Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of Law in the Trial of Civil Cases Involving Trademark Disputes
 
(Fa Shi [2002] No. 32; Adopted at the 1246th Session of the Trial Committee of the Supreme People's Court on 12 October 2002; Effective as of 16 October 2002)
 
In order to correctly try trademark dispute cases, we hereby issue interpretation as follows on certain issues concerning the application of law in accordance with the provisions of the General Principles of the Civil Law of the People's Republic of China, the Trademark Law of the People's Republic of China, the Civil Procedure Law of the People's Republic of China, and other laws:
 
Article 1    The following acts constitute acts that cause any other prejudice to another's exclusive right to use a registered trademark as set forth in Item (5) of Article 52 of the Trademark Law:
(1) To prominently use, as the trade name of an enterprise, words that are identical or similar to another's registered trademark on the same or similar goods, which is liable to cause misidentification among the relevant public;
(2) To reproduce, imitate, or translate another's registered well-known trademark or a major part thereof and use such reproduction, imitation, or translation as a trademark on different or dissimilar goods, which misleads the public and causes potential prejudice to the interests of the registrant of that well-known trademark; and
(3) To register, as a domain name, words that are identical or similar to another's registered trademark and use the domain name to carry out electronic commerce on the trading of the relevant goods, which is liable to cause misidentification among the relevant public.
 
Article 2    According to the provisions of Paragraph 1 of Article 13 of the Trademark Law, in the event of reproducing, imitating, or translating another's well-known trademark that is not registered in China or a major part of that trademark and using the reproduction, imitation, or translation on the same or similar goods, thus being likely to create confusion, the said user shall be subject to the civil liability of ceasing infringement.
 
Article 3    The trademark licenses specified in Article 40 of the Trademark Law include the following three types:
(1) Exclusive license, under which a trademark registrant licenses the use of the registered trademark to one licensee only, with the use to be conditional upon an agreed time period, territory, and manner and the registrant to be prohibited under the agreement from using that registered trademark;
(2) Sole license, under which a trademark registrant licenses the use of the registered trademark to one licensee only, with the use to be conditional upon an agreed time period, territory, and manner and the registrant to be permitted under the agreement to use that registered trademark but prohibited thereunder from licensing the use of that registered trademark to others;
(3) Non-exclusive license, under which a trademark registrant licenses the use of the registered trademark to others, with the use to be conditional upon an agreed time period, territory, and manner and the registrant to be permitted both to use that registered trademark and to license the use to others.
 
Article 4    For the purposes of Article 53 of the Trademark Law, "interested parties" shall include the licensees under the relevant license contract for a registered trademark, lawful successors to the property rights in the registered trademark, etc.

Where the exclusive right to use a registered trademark is infringed, the licensees may file a lawsuit with a people's court, in the case of an exclusive license contract; or the licensees may either jointly file a lawsuit with the trademark registrant or independently file a lawsuit if the trademark registrant does not, in the case of a sole license contract; or the licensees may file a lawsuit under an explicit authorization granted by the trademark registrant.
 
Article 5     Where a trademark registrant or interested party files a renewal application during the grace period for extending the validity term of the registered trademark, and files, before the approval is granted for the application, a lawsuit on the grounds that the registrant's exclusive right to use the registered trademark has been infringed by another, the relevant people's court shall accept the case.
 
Article 6    Any civil lawsuit filed against the infringement of the exclusive right to use a registered trademark shall be under the jurisdiction of the people's court of the place where the infringement is committed, where the infringing goods are stored, where they are seized or detained, or where the infringer is domiciled as set forth in Articles 13 and 52 of the Trademark Law.
 
For the purposes of the preceding paragraph, the place where the infringing goods are stored shall mean the place where the infringing goods are stored or hidden in a large quantity or on a frequent basis; the place where the infringing goods are seized or detained shall mean the place where an administration authority such as the Customs or the administrative authority for industry and commerce seizes or detains the infringing goods.
 
Article 7    With respect to a joint lawsuit filed against more than one defendant who commits the infringement in different places, the plaintiff may select the jurisdiction of the people's court of the place where one of the defendants has committed the infringement; a lawsuit filed against only one of the defendants shall be under the jurisdiction of the people's court of the place where the infringement is committed.
 
Article 8    For the purposes of the Trademark Law, the "relevant public" shall mean the consumers pertaining to certain goods or service identified by a trademark and other business operators closely associated with the marketing of such goods or service.
 
Article 9    Trademarks being identical, as mentioned in Item (1) of Article 52 of the Trademark Law, shall mean, through comparison between the alleged infringing trademark and the plaintiff's registered trademark, the two marks being basically not different from a visual perspective.
Trademarks being similar, as mentioned in Item (1) of Article 52 of the Trademark Law, shall mean, through comparison between the alleged infringing trademark and the plaintiff's registered trademark, the two marks being similar to each other in the composition, pronunciation, or meaning of the words contained in each or in the composition and colors of the devices contained in each, in their overall structure after combination of the elements, or in their three-dimensional shape or combination of colors, each of which is liable to cause the relevant public to misidentify the source of the goods concerned or mistakenly believe that the source has a particular connection with the goods bearing the plaintiff's registered trademark.
 
Article 10    A people's court shall, in determining whether two trademarks are identical or similar in accordance with Item (1) of Article 52 of the Trademark Law, apply the following principles:
(1) Use the normal level of attention of the relevant public as the criterion;
(2) Conduct both the overall comparison of the trademarks and the comparison of their primary elements, with the comparisons to be carried out respectively for each compared mark when being isolated from the other; and
(3) In the case of determining whether the trademarks are similar, take into consideration the distinctiveness and degree of popularity of the registered trademark of which protection is requested.
 
Article 11    Similar goods, as mentioned in Item (1) of Article 52 of the Trademark Law, shall mean goods of which the functionality, purposes, production divisions, sales channels, consumers, etc. are the same or goods that have a particular association between each other, as the relevant public usually believes, which is liable to cause confusion.
 
Similar services shall mean services of which the purposes, content, forms, users, etc. are the same or goods that have a particular association between each other, as the relevant public usually believes, which is liable to cause confusion.
 
Goods being similar to a service shall mean a particular association exists between such goods and service, which is liable to confuse the relevant public.
 
Article 12    A people's court shall, in determining whether certain goods or services are similar in accordance with Item (1) of Article 52 of the Trademark Law, carry out a comprehensive judgment on the basis of the relevant public's average knowledge of the goods or services.
 
The International Classification of Goods and Services for the Purposes of the Registration of Marks and the Classification of Similar Goods and Services may be used as references for the purpose of determining whether certain goods or services are similar.
 
Article 13    A people's court may, in determining an infringer's liability for compensation in accordance with Paragraph 1 of Article 56 of the Trademark Law, use the method elected by the right owner to calculate the compensation sum.
 
Article 14    The benefits gained from infringement, as mentioned in Paragraph 1 of Article 56 of the Trademark Law, may be calculated by multiplying the sales volume of the infringing goods by the unit profit of such goods.
 
Where it is impossible to ascertain the unit profit of the infringing goods, the unit profit of the goods bearing the registered trademark shall be used for the calculation.
 
Article 15    The losses resulting from infringement, as mentioned in Paragraph 1 of Article 56 of the Trademark Law, shall be calculated by multiplying the decrement of sales volume of the goods suffered by the right owner due to infringement, or multiplying the sales volume of the infringing goods, by the unit profit of the goods bearing the registered trademark.
 
Article 16    Where it is difficult to ascertain the benefits gained by an infringing party from infringement or the losses incurred by the infringed party due to the infringement, the relevant people's court may ascertain the compensation sum pursuant to the request of the party concerned or power of office, with the provisions of Paragraph 2 of Article 56 of the Trademark Law applied therein.
 
In determining the compensation sum, the people's court shall consider factors such as the nature, duration, and consequences of the infringement, the reputation of the trademark, the amount of the trademark license fee, the type, time, and scope of the trademark license, and the reasonable expenses incurred in inhibiting the infringement.
 
Where parties concerned reach an agreement on the compensation sum in accordance with Paragraph 1 of this Article, the people's court shall permit the same.
 
Article 17    Reasonable expenses incurred for inhibiting an infringement, as mentioned in Item (1) of Article 56 of the Trademark Law, shall include the reasonable expenses incurred by the right owner or an entrusted agent for the investigation and evidence collection on the infringement.
 
A people's court may, pursuant to the litigation claims of the party concerned and the particulars of the case, include attorney's fees that are in conformity with the provisions of the relevant departments of the State in the compensation.
 
Article 18    The statute of limitations for filing a lawsuit against infringement of the exclusive right to use a registered trademark shall be two years, commencing from the date on which the registrant of the trademark or an interested right owner becomes aware of or should be aware of the infringement.
 
If the time when the trademark registrant or the interested right owner files such a lawsuit is beyond the said two-year period, and the infringement continues to exist at the time when the lawsuit is filed, the relevant people's court shall, within the validity term of the exclusive right to use that registered trademark, rule to order the defendant to cease the infringement, in which case the commencement year for calculating the compensation sum for the damage caused by the infringement shall be two years prior to the filing of the lawsuit by the right owner with the people's court.
 
Article 19    Failure to submit a trademark license contract for record-filing shall not affect the validity of the license contract, unless otherwise agreed upon by the parties concerned.
Where a trademark license contract is not submitted to the Trademark Office for record-filing, opposition to a bona fide third party shall be prohibited.
 
Article 20    Assignment of a registered trademark shall not affect the validity of a contract for licensing that trademark which has come into effect before the assignment, unless otherwise stipulated in that trademark license contract.
 
Article 21    In the trial by a people's court of a case involving a dispute over the infringement of the exclusive right to use a registered trademark, with Article 134 of the General Principles of Civil Law, Article 53 of the Trademark Law, and the particulars of the case serving as the basis, the court may rule to subject the infringer to the civil liability of ceasing infringement, eliminating the obstruction, eliminating the danger, compensating for the losses, eliminating the impact, etc., and may also decide to subject the infringer to the civil sanction of the imposition of a fine and confiscation of the infringing goods, counterfeited labels for the trademark, and the materials, tools, equipment, and other funds and physical items specially used to manufacture the infringing goods.
 
The specific amount of a fine may be determined by referring to the relevant provisions of the Implementing Regulations for the "Trademark Law of the People's Republic of China".
Where an administrative department for industry and commerce has imposed an administrative penalty against an act of infringement of the exclusive right to use a registered trademark, a people's court shall not additionally impose civil sanction against the same act.
 
Article 22    In the trial by a people's court of a trademark dispute case, with the request of the party concerned and the particulars of the case serving as the basis, the court may, pursuant to the law, make a determination on whether the registered trademark is well-known.
Determination on whether a trademark is well-known shall be carried out pursuant to Article 14 of the Trademark Law.
 
Where a party concerned requests the protection of a well-known trademark that has been recognized by an administrative authority or people's court, and the other party concerned has no opposition as to the well-known status of the trademark involved, the relevant people's court shall not conduct any further examination.
 
Where an opposition is filed, the relevant people's court shall conduct an examination in accordance with Article 14 of the Trademark Law.
 
Article 23    The provisions of this Interpretation concerning commodity trademarks shall be applicable to service marks.
 
Article 24    In the case of any inconsistency between the previous relevant provisions and this Interpretation, this Interpretation shall prevail.