Speed in implementation of trademark strategy in China

By Frank Liu, Tiantai Law Firm
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When establishing trademark rights and protection in China, the formulation of a strategy in keeping with the enterprise’s actual circumstances is of great importance. Numerous factors need to be considered when implementing a trademark strategy. These include the types of action to take, the timing and speed of the actions, among others. This column looks at speed in implementing a trademark strategy.

刘建强 FRANK LIU 天驰君泰律师事务所 合伙人 Partner Tiantai Law Firm
FRANK LIU
Partner
Tiantai Law Firm

Speed in formulating a strategy. Everyone knows that there is a certain particularity in trademark pirating and infringement in China. Any hesitation in formulating a strategy translates to a delay, which is likely to cause squandering of the opportune time, giving rise to the trademark being pirated or the loss or destruction of the evidence of infringement. Subsequently, a great deal of time, energy and money are exhausted in handling a trademark administrative procedure or lawsuit. Accordingly, when establishing trademark rights and protection in China, it is necessary to formulate the requisite strategy as soon as possible so that the enterprise’s interests will be protected to the greatest extent, though the arrangement of such specific measures as actions, evidence collection, etc. may require some time for proper consideration.

Speed in adjusting the strategy. Once a new circumstance arises, speed is needed when adjusting the strategy. The new circumstance usually involves the other party taking a certain measure or the enterprise discovering evidence that has a material impact on the case. Accordingly, a timely response can be mounted only with a rapid reaction.

Speed in feedback. Regardless of whether an enterprise handles the establishment and protection of trademark rights internally or engages external counsel to do so, the speed of feedback is also vital. In practice, many cases that originally could have been resolved through consultations ultimately escalate to litigation because feedback was not timely enough, resulting in the enterprise eventually spending much more money and a great deal of time and energy.

In some crackdowns against infringers for counterfeiting, when a decision to take action is finally made, it is impossible to find the original infringement target because the enterprise’s internal feedback period is too long, resulting in failure. In contrast, rapid feedback will usually enhance the rate of success of an action. Furthermore, we have also dealt with some crises in which the conflicts were originally quite intense, but, because the solution was apt and enterprise feedback timely, we were able to resolve a significant number of such crises through timely discussions.

Controlling the speed of action. Establishing a comprehensive trademark right and protection strategy usually requires different types of actions with varying severities. These actions are mutually reinforcing and arranged in an orderly manner within the strategy system. However, once it is determined that a certain action needs be taken, e.g., a crackdown on counterfeits or a legal move, then speed of its execution is of utmost importance. Furthermore, once proposed, such an action need not always be taken all the way to the limit, but should be timely adjusted as called for under the strategy, e.g., suspending or withdrawing a certain action, as, only in this way, can the overall implementation of the strategy be appropriately coordinated and the interests of the enterprise safeguarded to the maximum extent. Furthermore, it may be necessary to take and complete a certain action in the interval between two courses. Under such a circumstance, control of the speed of the action is of utmost importance. If the action is taken too early or too late, it could have an adverse impact on the overall strategy.

What does “Speed” mean?

When talking about “speed”, many may feel it means the faster the better. However, based on practice, we argue that only by melding the speed of an action into establishing the trademark right and protection strategy system, as well as coordinating the arrangement, can the most favourable effect be achieved. In most circumstances, speed does needs to be there, but the precondition is that sufficient preparations must be made before the action. For example, before a lawyer’s letter is sent to an infringer, we generally recommend securing the evidence to the greatest possible extent, particularly in relation to infringement found online; if the securing of such evidence has not been duly carried out before issuing the lawyer’s letter and the other party deletes the evidence of infringement, this will, on the one hand, have a relatively major impact on any possible future legal action. In certain circumstances, it may give rise to the risk of the other party claiming infringement of its good name.

In the face of relatively complex instances of infringement or a relatively large infringement target, not only is it usually necessary to clear the infringing products from the market, but it is additionally necessary to pursue the wholesalers and producers behind these. If action is taken immediately on discovery of the odd retail store in the market, the speed may seem fast and the effectiveness high, but it could very well sound the alert, making action to track and crack down on the wholesalers and producers of infringing products, which genuinely have a relatively huge impact on the business of the enterprise, more difficult or even fail. Ultimately, this negates the worth of any gain.

Furthermore, when various actions are mutually reinforcing, the timing of each action also needs to be duly coordinated in order to control the progress of the entire strategy and avoid a situation where it is affected due to an action that is lagging. Accordingly, it is necessary to control the coordination of the speed of these actions, going fast or reining in the same when necessary. Only in this way can establishing a trademark right and protection strategy play its actual role much better.

In short, only from an in-depth understanding of the types of speed in establishing a trademark right and protection strategy, as well as factors that need to be considered in the implementation of the same, can speed be effectively mastered. Furthermore, speed is only one of the factors in establishing a trademark right and protection strategy. It also needs to be organically integrated with other factors, such as the direction, timing and intensity of the actions, as this is the only way it can ultimately play its proper role in the effective implementation of a trademark right and protection strategy.

Frank Liu is a partner at Tiantai Law Firm in Shanghai

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