Seattle Trademark Lawyer

Effective March 1, the judicial committee of the Supreme People’s Court of the People’s Republic of China adopted a new judicial interpretation speeding the time for courts to resolve trademark disputes and giving the owners of famous trade names and trademarks the ability to sue those who register the same or similar names or marks.

Beijing-based Wisdom IP Services recently translated the New Judicial Interpretation on Civil Disputes Over Registered Trademarks, Company Names and Conflicts of Prior Rights as follows:

“Objective: To correctly try cases of civil disputes over Registered Trademarks, Company Names and Conflicts of Certain Prior Rights, by taking judicial practices into account, New Judicial Interpretation are formulated in accordance with the Civil Procedure Act of PRC, the General Principles of the Civil Law of PRC, the Trademark Law of PRC, the Anti-unfair Competition Law of PRC and other relevant laws.

“Article 1. For a lawsuit filed on the ground that the character or graph used in the registered trademark of other party infringes upon the plaintiff’s copyright, design patent, company name or other prior right, if the lawsuit conforms to the provision of Article 108 of the Civil Procedure Law, the people’s court shall accept and hear the case. …

“Article 2. For a lawsuit is filed on the ground that a registered company used by other party is identical or similar to a prior registered company name of the plaintiff, which will bring confusion to the public on the commodity’s source of the defendant and thus is against Article 5(3) of the Anti-unfair competition law, if the lawsuit conforms to the provision of Article 108 of the Civil Procedure Law, the people’s court shall accept and hear the case.

“Article 3. The People’s Court should determine case brief for Civil Disputes Over Registered Trademarks, Company Names and Conflicts of Certain Prior Rights, in accordance with the Civil Case Brief Provisions (provisional), and apply suitable provisions, considering the claims of the plaintiff and the nature of the civil dispute.

“Article 4. If the company name of the defendant infringes the exclusive right of a registered trademark or falls into unfair competition, the people’s court should decide, according to the plaintiff’s appeal and the actual circumstances of the case, that the defendant must bear such civil liabilities as stop of use or proper use.”

The China Business Law Blog recently published two posts (here and here) about a 20 million yuan ($2.8 million) trademark infringement award by the Hangzhou Intermediate People’s Court. That’s a far cry richer than the 500,000 yuan ($64,000) Starbucks won last year in its trademark infringement suit (STL post on the decision here; discussion of the damages calculation in that case here). So why the (relatively) big award this time?

Here’s how the China Business Law Blog explains it:

“The court’s award of damages in [G2000 v. 2000] is intriguing. Plaintiff pleaded for damages totaling 20,000,000 Yuan (that is right, 20 million). And the Court ordered the Defendants to turn over the figures for total sales, profits, etc. for the goods complained of in the relevant period of time, but the Defendant failed to do so. Generally, Chinese courts award damages to a plaintiff in an IP infringement case to the extent of a defendant’s illegal profits as proven, rather than losses sustained by the plaintiff. … In addition, if the illegal profits or plaintiff’s losses cannot be accurately ascertained, the statutory maximum of damages is 500,000 Yuan. … Therefore, in an act rarely seen in Chinese courts, the Court awarded a whopping 20 million Yuan to the plaintiff.”

Despite the vast difference in amounts, this seems consistent with the Starbucks decision. The Starbucks court found the coffee company did not reliably establish the amount of the infringer’s profits or its own losses owing to the infringement, so it fixed damages at the statutory maximum of 500,000 yuan. Here, the court found the plaintiff had established the amount of its damages to the tune of 20 million yuan. Whether that proof was based on the infringers’ profits or plaintiff’s losses is unclear. (The China Law Blog could not find a copy of the decision and relied on Chinese-language press accounts for its post.) I can’t see how plaintiff could prove defendants’ profits without having their financial information. But I can imagine the court was in no mood to give defendants a break after they violated its order compelling production of such information.

The China Business Law Blog reports the defendants have appealed the case to the Zhejiang Higher People’s Court, so this decision may change.

The December 2007 issue of China Intellectual Property magazine had a nice write-up about the Starbucks Corp. v. Shanghai Xingbake Cafe Corp. Ltd. trademark infringement case that Shanghai’s No. 2 Intermediate People’s Court decided last year. The case (which STL discussed here) was important because it was the first time China’s new Trademark Law had been applied to a famous trademark.

Starbucks and Xingake logos
Photo credit: East Midlands China Business Bureau

Besides the detailed summary of the case, what I found most interesting was its explanation as to how the court calculated its RMB 500,000 ($64,000) damages award. Here’s an excerpt:

“The compensation claimed by the plaintiffs totalled RMB 1,060,000 including RMB 500,000 for economic losses and RMB 560,000 for reasonable expenses and legal fees. The defendants argued that the calculation of the plaintiffs’ profits was groundless, and thus should not be admitted. The defendants had no objection to the manner of collecting the notarization fee and legal fees, but held that the defendants’ lawyers spent too much time in collecting evidence proving the trademarks were well-known.

“The court held that it was on the basis of the profits made by the defendants from the infringement that the plaintiffs claimed compensation for economic losses. The amount of profits was calculated on the basis of the notarized statistics of the defendants’ customer volume. Although some factors on the formation of the defendants’ profits were taken into account at the time of calculation, the said amount is not completely objective and reasonable. Therefore, the court did not adopt this calculation for determining the amount of profits. The claim of the plaintiffs should be upheld for the retainer, notarization fee and translation fee as well as other fees. In the present case, the defendants committed trademark infringement and unfair competition. The overlapping parts should not be calculated repeatedly in the determination of compensation. Since it was hard to determine the profits made by the two defendants from the infringement and the losses suffered by the two plaintiffs from the infringement, the compensation should be lawfully determined as RMB 500,000 in view of the specific circumstances.”

The article’s author, Lv Guoqiang, should know what he is talking about. He is vice president of the Shanghai No. 2 Intermediate People’s Court.

Nicholas Weston has staked out some pretty big territory. With its launch of the Australian Trade Marks Law Blog, the Melbourne-based law firm joins my list of favorite regional trademark law blogs. (Also on the list: Canadian Trademark Blog, Chicago IP Litigation Blog, and Vegas Trademark Attorney.) And what a territory it is — ATMLB aims to provide a “reliable source of information and commentary” on trademark issues throughout Australia.

Contributing IP attorneys Mark Davison, Neil Brown, Nick Weston, and Lea Lewin have recently addressed the registrability of scent marks in Australia, Europe, and the U.S.; the importance of entries in the Macquarie Dictionary, the “accepted dictionary of ‘Australian English,’” in establishing trademark distinctiveness; and an Australian court’s decision involving counterfeit dishwashing detergent. This is good stuff for anyone with trademark issues down under.

Australian trademark law: looks friendly but can be painful

ATMLB warns that Aussie law is full of quirks, like the Australian dialect of English. Or the platypus. It “can seem odd at first encounter. It is efficiently adapted to its environment. It looks like you could pat it. But it has a venomous spur on its hind legs that can cause excruciating pain.”

If ATMLB can help practitioners avoid that pain, it will become required reading. Glad to have you out there!

The Seattle- and Shanghai- based China Law Blog explains the “agent” exception to China’s first-to-file rule. Citing a post by the China Business Law Blog, it summarizes Chinese authority holding that a trademark owner’s business agent cannot act as the owner’s agent in registering a trademark.

“What this means in real life is that if you are a foreign company manufacturing your product in China, the company you use to find your manufacturer and the company you use for your actual manufacturing cannot file your foreign trademark in China. So if you have a United States trademark and you make the huge mistake of not registering your trademark in China when you first go over there, there are about 1.3 billion people in China who can register ‘your’ U.S. trademark in China and ‘take’ it from you, but your agents are not one of them.

“What this really means though is that everyone in China can usurp your trademark by registering it, even your agents. This agent exception to China’s first to file rule has become so well known that any agent with any intelligence will not go off and register your foreign trademark in China. Instead, they will have their cousin or brother in law or someone else go ahead and do it so as to avoid the agent rule.”

China Law Blog’s advice? Get your mark registered — properly — as soon as possible. Then you can forget about the agent exception.