First Tort Law to protect trademark rights on the Internet

Beginning July 1 2010, the exclusive right to use a trademark in China will be regarded as a civil right and interest protected by the Tort Law of the People’s Republic of China. From the perspective of trademark owners, the promulgation of China’s first Tort Law does more than elevate the status of trademark rights; it also provides trademark owners with another means of combating trademark infringement in China’s largest marketplace - the Internet.

Under the current Chinese legislation (ie, the Regulation on the Protection of the Right to Network Dissemination of Information, and the Supreme People's Court's Interpretation of Several Issues Relating to the Application of Law to Disputes over Copyright on Computer Networks), if a Chinese network services provider (memory hosting services) is aware that one of its users is making copyright-infringing material available to the general public and fails to remove the infringing content from its memory housing, it shall be held jointly and severally liable for copyright infringement with the party offering the infringing material. Currently, there is no equivalent protection for trademark rights on the Internet.
Therefore, a practical strategy used by trademark owners to bring an end to the infringement of their trademarks by Chinese internet content providers is to assert the copyright subsisting in their trademarks. Network service providers will typically comply within a few days. However, this strategy has its limitations, as network services providers will usually be persuaded that copyright infringement has occurred only where the trademark used by the third party is identical, or almost identical, to the registered trademark.
If the trademark used by the third party is confusingly similar to a registered trademark, the trademark owner will be left with a cause of action based on trademark infringement or unfair competition. In these cases, a cease and desist letter is a typical first step in confronting the infringer. In practice, smaller companies trading on the goodwill of trademarks belonging to other parties tend to ignore warning letters, thus leaving trademark owners with limited options to bring an end to the infringing acts. A trademark owner may either:
In many cases, this can be a lengthy, costly and unpredictable process.
Pursuant to Article 36 of the new Tort Law, a network services provider will be held jointly and severally liable for the infringing acts of a website operator that uses its services if:
  • it is aware that the content provided by the website operator infringes a trademark belonging to another party; and
  • it does not remove the infringing content from its server.
By providing trademark owners with similar rights to those afforded to copyright owners against Chinese network services providers, China’s new Tort Law offers a simpler, more efficient way of fighting trademark infringement on the Internet.
George Chan, Rouse, Beijing

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