How to Document trademark infringement in China

A large amount of documentation must be collected to successfully enforce trademark rights in China. While China is a TRIPS Agreement signatory, entitling other countries to prove IP violations there, its administrative regulations specify many obstacles to obtaining that enforcement by creating a maze for litigants in procedural law. Chief among these is the stringent requirements for documenting trademark infringement, which has led to many high-profile cases of international brands failing to effectively enforce their rights in China.  In this article, we’ll go over these heightened burden of proof rules, looking at what facts need to be proved, which documents need to be presented to court, and special challenges around proving damages.

Contents

What kinds of facts need to be proved

What Documents Need to be Produced

Documenting Amount of Damages

What Kinds of Facts Need to be Proved for a Trademark Claim in China

Chinese intellectual property law provides for what kinds of facts must be proved in order to bring a trademark infringement claim. In this section, we will learn what kinds of facts are required, and in the following section go over the specific documents.

The China Trademark Act §63 provides the general rules on methods for determining trademark damages, weighing profits and losses, and equivalent licensing value. More rules are provided under the Trademark Administrative Regulations, wherein the plaintiff has the burden of proof as to the following facts:

• Identity of the infringing party
• Method of infringement
• Goods or services involved in the infringement
• Time and place of infringement

If the Administrative Regulations requirements are not satisfied, judges in China frequently reject trademark enforcement actions due to insufficient evidence. After the basic infringement details are shown, the burden of proof shifts to the defendant to rebut the claims.

Similar rules apply to China’s more recent protection for unregistered trademarks. Owners of unregistered brands can enforce trademark rights in China by proving priority though prior business activities. The judge must be persuaded that the evidence sufficiently shows the existence of trademark rights, that infringement occurred, and the amount of loss caused.

Infringement victims need to be aware of what kind of evidence can be used to prove trademark infringement in China. Trademark infringement under Trademark Act §57 includes the unauthorized use, sale, counterfeit, or aiding and abetting such activities. When a judge reviews a claim for trademark infringement, the following materials are typically required:

• Proof of registration or of prior rights in an unregistered trademark (See government guidance translated to English here)
• Specimens demonstrating use by the trademark owner
• Specimens demonstrating use of the infringing mark
• Proof of purchase of the infringing products (such as tax receipts)
• Specimens of infringing product trade dress
• Evidence of shipping or transporting of infringing goods (some evidence may need to be obtained through PRC Customs, see our article here for specifics)

A defendant may defeat attempts at enforcement in China by introducing evidence of a trademark registration cancellation, license contract, or assignment.

What Documents Need to be Produced to achieve Trademark Enforcement

Below, we will go over the specific documents that need to be found and introduced to enforce a claim for trademark infringement.

Identifying both the infringer and trademark owner is essential, and necessitates an investigation into identification documents such as business licenses, operating addresses, infringer’s operating permits, and identifying codes. As noted below, this step is where infringers will focus their circumvention efforts, since they can often hide their true identities behind proxies.

The plaintiff will need to show that they own the trademark, ideally by presenting a trademark registration filed within China, or a license agreement or other grant of those rights. Specific documents to search for here are registration certificates, license contracts, assignment recordals, and, in some cases, inheritance or community marital property division documents. Circumvention techniques around ownership are also powerful, resulting in even sophisticated global companies like New Balance struggling with trademark enforcement due to squatters.

Take photos of infringing products and the tax receipts. In China, tax receipts are registered with the government tax office and can trace products directly to infringing parties. Take photos and screenshots of promotional materials too. Specifically, looking at local Chinese platforms like Tmall and Taobao.

You can also place an order these platforms yourself, requesting a tax receipt to establish a chain of evidence that leads to a specific infringer. The entity’s business certificate, obtainable via the ecommerce platform, will also list a statutory representative directly on its face. Statutory representatives in China must be an individual and not another entity, allowing you to impose personal liability on any infringers of your trademark under both veil piercing doctrines and criminal trademark liability (covered in an article here) too. All of these documents should demonstrate that the defendant actively acted to infringe upon on your trademark rights.

Documenting Amount of Damages

Damages can be calculated by looking at the infringing goods’ sales volumes on Chinese ecommerce apps, such as the ones run by Alibaba, and estimating the profit per sale. For example, these August 2024 images from TMall show a local Chinese company, AO SDAES (USA), using the same color, appearance, keywords, and lettering as AO SMITH (USA). The company also has a shell corporation in the USA, used to establish a fictional American identity for its China business registration. The following brand comparison was taken from Tmall in September 2024:

As can be seen, a swarm of front companies using the “AO” letters and similar coloring and design layouts are operating on Tmall.

AO SMITH previously succeeded in enforcing its trademark rights against counterfeiting ring’s company, “AO SIMTH,” which was subsequently taken down. Given the emergence of new copycats, however, enforcement might be better achieved by obtaining substantial damages, by making a claim for the copycats to disgorge unlawful profits.

In some cases, illegal sales cannot be proven. For instance, transactions in a criminal case involving counterfeit Hewlett Packard (HP) products were very much under the table. Despite police seizing entire shipping containers filled with counterfeit HP products, there was no ecommerce platform sales data available. In those cases, judges can look at this and other qualitative evidence and can only impose a maximum RMB5 million in damages. (see related article)

Under China Civil Procedure Act §69, Government notary agencies may be used to establish a presumption that the evidence is established. In trademark cases, the government can forensically analyze ecommerce platform to certify the truth of the infringement. This approach differs significantly from the United States, where notary publics are individuals whose verification of matters put before them is primarily subject to oath, and do not have such expansive authority to certify to the truth of a trademark infringement.

You can also request enforcement of your rights through China’s trademark trial and appeal board. Filing an administrative complaint with the local intellectual property regulator is permitted by China Trademark Act §60. A filed complaint must also include identifying documents, such as a certificate of formation, proof of trademark ownership, and details of the infringement. If the complaint is credible, the administrative agency is empowered to conduct its own investigation using law enforcement officers to inspect documents, take photographs, and record video.

If they believe infringement may have occurred, the administrative agency may seize or sequester the infringing products behind police tape, and retrieve specimens for further analysis and production of evidence.

Getting a litigation hold to preserve evidence can help ensure enforcement efforts are not frustrated. Under the applicable China Supreme Court Interpretation, a trademark owner may petition the court for an injunction to cease and desist the infringement, or for a preservation order for the relevant evidence, which must be filed with the court of competent jurisdiction. Doing so will start a countdown to a statutory deadline for you to file a lawsuit against the infringer; if no lawsuit is filed, the preservation order will be lifted and you will be held liable for any damages caused to the alleged infringer.

Conclusion

While Chinese lawmakers have established a strict system to protect trademarks over the last few years, evidence rules and requirements still make enforcement very difficult. Therefore, an extensive investigation into the specific items of evidence necessary to prove trademark infringement, as described in this article, is essential for prevailing against trademark infringers and counterfeiters in China. Additionally, we covered how counterfeiting rings use front companies as a circumvention tactic, exploit the rules of evidence to shift liability for their crimes to assetless shell companies.

FURTHER READING

Get authoritative insights about Chinese foreign investment law from official government guidance in translation:

• Getting China’s regulators to stop trademark infringement
• How China trademark infringement litigation actually works

For a general overview of this topic, see also CBL’s China Trademark Law FAQ.