service marks.

Article 24

In the event of any inconsistency between any relevant antecedent regulations and these explanations, these explanations shall prevail.