China's Supreme People's Court
(SPC) has ordered courts at all levels to intensify the judicial protection on well-known trademarks home and abroad. It states "abusive application of judicial affirmation of well-known trademarks must be forbidden".
SPC Vice-President Cao Jianming says the affirmation of well-know trademarks by courts should be an effective way to improve trademark protection.
"However, new problems have appeared in recent years and we must prevent some companies from deliberately creating trademark disputes as a means to boost the profile of their previously obscure product," Cao says in a recent national work conference on IPR trials in Jinan, capital of East China's Shandong
He ordered courts to intensify the examination over the incentives by the parties demanding an affirmation, especially cases to affirm a well-known trademark during domain name disputes.
"If it can be proven that a party is deliberately creating a dispute, they will be punished according to the Civil Law, which will hold them accountable for breach of civil lawsuits," says Cao. "The original trial results and well-known trademark affirmation should also be cancelled."
The judicial affirmation of well-know trademarks is only allowed when the trademarks have been maliciously registered or infringed, and "any other purposes to look for judicial protection for well-know trademarks will not receive support from people's courts", Cao says.
Moreover, courts should accurately understand the conditions and requirements for well-known trademark affirmation.
An affirmation of a well-known trademark should start from the day when it is infringed, not the starting day of the lawsuit.
Protection is also available in instances where the owner uses the trademark in more than one industry or another party uses the trademark in an Internet domain, says Cao.
When considering cases of cross-industry trademark affirmation, "courts should come to rational conclusions according to the trademark's reputation, prominence and the negative consequences of its 'infringement', and the protection cannot be used in unprincipled ways," Cao says.
"Cross-category protection should not be exaggerated blindly into commodity categories that are obviously unrelated, nor to limit due protection on cross-category products."
SPC also emphasizes its trademark record system.
"Courts must immediately report to the SPC's archive once a well-known trademark is affirmed and the verdict takes effect."
The Chinese Trademark Law was enacted in 1982 and revised in 1993 and 2001. It states that the best proof of "well-known trademarks" in IPR-related disputes include demonstrations of consistency in use and consumer awareness, promotional efforts and records of protection.
Of the 1,000-plus well-known trademarks in China, 800 were approved by the State Administration for Industry and Commerce
, and the rest by courts.
The number of well-known trademarks confirmed by courts jumped from 20 in 2004, 68 in 2005 and 80 in 2006.
Last June the SPC awarded Japan's Yamaha Motor the highest-ever damages for a trademark infringement case in China involving a foreign investor, 8.3 million yuan ($1.1 million), against Zhejiang Huatian, one of China's largest motorcycle makers.
Hailed as an "epoch-making" verdict by Yamaha and legal experts, the damage was calculated based on the principle of preponderance of evidence.
Jiang Zhipei, chief justice of the SPC's IPR Tribunal, tells China Business Weekly: "If it were handled simply according to legal compensation regulations the compensation would have been under 500,000 yuan."
"But the fact was that the plaintiff did lose millions of yuan according to evidence provided by the plaintiff," Jiang adds.