52 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 OCTOBER 2023 Among the 10 trademark-related typical cases published by the National Intellectual Property Administration in 2022, 8 of them were initiated upon the reports/complaints of the right holders. For instance, the Beijing Dongcheng District Market Supervision Administration received complaint reporting some suspected NIKE counterfeits were sold in a certain market in Beijing. The AMR thus conducted the raid action, confiscated all the counterfeiting shoes and imposed the infringer to pay a fine of RMB 30,000.1 Advantages: Compared to civil litigation, this method is less time-consuming; right holders usually don’t need to provide extremely comprehensive evidence considering the AMR will conduct investigations on its own, making it relatively easier to collect evidence of infringement; the AMR will also publish the penalty decisions on government websites, which to some extent could deter the potential infringer. Disadvantages: The primary goal of administrative penalties is to punish infringers, so the right holders are unable to obtain monetary compensation from infringers; local protection may also be an issue; the AMR usually only accepts straightforward trademark infringement cases, so they may be unwilling to take the case where it involves complexity. The AMR may persuade the right holders to file civil action instead. 4. Reporting to the Public Security Bureau ( “PSB”) Serious trademark infringement or large-scale infringements could potentially violate the PRC Criminal Law and constitute criminal offenses. There are three crimes related to trademark infringement under current PRC Criminal Law, namely “Crime of Counterfeiting Registered Trademarks,” “Crime of Selling Goods with Counterfeit Registered Trademarks,” and “Crime of Illegally Manufacturing or Selling Trademark Counterfeit Labels.” If a right holder discovers that a severe infringement that might constitute a crime, it can report to the public security bureau (“PSB”). The PSB will conduct investigation, and send the case to the state prosecutor to bring charges. If the court finds the infringer is guilty for any of the three crimes, the infringer might be sentenced to up to 10 years of imprisonment along with a fine. The PSB may also take the case upon the transfer from AMR. If a local AMR finds that the circumstances might constitute a crime, it can transfer the case to the competent police agency. If the right holders collect sufficient evidence, it can file a criminal lawsuit with the court directly to hold the infringer criminally liable, although there are few successful cases in practice. According to statistics released from the Supreme People’s Court, in 2022, courts at all levels accepted 4,971 first-instance criminal cases involving infringement of registered trademark rights, accounting for about 1% of all intellectual property cases accepted by courts nationwide and approximately 93% of all first-instance intellectual property criminal cases.2 Advantages: Powerful deterrence on infringers. Disadvantages: Right holders usually cannot recover monetary compensation from infringers in this way; the threshold for a criminal case is relatively high, only applying to cases with severe circumstances or significant infringement amounts, typically limited to situations where identical trademarks are used on identical goods. 5. Customs Protection When trademark infringement disputes involve cross-border trade, Customs protection also provides a resolution for the right holders to safeguard their rights. Customs protection starts ex officio and upon request. Most of the time, the Customs undertakes boarder protection for IP rights ex officio. Once the right holders recorded their IP rights with Customs, the Customs will notify the right holders once it spotted any suspected infringing products. If the right holders verify that the goods are indeed counterfeits/knockoffs, and they apply for detention and submit the bond, the Customs will detain the goods. Depending on the investigation results, the Customs may take measures such as destroying infringing products or imposing fines. If the case involves any suspected criminal offenses, the Customs will transfer it to public security authorities. The right holders can also 1 China National Intellectual Property Administration, “Release of 2022 Typical Cases of Intellectual Property Administrative Protection”, published on April 26, 2023, https://www.cnipa.gov.cn/art/2023/4/26/art_3207_184726.html 2 China Supreme People’s Court, “Intellectual Property Protection by Chinese Courts in 2022”, published on April 20, 2023, https://www.court.gov.cn/zixun-xiangqing-397082.html Chapter 1
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