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COPYRIGHT BKIP 2019
Is IPR protection sufficiently strong in China? The recent development of IPR protection in China. Jun 2019
In respect of the recent Trade War between China and the U.S., it is alleged to be a partial response to infringement of US intellectual property rights (IPR) in China, the US government has now imposed an additional 25% tariff on Chinese products valued at $50 billion. At the same time, China has its own list of US products with tariffs of up to 25%.
Is IPR protection sufficiently strong in China? We would like to take a look at the decided cases to review the recent development of IPR protection in China.
Legal regime prior to 2014:
Prior to the new Trademark Law which has come into effect in May 2014, the maximum statutory damages available to IPR owners was only RMB 500,000 (US$80,000).
Legal regime starting from 2014 onwards:
The maximum statutory damages awarded has been raised to RMB 3 Million (US$448,000), since the new Trademark Law came into effect in May 2014.
Moncler Case in 2014
In December 2014, the Beijing IP Court (”IP Court”) issued a judgment against the defendant for trade mark infringement and unfair competition. The IP Court found that the defendant had knowingly and without Moncler’s (the owner’s) prior authorization, used trade marks which were confusingly similar to Moncler’s trademarks in the defendant’s advertisement and promotional activities for the sale of down jackets and accessories.
The defendant was ordered by the IP Court to pay the damages of RMB 3 million (around US$448,000) to Moncler.
Even though Moncler did not adduce any evidence of actual loss suffered, and the defendant did not disclose its sales volume or the amount earned by it in related to the infringing use of Moncler’s marks, the IP Court did order the maximum statutory damages under the new Trademark Law.
New Balance Case in 2017
In August 2017, the Suzhou Intermediate People’s Court, near Shanghai, ruled that three defendants that made shoes under the brand name “New Boom” were infringing the trade mark rights of New Balance, and ordered the three domestic shoemakers to pay New Balance an unprecedented RMB 10 Million (around US$1.5 million) in damages for the infringing activities.
Level of increments in damages in recent years
Before the new law is enforced in 2014, the maximum damages available was only RMB 500,000 (US$80,000). As stated by Moncler case, it was regarded as a ground-breaking case, believed to be the first judgment under China’s new trademark law to grant maximum statutory damages of RMB 3 million (around US$448,000) in cases of counterfeiting. The maximum statutory damages was in fact 6 times of that of the Pre-2014 era.
In the New Balance case, the Court even ordered the three domestic shoemakers to pay New Balance an unprecedented all-time high damages of RMB 10 Million (around US$1.5 million).
By looking at the escalation of damages awarded to foreign IP right owners in recent years, we are confident to say that the protection offered to IP right owners in China has been significantly improved at a pace faster than the overall economic development.