What has been one of your biggest achievements of the past year?
Last year was truly tough. As the pandemic swept across the globe, many international clients froze their budgets for IP enforcement. Nonetheless, it is heartening to know that, against all the odds, everyone at the firm worked closely together. I made sure that no one was laid off, that everyone continued to receive the same paycheck as before and that all employees and their families were safe. Ensuring stability for our team members has been, I believe, one of our best achievements of the past year.
How has your IP practice changed in response to the pandemic?
Our firm is well known for landlord liability actions with regard to trademark infringement, an area in which we have specialised for over 15 years. Covid-19 has changed all that as brick-and-mortar stores were generally closed during the pandemic. And even as life in China is beginning to return to normality, the pandemic had indelibly changed consumer habits. As a result of lockdowns and health scares, Chinese consumers have become more accustomed than ever to purchasing goods online. Counterfeiters have also shifted their operations online, posing new legal challenges of their own.
In response, our firm is vigilantly taking the lead in combatting online infringement and protecting brand owners’ rights amid the ‘new normal’. Some international luxury brands have engaged us to file lawsuits against online infringers on a full or partial contingency basis. This approach is a win-win for both the brand owner and our firm.
What are the top three skills that you need to succeed in the courtroom?
First, you must know and analyse the latest decisions issued by the Supreme People’s Court and the provincial courts in similar cases, in order to cite these as precedents to support your arguments.
Second, know your judge. By that I mean you should familiarise yourself with how the court before which you will appear has ruled on similar cases in the past. For example, try to determine whether the judge is likely to pay attention to the intricate details of the case or simply focus on the main points of your arguments, and draft your pleadings and arguments accordingly.
Finally, always address legal issues directly, rather than circling around them, while presenting your arguments concisely and logically. Should the adverse party utter a wrong or misleading statement, you must immediately move to clarify it.
The Chinese authorities have made clear their intentions to continue strengthening IP protection in the region. How is the IP regime improving?
A major improvement has been the introduction of punitive damages for IP infringement in the recent amendments to the Trademark Law and the newly enacted Civil Code, which the courts have begun to impose. Brand owners are therefore encouraged to collect evidence of bad faith or malicious intent to commit IP infringement (eg, being a repeat offender or a prior criminal record) to trigger the application of punitive damages.
What emerging trends/technologies are having the biggest impact on your clients’ trademark protection strategies?
With the rapid acceleration of the digital economy, which was further hastened by the pandemic, thousands of counterfeiters have set up shop on various Chinese e-commerce platforms. Brand owners should hire specialists to remove links to, and take down, infringing websites. For bigger targets, they should take civil and criminal action. Whether the e-commerce platform is cooperative with the brand owner will be key to success. Chinese authorities or e-commerce platform owners can be lax with infringers, reasoning that the ‘stability of society’ is more important during the pandemic.
Even where legal action is taken, the damages awarded may not be as big as expected. Although punitive damages are provided under law, in reality, judges will often seek to balance the parties’ interests and temper the law’s application in line with the times. Thus, while, on the one hand, brand owners should seek the imposition of punitive damages against offenders, on the other hand, they should not be too stern if the infringer looks to settle. As for the amount of damages to claim, we likely need to be more flexible given the circumstances. It is best to set goals for compensation: the first is to get the court to impose punitive damages; the second is to enter into a settlement, in which case the brand owner will have to be a bit more flexible.
James Luo is managing partner at Lawjay Partners and an arbitrator at WIPO and the Chinese European Arbitration Center. He has over 25 years of IP experience, is currently ranked by the WTR 1000 and Legalband as a Band 1 IP litigator, and is hailed among China’s top IP lawyers. He obtained his PhD in intellectual property at Renmin University of China and his LLM in intellectual property at King’s College London. Dr Luo was a visiting scholar at the University of London. An established authority in IP litigation and enforcement, he is counsel of choice for some of the world’s most famous brands.