Development of Trademark Administrative Protection

To meet the requirements of the reform and opening-up policy as well as economic development, Trademark Law of the People's Republic of China (hereinafter Trademark Law) was enacted in August 1982 and came into force on 1st March 1983 in China. It is the first law in the intellectual property field that established solid legal foundation in trademark area for China 's rapid and healthy economic development. In order to meet the requirement of economic development and entry into WTO, Trademark Law was revised twice respectively in 1993 and 2001 so as to comply with the TRIPS agreement. After more than 20 years' institutional construction of Trademark Law, a well-fledged trademark regime has been established in China , and a fairly modern trademark legal system based on Trademark Law and compliant with international rules has been formed.

I. The administrative enforcement mechanism with Chinese characteristics plays a significant role in protecting trademarks.

According to the current situations of China , the double-track trademark protection system was adopted under the Trademark Law. This system, featured with Chinese characteristics, works in the way that both administrative protection and judicial protection coordinate harmoniously in parallel. That is, parties concerned in trademark infringement cases may not only bring lawsuits to the people's court, but also resort to the Administrations for Industry and Commerce (AICs). With respect to trademark infringement cases, AICs at and above county level enjoy jurisdiction and they may, ex officio or upon the report/complaint made by anybody/right holders, carry out the investigation and make administrative decisions. In most of other countries, parties concerned in trademark disputes generally have to resort to judicial procedures, which are more time-consuming and costly, while in China , the AICs deal with most of trademark infringement cases, the majority of which are settled by their initiative actions. This administrative protection with Chinese characteristics not only effectively protects the exclusive rights to use a registered trademark, but also safeguards the interests of consumers.

The advantages of the administrative enforcement by AICs can be identified as follows:

1. Pro-activeness

The AICs may, ex officio or upon the request of the parties concerned, investigate and deal with trademark infringement cases. Upon the interested party's request, they may mediate among the concerned parties in settling the amount of damages suffered from infringement.

2. Convenience and Efficiency

In the case of administrative enforcement, the AICs require only basic evidences provided by the trademark registrant or the interested parties, thus relieving their burden of proof. This is quite effective in deterring trademark infringement.

3. Effectiveness

In terms of the administrative enforcement method, the AICs may take administrative compulsory measures against suspect infringers, such as inquiry, inspection, investigation and seizure or confiscation. In terms of the administrative settlement and decisions, the AICs may make various types of administrative punishments, such as ordering to stop the infringement act, confiscating or destroying the infringement goods and tools utilized for counterfeiting, and imposing fines on offenders.

In order to maintain the interests and rights of consumers and trademark holders, China 's Trademark Law provides that the AICs may ex officio investigate and handle trademark infringement cases. At present, most of trademark infringement cases are settled by the AICs ex officio. Taking Shanghai Municipal AIC for instance, from January to September in 2005, the total number of trademark cases dealt with was 1,056, among which 1,011 cases, namely 96 percent of the total, were investigated pro-actively by the AICs, and only 4 percent were dealt with upon the request or complaint of the right holders. It is the active actions launched by the AICs that alleviate the cost of the rights owners and effectively safeguard the legitimate rights of the party concerned. This active trademark protection system is unique in the world and welcomed by right owners.

The AICs' pro-active administrative protection needs strong support from the society. The clues merely collected by the AICs during their daily patrol are limited, however, more information can be found in the consumer's reports or in the complaints by the right holders. “12315 administrative law enforcement system” presents a significant channel for the AICs to obtain infringement clues.

Up to the end of 2006, the number of 12315 offices or complaint contact points created and run by the AICs across the country has reached 270,000, and the coverage rate has achieved 63 percent in urban areas and 48 percent in rural areas. With the continuing extension of the “ 12315” network, the protection for the legitimate rights has consequently been covered in more regions, thereby playing an important role in receiving complaints concerning trademark infringement and counterfeit. Quite a large number of clues about trademark cases initiated by the AICs derived from the “ 12315” system.

II. The effect of trademark administrative enforcement is outstanding

In accordance with the State Council's requirement of rectifying and standardizing the market economic order and strengthening protection for intellectual property rights, SAIC and local AICs at all levels across the country have been performing their duties actively and reinforcing the trademark administrative enforcement since China entered into WTO six years ago. They transferred suspected trademark-related criminal cases according to the law, further strengthened protection for foreign-related trademarks and stepped up the rectification of wholesale and retail markets that foreign and domestic right holders concern. The market economic order has gradually been improved.

1. Dealing with a great number of cases concerning trademark infringement and counterfeiting.

Statistics show that the AICs at all levels across the country dealt with 193,332 trademark infringement cases since China's accession to WTO, among which 28,041 are foreign related, 778 suspects involved in 774 cases were transferred to the police for criminal investigations. In 2006 there were 263 suspects involved in 252 cases transferred to the police.

2. Discovering effective administrative modes of deterring sales of counterfeits in wholesale and retail markets.

AICs in Beijing , Shanghai , Tianjin made innovation in modes of administration. They provided strong protection to 40 high-reputed foreign trademarks owned by enterprises from a number of foreign countries such as France , Netherlands , Switzerland , Luxemburg , U.K. and Germany . The local AICs issued special notices in marketplaces saying that without the authorization of those trademark owners, any sales of clothing and small items with those trademarks are prohibited. It is an effective way to deter selling infringing goods and counterfeits in wholesale and retail markets. The Beijing AICs required market leasers to take their own responsibilities of managing and inspecting markets and imposed administrative punishment on those who provided facilitation of storage and hiding for infringing goods or counterfeits. As a result, the markets leasers' awareness and enthusiasm of managing markets have been improved. The Beijing AIC introduced and promoted Trademark Franchising Regulation System in 164 marketplaces of the city. This system clearly defines the responsibility of the leasers in supervising the use of trademarks by venders and combating against trademark infringements in their markets, thus increasing their consciousness and activeness of protecting intellectual property rights.

3. Employing trademarks and geographical indications (hereinafter GIs) to increase farmers' income and promote rural economic development.

The local AICs at all levels paid more attention and efforts to the registration of and protection for farm produce trademarks and GIs. They guided farmers and agriculture-related enterprises to develop the specialty agriculture which would help to improve efficiency, increase farmers' income and promote the development of rural areas. In many regions, a trademark can boost an industry, energize local economy, and enrich local farmers.

Statistics show that China has a total number of 370,000 farm produce trademarks (registered in Class 29 to 31 of International Classification of Goods and Services for the Purpose of Trademark Registration) by the end of 2006, accounting for about 13 percent of the total registered trademarks. Among the total number of 219 registered GIs, there are 188 owned by Chinese right holders, covering 240 counties of 27 provinces, autonomous regions and municipalities. Among all the 800 well-known trademarks granted by the Trademark Office and Trademark Review and Adjudication Board of SAIC, nearly 100 are related to farm products and 4 are GIs.

4. Strengthening protection for Olympic Symbols

The AICs at all levels across the country seriously performed their duties according to the law in recordal of Olympic Symbols, License recordal of Olympic Symbols, registration of Olympic-related trademarks and special marks, and protection for Olympic symbols. All work mentioned above effectively helped to enhance the protection for Olympic symbols, to standardize the use of Olympic symbols, and safeguard the interests and rights of the Olympic symbol owners. So far, the Trademark Office of SAIC has completed the recordal of 69 Olympic symbols and 7 registration of special marks. According to statistics, the AICs have dealt with 1,128 Olympic symbol-related infringement cases from 2004 to 2006, in which the concerned damages amount to 14,890,000 RMB, fines 8,380,000 RMB, and 7 suspects involved in 2 cases were transferred to the judicial authorities for criminal liabilities. In 2006, the AICs further intensified their campaigns to crack down on infringement of Olympic symbols. Altogether 428 cases were dealt with, which is a 45 percent increase compared with that of 2005.

The practice proves that the double-track system is not only compliant with Chinese characteristics, but also feasible. In the future, AICs at all levels will continue to enforce the law as firmly as ever, actively deal with trademark infringement cases based on clues from the platform of “ 12315” so as to effectively protect trademark rights, safeguard the market order with fair competition and make due contributions to the healthy, rapid and sustainable development of the socialist market economy.