China trademark litigation: all the statistics you need to know

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Trademark litigation in China, has always been seen as an uphill battle, as the jurisdiction is infamously known for the intricate challenges it imposes on trademark owners. Of late, however, the tide is turning for the better as China has been consistently evolving and equipping itself to better handle IP disputes over the years.

Although the year 2020 has seen several landmark high-profile wins for major brands such as  New Balance, Treasury Wine Estates, and the NBA legend Michael Jordan, to name a few, there remains a  great deal of uncertainty plaguing foreign brands. This article strives to eliminate that very uncertainty by providing key insights into all the statistics you need to know when it comes to trademark litigation in China. Keeping on reading to know more.

  •   China continues to remain as the epicentre of the world’s largest IP litigation venues and has witnessed a significant increase in IP litigation cases over the past decade.
  •   While foreign brands make up for a very meagre percentage of the total trademark infringement cases in China, from the year 2015 and onwards foreign plaintiffs have been given higher levels of compensation and have enjoyed vastly greater win rates than their domestic counterparts.
  •   Louis Vuitton, Honglian International Trade, and MCM Holding are some of the most active foreign trademark asserters in China, other noteworthy, luxury brands such as Cartier and Chanel are also considerably active in the field. In fact, in the year 2018 Luxury brand, Louis Vuitton was the highest-ranking foreign plaintiff in the arena of trademark disputes.
  •   When it comes to the first instance cases, in the year 2018 local courts received a total of 201,039 new IP cases which embodied about 84.7% of the total of new cases which is a progression of at least  47.24% compared to the year 2016.
  •   Statistics also show that a substantial number of IP cases are either concluded or settled in the first instance and not further prolonged by way of lengthy appeals. This is good news for foreign parties engaged in a trademark dispute, as they will most probably save on time-consuming appeals.
  •   The most preferred IP litigation venues in China are situated in Beijing, Shanghai, Jiangsu, Zhejiang, and Guangdong which account for almost 70.65% of all IP cases in China. The popularity of these forums can be credited to the specialized IP Courts and tribunals in these locations, and also to the large magnitude of commercial activities that take place in the region.
  •   In the year 2015, the Beijing Intellectual Property Court ordered its very first “maximum statutory damage” under China’s trademark law in favour of the foreign plaintiff, a luxury brand by the name Moncler, in a trademark infringement and unfair competition dispute.
  •   Trademark disputes hold the second rank, on the list of all IP related disputes between parties with almost 37,946 new cases in 2018, which grew by 39.58% from the year 2017.
  •   The trademark application figures in China also show a monumental increase in numbers. In the year 2018, the CTMO (China Trademark Office) was inundated with no less than 358,600 trademark applications, a 57.5% increase from 2017. Additionally, the mean trademark examination period has also been trimmed from 8 months to 7 months in the year 2018. The State Administration of Market Regulation aims to further shorten the examination period to merely 6 months shortly.
  •   The crucial Micheal Jordan trademark dispute decision of 2020 as well unquestionably establishes a trend in the right direction as it allowed foreign as well as domestic brand owners to rely on prior name rights to defend against infringements, whereas the system previously favoured the first-to-file (and not a first-to-use) approach when it came to upholding trademark rights.

The Takeaway:

The most fool-proof method through which foreign companies entering the Chinese market can protect their trademarks is by register taking the time to register the trademark with the CTMO. To avoid running into a wall, foreign brands should invest in this endeavour even before entering into the Chinese market as this is not only the cheapest but also the most efficient method of avoiding trademark squatters.

Lastly, China’s trademark litigation has begun indicating greater positive opportunities and greater safeguards for foreign brands. Trademark protection has also been revamped by way of renewed laws that fortify the rightful brand owners. If China does want to continue its rally in economic development the Chinese market will naturally transform into an international trademark rights hub and boost competitiveness, innovation, and stimulate global growth.

Still, Confused? I’ve always found Vakilsearch useful in times like this. In my experience, Vakilsearch is by far the fastest and most valuable legal advice platform in India. You too can gain access to a treasure trove of experienced legal professionals, what are you waiting for, hand over your trademark queries to them today!

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