Background
The Beijing IP Court issued a decision in July 2022 confirming the right to compensation for victims of bad faith trademark registration. To date, no such decisions had been issued by courts in Beijing, only by the courts of Shanghai, Hangzhou, Xiamen and Guangzhou (in a case handled by SIPS).
In the Beijing decision, the court ruled that the victim can claim compensation of legal costs incurred in registry actions necessitated by the bad faith behavior, including the cost of pursuing an invalidation as well as appeals of the rejections of victim’s trademark applications.
Following practice of other courts, the court conditioned relief on the fact that the bad faith pirate had sought to enforce its pirated trademark registration. Decisions of other courts also decided for the plaintiff based upon the pirate’s actual use of the pirated mark.
Trademark owners and associations have been advocating for Chinese courts will recognize the right of trademark owners to secure damages to cover their legal expenses without the need to prove that the pirate either used the victim’s mark or that it pursued enforcement measures against the victim or its business partners. However, Chinese courts have generally denied such relief on the basis that the mere filing of a trademark application – even if done in bad faith – does not qualify as a “civil act”.
Notably, CNIPA recently indicated that it would support amendments to the PRC Trademark Law that would explicitly allow access to such relief. For further information in this regard, see SIPS update here. However, the timeline for amendment of the Trademark Law remains unclear.
Case Note
Parties | Plaintiff: Beijing Gubei Water Town Travel Co., Ltd.
Defendant: Beijing Xiaohao Technology Co., Ltd (“Xiaohao”) |
Date of Decision | July 15, 2022 (appeal) |
Courts | First Instance: Beijing Dongcheng District People’s Court
Second (Final) Instance: Beijing IP Court |
Status | Decision in the lower court decided for the plaintiff.
On appeal, the Beijing IP Court ruled to sustain the lower court’s decision. |
Plaintiff’s Assertions |
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Defendant’s Arguments |
In the first instance, Defendant did not dispute the facts, but argued – unsuccessfully – that:
In the second instance, Defendant argued that:
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Court’s Holdings | Defendant was ordered to compensate the Plaintiff for economic losses in the amount of RMB280,000 (~USD40,000) plus reasonable expenses RMB35,000 (~USD5,000), and to issue a public apology in the China IP News (中国知识产权报).
In particular, both courts explicitly supported plaintiff’s claims for the legal expenses incurred in the registry actions – including the invalidation of pirate mark and the appeal of refusal for its own application, as well as subsequent court appeals. Courts reasoned that these were damages caused by Defendant’s bad faith registration of the pirate mark. |
(2021) Jing 73 Min Zhong No. 4553 [(2021)京73民终4553号]