Trademark infringement refers to the illegal act of using an identical or similar trademark on identical or similar goods without the registrant's permission, or of committing statutory acts such as selling infringing goods or counterfeiting trademark labels, thereby infringing the exclusive right to use a registered trademark. Its statutory forms are enumerated in Article 57 of the Trademark Law, and its core tests are trademark use and likelihood of confusion.
Statutory Forms
Under Article 57, trademark infringement comprises seven categories: using an identical trademark on identical goods; using a similar trademark on identical goods, or an identical or similar trademark on similar goods, where confusion is likely to result; selling goods that infringe the exclusive right; counterfeiting or manufacturing registered trademark labels without authorization, or selling such labels; reverse passing off (replacing a registered trademark without permission before returning the goods to the market); contributory infringement (knowingly providing facilitation conditions for infringement); and a catch-all category covering other harmful conduct. Well-known trademarks may also receive cross-class protection under Article 13.
Elements of a Finding
- Subject matter: the accused goods or services fall within the approved scope of the registered trademark, or a similar scope;
- Trademark use: the sign is used as a trademark to identify source; legitimate descriptive or referential use does not constitute infringement (Article 59);
- Likelihood of confusion: except where identical marks are used on identical goods (where confusion may be presumed), all other cases require assessing whether the relevant public is likely to be confused about the source;
- Absence of permission and of any valid defense.
Legal Liability
- Civil liability: cease the infringement and compensate for losses. Damages are determined under Article 63 in a cascading order—actual losses, infringer's profits, or a multiple of the license fee—with statutory damages (up to RMB 5 million) as the fallback; where the infringement is malicious and serious, punitive damages of one to five times apply, together with reasonable enforcement expenses;
- Administrative liability: under Article 60, the market regulation authority may order the infringement to stop, confiscate and destroy the infringing goods and tools, and impose fines; the amount of damages may be mediated;
- Criminal liability: under Article 67 and the Criminal Law, counterfeiting registered trademarks, selling counterfeit goods, or illegally manufacturing labels, where serious, constitutes a crime punishable by up to ten years' imprisonment.
Principal Defenses
- Fair use defense (descriptive use, referential use, Article 59);
- Prior use defense (Article 59(3));
- Legitimate source defense: a seller who did not know the goods were infringing, obtained them legitimately, and identifies the supplier is exempt from damages (Article 64(2));
- Three-year non-use defense: where the rights holder has not used the mark for three years and suffered no other losses, the accused infringer is exempt from damages (Article 64(1));
- Exhaustion of rights: resale of genuine goods after the rights holder has placed them on the market does not constitute infringement.
Distinction from Adjacent Concepts
Trademark infringement targets the exclusive right in a registered trademark; squatting and similar applications are matters of grant and validity, handled through opposition and invalidation procedures; the crime of counterfeiting registered trademarks is the criminal form of serious infringement. Understanding this system helps rights holders enforce rights at different levels and accused parties mount layered defenses.
How these concepts apply in a specific case still varies in detail; you may consult a filed trademark agent on MyTMBee for case-specific analysis.