29 June 2022TrademarksHaiyu Li

Trademark pirates begin to pay the price in China

Consequently, trademark piracy became highly profitable and rampant. Some legitimate owners have been forced to suspend business and spend substantial resources and time on initiating oppositions, cancellations, invalidations, even lawsuits, but at very low rates of success. Many others make concessions by paying for loyalties or buying back the pirated trademarks.

In recent years, China revised its trademark law, particularly aimed at trademark piracy. In addition, the administrative authorities also released many regulations to prevent pirates from abusing their pirated rights, putting many on the blacklist and punishing a large number of pirates and their representing trademark agencies. The rate of the legitimate owners’ success has gone up substantially.

As a result, the trend has begun to change for the better, and it has become increasingly difficult to profit from piracy. What is more, in late 2021 and early 2022, the Chinese courts further progressed by making a few rulings to order the pirates to compensate the legitimate owners’ expense on the initiated legal actions. This is a good sign that the pirates have begun to lose money for their acts and that the legitimate owners may possibly recover their expenses.

In this article, I would like to introduce a recent case where the Chinese courts improved their practices to protect the legitimate owners’ lawful rights and interests.

Case in brief

The first-instance court ruled that Shenzhen Teyou Technology Co., LTD.’s (“defendant A”) trademark pirating acts have disturbed the market competition order, harmed the lawful rights and interests of the plaintiff, Shanghai Fanrong Network Technology Co., LTD., and constituted unfair competition.

The other two defendants were a couple of husband and wife who operate defendant A, but were not adjudicated as liable for the infringing company act. Defendant A appealed, but the Intermediate People’s Court of Shenzhen sustained the first-instance ruling in its final judgment.

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