How Can A Company Deal With Counterfeit Products in China?
Consumers and manufacturers are facing a growing problem of counterfeits in China. Counterfeits not only deceives consumers but also threaten brand manufactures. It leads to sales decrease, reputation damage, market chaos for brand manufactures. This article will offer some legal strategies for manufacturers to combat counterfeits and protect their own products.
1. Registering Trademark and Patent is The First Step
- Trademark
A trademark is a distinctive word, graphics, logo, letters, three-dimensional sign, numbers, color combinations and sounds that is used to identify a particular product or service and which serves to distinguish it from its competitors.
In China, trademarks are generally protected through registration, following an application filed with the Trademark Office of China National Intellectual Property Administration (Online Application Website: https://sbj.cnipa.gov.cn/sbj/wssq/).
Registration entitles the registrant to legally and exclusively own all the trademark rights, and to prevent anyone from using the trademark on the same or similar products without the registrant’s consent. Otherwise, the infringer will be liable for unauthorized use (compensation, penalties, etc).
- Patent
A patent is an exclusive right granted for an invention, utility model or appearance design. It refers to a new technical solution or a practical design for a product, process, or improvement thereof.
Same as trademark, registering a patent in the Patent Office of China National Intellectual Property Administration (Online Application Website: https://cponline.cnipa.gov.cn/), confers exclusive rights on the Patentee. In other words, once the patent granted, the Patentee can stop anyone from making, using, selling, offering for sell, or importing the product or technology in which the patents are held.
2. Preserving Evidence Will Give Your Company an Edge
When counterfeits are discovered on the market, the most urgent step is to preserve and notarize the evidence in order to avoid the infringer destroying the counterfeits before we take legal action.
In this case, you can buy the counterfeit products under the witness of a notary and with a video recording of the whole process, and keep the counterfeit product, contract or purchase order, invoice, payment slip. The final notarial certificate can be used as evidence.
3. Complaints to the Market Supervisory Administration are the Most Time-saving and Cost-effective Way
Market Supervisory Administration is the official authority that regulates protection and infringement of intellectual property. When counterfeits are found, anyone can report them to the local Market Supervisory Administration through the hotline number 12315 or the official website: https://www.12315.cn/ for complaints.
Once the infringement is recognized by the Market Supervisory Administration, the infringer will be required to immediately stop the infringements, destroy all counterfeits and pay a fine. In the case of a serious infringement, a criminal penalty (a fixed-term imprisonment) might also be imposed on the infringer.
4. Filing a Lawsuit is Also the Most effective Way
Irrespective of the penalty imposed on the infringer, it is vital for the brand manufacturer to make up for the loss of revenue and reputation resulting from the infringement. If the infringer refuses to pay any compensation, the brand manufacturer will have to file a lawsuit in Intellectual Property Court.
- How much compensation can the infringed party claim for?
(1) Either the actual losses suffered by the infringed party or the actual interests obtained by the infringer as a result of the infringement.
(2) If neither the actual losses nor interests can be determined, the compensation shall be the reasonable multiplier of the royalty of the trademark or patent.
(3) If the infringement is intentional and serious, the compensation may be determined at not less than double and not more than five times the amount determined in accordance with the above method.
(4) The compensation may also include reasonable expenses incurred in preventing infringements, such as notarization fee, certification fee, lawyer’s fee, investigation fee, translation fee, etc.
5. Other Simple Strategies for Counterfeits
- Complain to the e-commerce platform where the counterfeits are sold:
Many well-known e-commerce platforms have set up an intellectual property protection and complaint channel. The Intellectual Property Protection Platform of Alibaba is one of such channel, which aims to provide a channel for complaints and resolution of IP disputes.
- Adopt anti-counterfeiting measures:
In a nutshell, anti-counterfeiting is the application of covert or overt protection measures on packaging, authentication certificates, or directly on the products themselves. These measures often include technology to track, trace, and verify the authenticity of an item. With anti-counterfeiting measures in place, the consumers can distinguish the counterfeits and counterfeiters won’t be able to trick consumers into believing that items are authentic.
If you need more information about how to deal with the counterfeit products in China, please feel free to contact us.
Saway Wang
Email: sawaywang@billionslawyer.com
Tel/Whatsapp: +86 18017682422
