Appreciation and Application of the Supreme People’s Court Notice on the Proper Venue for Well-known Trademark Cases

Issue 30 By Wang Yanfang,[Trademark]

On May 1, 2009, the Supreme People’s Court issued its Notice on the Proper Venue for Well-known Trademark Cases (the “Notice”), which specifically directs that, as of that date, the venue of all civil disputes involving well-known trademarks be assigned to either:  1) intermediary courts of cities where provincial or autonomous-region governments are seated, or 2) intermediary courts of cities with independent state planning status, or 3) intermediary courts within the territory of municipalities directly under the central government. Intermediary courts other than those described above may not entertain such civil disputes, unless approved by the Supreme People’s Court. This article is a brief report on how the Notice was formulated and some points regarding its application.

I. The background of the Notice

1. Venues for civil disputes involving well-known trademarks before the Notice was issued

During its 1,023rd session on December 25, 2001, the Adjudicatory Commission promulgated the Supreme People’s Court’s Interpretation on the Issues of the Proper Venue and Scope of Application for Civil Trademark Disputes (the “Interpretation”), which provides in paragraph 3, article 2 that “the trial of civil trademark cases shall be conducted in an intermediary or higher people’s court,” and, in paragraph 4, provides that “one or two district courts in larger cities may be designated for such trials by the high courts within their jurisdiction upon approval from the Supreme People’s Court.” Accordingly, most civil disputes involving well-known trademarks were handled by intermediary courts, with some exceptions in larger cities such as Beijing or Shanghai, considering that a significant number of cases are heard in the district courts which have accumulated some experience, indicating proper venue in those courts, that authorities are delegated to the high courts for designating one or two district court as proper venue for civil trademark disputes. Thus, the Interpretation permitted over 400 intermediary courts nationwide, as well as some district courts, to entertain civil disputes involving well-known trademarks

2. The need to adjust this venue in light of recent abuses involving the well-known status for trademarks

Judicial recognition of a trademark as “well-known” is used to ascertain the scope of its exclusive right and the extent to which it deserves protection by establishing the fact, during judicial proceedings, that the mark carries a certain strength during a given period of time. In judicial practice, such recognition is necessary only when finding trademark infringement or unfair competition. Moreover, in order to prevent litigants from merely seeking such judicial recognition for other uses or unfair gain, a rule based on need has always been followed in judicial practice, stressing the necessity and limiting strictly the extension of such judicial recognition. For this reason, clear standards and rules exist for the judicial recognition of famous marks to protect such exclusive rights. This well-known status does not accord the mark an honorable title, nor is it an advertising label for the trademark owner. In reality, however, the recognition of a well-known mark has been misunderstood by certain businesses which, in the pursuit of improper economic gains, use it as a shortcut to obtain preferential treatment from the government, to gain public favor, or to beat the competition. Not infrequently, the well-known status of a famous mark is deified or abused, to the extent that more meaning is attached to such marks than their commercial value under the law. These practices have also found their way into the courts by encouraging litigation or the forging of court documents to recognize well-known marks, which explains the surge of trademark caseloads involving well-known trademarks.

On the other hand, while the Supreme People’s Court has attached great importance to supervising and guiding the judiciary in well-known trademark recognition and has stressed the rules time and again, the reality of judicial practice has seen an imbalance in regional economic development and experience between competent intermediate courts and grass-root courts. Also, statutory standards cannot be very specific and may be understood quite flexibly in reality which, objectively speaking, can easily lead to different measurements in enforcement. The above factors are combined to cause some local courts to hear and try famous trademark-related civil dispute cases by applying different enforcement standards. In order to solve the key problems that exist with these Famous Trademark findings, such as creating unified judicial measurements as much as practicable and correcting non-conforming conduct, these prior judicial practices have to be adjusted to bring Famous Trade-related civil dispute cases under a centralized jurisdiction. In sum, given China’s status quo, centralized jurisdiction is more suitable and facilitates supervision and guidance over such cases by high courts and the Supreme People’s Court.

3. After listening to recommendations from all sides, the Notice was published early to prepare for the unveiling of the judicial interpretation of Famous Trademark findings.

On November 11, 2008, the Supreme People’s Court published the Interpretation on Law Application Issues in Finding and Protecting Famous Trademark in the Adjudication of Trademark Infringement Civil Cases (the draft-for-comment version) and publicly solicited recommendations from society on this draft until December 12, 2008. To make a Famous Trademark finding, the draft provided two options: one is to keep the status quo in which jurisdiction resides with the intermediate courts and some of the grass-root courts; the other is to change the current jurisdiction to a more centralized jurisdiction. Most of the respondents commenting on the Interpretation supported centralized jurisdiction, and some went even further to suggest increasing the jurisdictional level and setting the high courts as the first instance courts. Based on its research, investigations and solicitations from a wide range of sources, the Supreme People’s Court adopted the proposed centralized jurisdiction for finding a Famous Trademark. Since a further period is required before the judicial interpretation will become effective, the Supreme People’s Court decided to issue the Notice and bring the relevant cases under centralized jurisdiction in advance in order to provide an earnest solution to various practical problems.

II. Points to note in the Notice’s application

So far, no other intermediary courts have been designated by the Supreme People’s Court as a proper venue for the trying of first-instance civil disputes involving a well-known trademark, except those listed in the Notice. That is, after January 5, 2009, only those intermediary courts named in the Notice in cities where the provincial or autonomous-region governments are seated, or intermediary courts in cities with independent state planning status, or intermediary courts in the territory of municipalities directly under the central government are the proper venue for such disputes. After the Notice, other courts will no longer be the venue for cases involving the judicial recognition of well-known trademarks. Those pending cases filed before the Notice that have not yet been concluded by such courts will not be transferred to other venues. However, venue will be changed for cases filed after the Notice and will be transferred to the proper venue as designated by the appropriate high court.

About the author:
Wang Yanfang is a Judge at the Intellectual Property Division of the Supreme People’s Court.

(Translated by Ren Qingtao)

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