China’s State Administration for Market Regulation Releases the Top 10 Typical Cases of Intellectual Property Enforcement in 2023

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On May 10, 2024, China’s State Administration for Market Regulation (SAMR) released the top ten typical cases of intellectual property enforcement in 2023.  Administration enforcement via the SAMR provides an alternative route for IP enforcement in China. While damages are not available, injunctions and significant fines are.  Further, cases can be referred to the procuratorate for criminal prosecution if warranted. Per the SAMR, local bureaus in 2023 “severely cracked down on trademark infringement, counterfeit patents, malicious applications for trademark registration, and illegal trademark and patent agency activities.”

As explained by SAMR:

1. The Market Supervision Bureau of Haining City, Zhejiang Province investigated and dealt with the case of Sun XX and others producing and selling counterfeit well-known brand automotive glass

The Market Supervision Bureau of Haining City, Zhejiang Province investigated and dealt with the illegal activities of Sun XX and others in producing and selling counterfeit well-known brand automotive glass in accordance with the law, involving a total amount of more than 200 million RMB. The behavior of the parties concerned is suspected of constituting a crime, and the case has been transferred to the public security organs for processing.

In October 2023, the Haining Municipal Market Supervision Bureau received clues that there were illegal production and sales of well-known brand automotive glass in its jurisdiction. The Haining Municipal Market Supervision Bureau immediately carried out joint law enforcement inspections with the public security organs on sites suspected of illegal activities, and seized 6,191 pieces of counterfeit car glass that infringed the trademarks of well-known brands such as BMW, Mercedes-Benz and Honda on site, and more than 200,000 pieces of glass that had not yet been printed with a trademark. After investigation, the gang involved in the case has purchased automobile glass from ordinary glass manufacturers without the permission of the registered trademark owner since 2018, and printed the trademarks of BMW, Mercedes-Benz, Honda, Volkswagen, Toyota, General Motors, Ford, Mazda, Fiat, Land Rover, Lexus, Jaguar and other brands and were later sold to Zhejiang, Jiangsu, Shandong, Henan, Hubei, Hunan and other places, involving more than 200 million RMB. The behavior of the parties constitutes an illegal situation stipulated in Article 57 (3) of the Trademark Law of the People’s Republic of China. At present, the public security organs have arrested 9 people and detained 26 people.

The parties involved in this case have a strong sense of counterreconnaissance. The products involved are of various types, quantities and amounts, making it difficult to conduct on-site investigation and evidence collection. The market supervision department, in conjunction with the public security organs, comprehensively collected illegal and criminal evidence through careful planning, in-depth excavation, and mutual cooperation, ensuring the smooth investigation and handling of the case and effectively protecting the exclusive rights of registered trademarks of many well-known automobile brands.

2. The Market Supervision Bureau of Dongtai City, Jiangsu Province investigated and dealt with the illegal production and sale of counterfeit cosmetics by Liu and others

On April 1, 2023, the Market Supervision Bureau of Dongtai City, Jiangsu Province investigated and punished Liu and others for illegally manufacturing and selling counterfeit cosmetics in accordance with the law. The value of the goods involved was 103 million RMB. The behavior of the parties concerned is suspected of constituting a crime, and the case has been transferred to the public security organs for processing.

On March 31, 2023, the Dongtai City Market Supervision Bureau received a report that cosmetics were manufactured and sold in a private house. Immediately, law enforcement officers carried out law enforcement inspections and seized 384,600 counterfeit packaging boxes, bottles and other packaging materials of cosmetics brands such as “L’Oreal”, “馥蕾诗”, “Lancome” and “Olay” on site, 17,300 packaged cosmetics, and more than 20 counterfeiting equipment such as pneumatic liquid filling machines, laser inkjet printers, assembly line conveyors, hot stamping machines, and constant temperature heating tables, and 9.6 tons of unfilled production raw materials. After investigation, since June 2022, Liu and Lian have recruited workers to illegally produce counterfeit cosmetics, repackage the cosmetics themselves, and then sell the finished products to offline customers, and sell them to consumers at prices close to genuine products through purchasing agents, live broadcasts, etc. The value of the goods involved was as high as 103 million RMB. The Dongtai City Market Supervision Bureau and the public security agency jointly took action. After more than three months of efforts, they destroyed 3 production sites, 2 sales sites, and eliminated illegal manufacturing and sales of cosmetics across 5 provinces and 8 cities including Shanghai, Guangdong, and Zhejiang and the Internet. 17 suspects were arrested.

This case involved many people and a wide range of areas, and the production and sale of counterfeit goods formed an “industrial” chain. The market supervision department and the public security agency immediately set up a task force to discuss and evaluate the case, formulate an action plan, and implement a precise attack. The investigation of this case demonstrated the determination and confidence of the market regulatory authorities to severely crack down on infringement and counterfeiting, deterred illegal and criminal activities, and maintained the market order of fair competition.

3. The Market Supervision Bureau of Nanning City, Guangxi Zhuang Autonomous Region investigated and dealt with the case of Riyuequan Tea Shop in Nanning City selling tea that infringed the exclusive rights of the registered trademark “China Tea”

On March 6, 2023, the Nanning Municipal Market Supervision Bureau of the Guangxi Zhuang Autonomous Region investigated and dealt with the illegal behavior of Riyuequan Tea Shop in Nanning City by selling tea that infringed the exclusive rights of the “China Tea” registered trademark. The amount involved was more than 90 million RMB. The behavior of the parties concerned is suspected of constituting a crime, and the case has been transferred to the public security organs for handling. 

On March 6, 2023, based on evidence provided by consumers, law enforcement officers from the Nanning Municipal Market Supervision Bureau conducted a law enforcement inspection of the Riyuequan Tea Shop in Nanning City. On-site, they found a large number of products marked with the “China Tea” logo and “China Local Products and Livestock Products” in the store. Pu’er tea with the words “Import and Export Company Yunnan Tea Branch”, and some “Chinese Tea” Pu’er teas are also labeled with the words “80s”. The trademark owner identified the above-mentioned goods as infringing goods, with a value of 5 million RMB. Because the party involved had a large illegal business volume and was suspected of committing a crime, the Nanning Municipal Market Supervision Bureau transferred the case to the public security organs for handling in accordance with the law. According to the execution linkage working mechanism signed by the two departments, it cooperated with the public security organs to trace the production and sale of counterfeit sources that carried out infringement and counterfeiting activities.  A total of 11 people were arrested in this case, and 15,074 compressed discs (pieces) of counterfeit “China Tea” registered trademark tea were seized, with a value of more than 90 million RMB.

This case is a typical case of cracking down on illegal and criminal activities across the entire chain. The market supervision department has worked closely with the public security organs to promptly activate the execution linkage working mechanism and coordinate cross-regional operations to form a joint force to effectively investigate and deal with illegal activities of manufacturing and selling counterfeit goods, thus protecting the legitimate rights and interests of rights holders.  

4. Tianjin Beichen District Market Supervision Bureau investigated and dealt with the case of infringement of the exclusive rights of the registered trademarks “DENSO” and “TOYOTA” by Tianjin Beijiang Light Vehicle Technology Co., Ltd.

On July 13, 2023, the Tianjin Beichen District Market Supervision Bureau, in conjunction with the public security organs, found 1,100 “DENSO” brand ignitions produced by Tianjin Beijiang Light Vehicle Technology Co., Ltd. in a vehicle parked in the jurisdiction. The product has been identified as an infringing product by the trademark owner. On the same day, law enforcement officers conducted a law enforcement inspection at the company’s residence in Wuqing District, Tianjin, and found that the party involved was processing and producing 54,000 “DENSO” and “TOYOTA” brand ignitions. The above-mentioned goods were identified by the trademark owner as infringing products, with a value of approximately 17.175 million RMB. The behavior of the parties is suspected of constituting an illegal act as stipulated in Article 57 (1) of the Trademark Law of the People’s Republic of China and therefore the Beichen District Market Supervision Bureau transferred the case to the public security organs for handling in accordance with the law.

Ignitions are one of the key components of automobile engine. In this case, the market supervision department gave full play to the role of execution connection and cross-regional case handling mechanism. Based on the case evidence discovered in the jurisdiction, they followed the evidence and cooperated with the public security organs to successfully destroy the parties’ counterfeiting locations, effectively cracked down on illegal and criminal acts of trademark infringement, effectively purified the market environment, and effectively safeguard the safety of consumers’ lives and property.

5. The Market Supervision Bureau of Lichuan City, Hubei Province investigated and dealt with the case of Yang XX and others selling counterfeit products with the registered trademark “FION”

On June 19, 2023, the Market Supervision Bureau of Lichuan City, Hubei Province investigated and dealt with the illegal behavior of Yang XX and others in selling products counterfeiting the “FION” registered trademark in accordance with the law. The behavior of the parties concerned is suspected of constituting a crime, and the case has been transferred to the public security organs for handling. 

On May 15, 2023, based on the clues of the case, the Lichuan Municipal Market Supervision Bureau and the public security organs conducted a law enforcement inspection of the residence of the parties involved, and a large number of “FION” bags were found on the scene. The trademark owner identified the above-mentioned goods as counterfeit goods. After investigation, it was determined that the parties involved began selling counterfeit “FION” bags through the online platform in November 2022. As of the incident, more than 1,000 units had been sold, 4,524 units had not been sold, and the value of the goods reached more than 6 million RMB. The behavior of the party concerned violated the provisions of Article 57 of the Trademark Law of the People’s Republic of China and was suspected of constituting a crime. The Lichuan Municipal Market Supervision Bureau transferred the case to the public security organs for handling in accordance with the law. 

This case is a typical case of selling infringing and counterfeit goods through the Internet. With the rapid development of Internet technology, online infringement and counterfeiting cases have become increasingly complex. Some counterfeiters have used order production, separate production of goods labels, social marketing and other means to break up their products into parts to avoid crackdowns. In this case, the market supervision department and the public security agency worked closely together, giving full play to the advantages of departmental collaboration, and used methods such as spot patrols, surprise inspections, and joint law enforcement to accurately locate the locations of production facilities in residents’ residences, and effectively crack down on the online sales of infringing and counterfeit goods.

6. Xinjiang Uygur Autonomous Region Hotan Regional Market Supervision Bureau investigates the case of selling falsely marked patented fertilizers by Xinjiang Ajiayip International Trading Co., Ltd.

On April 18, 2023, the Hotan Prefecture Market Supervision Bureau of the Xinjiang Uygur Autonomous Region imposed administrative penalties on Xinjiang Ajiayipu International Trading Co., Ltd. for illegal sales of counterfeit patented fertilizers in accordance with the law. It confiscated illegal gains of 11,300 RMB and fined 75,000 RMB.

On March 1, 2023, law enforcement officers from the Hotan Regional Market Supervision Bureau conducted a law enforcement inspection on the office premises and warehouse of Xinjiang Ajiayipu International Trade Co., Ltd. and found that the words “Complex Titanium Patented Formula ZL201610715940.8” were printed on the packaging of acid sulfur-based nitrogen fertilizer, blended nitrogen fertilizer, and urea ammonium nitrogen fertilizer. After investigation, the application for “Complex Titanium Patented Formula CN201610715940.8” was filed by Liu on August 25, 2016, and was rejected by the Patent Office of the China National Intellectual Property Administration (CNIPA) on February 25, 2022. The above-mentioned chemical fertilizers were marked with patent logos on the packaging of products that had not been granted patent rights. The parties purchased a total of 94 tons and sold 76 tons, with a value of 158,600 RMB. The behavior of the parties constitutes patent counterfeiting (false marking) as stipulated in the Implementing Regulations of the Patent Law of the People’s Republic of China. Hotan Regional Market Supervision Bureau imposed administrative penalties on the parties concerned in accordance with the law.

In this case, the goods sold were marked with the mark of the rejected patent, which misled and deceived consumers, harmed their legitimate rights and interests, and disrupted market order. Market supervision departments will crack down on this kind of behavior that uses “high-tech” gimmicks to expand product influence and seek illegal benefits in accordance with the law, and make every effort to safeguard the legitimate rights and interests of consumers and the market order of fair competition.

7. The Shanghai Municipal Market Supervision Bureau investigated and dealt with the case of Shanghai Shengbei Enterprise Service Co., Ltd.’s unauthorized patent agency business

On September 6, 2023, the Shanghai Municipal Administration for Market Regulation imposed administrative penalties on Shanghai Shengbei Enterprise Services Co., Ltd. for illegal activities of conducting patent agency business without authorization, confiscated the illegal gains of 52,200 RMB, and imposed a fine of 52,200 RMB to double the illegal gains.

On February 21, 2023, the Shanghai Municipal Administration for Market Regulation received evidence that revealed that the party involved, Shanghai Shengbei Enterprise Services Co., Ltd., was suspected of conducting patent agency business without authorization. After investigation, from September 2021, the party concerned signed 110 patent application agency contracts with 109 clients without obtaining the “Patent Agency Practice License.” The contract stipulated that the above-mentioned clients would act as agents for inventions. A total of 831 utility model and other patent applications were filed. Among them, 497 patent applications have been completed and 334 patent applications have not been completed. According to another investigation, from September 2021 to February 2023, the party concerned promoted on its website “Professional project declaration, helping companies get millions of funds in subsidies; a team of intellectual property doctors; an intellectual property platform that has no rejection anxiety; a pair of trademark application experts  and other contents that are inconsistent with the actual situation. The behavior of the party violated the provisions of Article 9, Paragraph 1 of the Patent Agency Regulations, and the Shanghai Municipal Administration for Market Regulation imposed administrative penalties on the party in accordance with the law. The Shanghai Municipal Administration for Market Regulation also imposed penalties for violations of the Anti-Unfair Competition Law of the People’s Republic of China.

This case is a typical case against illegal activities in the patent agency industry. Patent agencies are an important link in converting innovative achievements into patent rights and ensuring the effective operation of the patent system. The market supervision department further regulates patent applications and agency activities by cracking down on illegal activities in patent agencies, promotes the improvement of quality and efficiency in the entire intellectual property chain, and ensures the transformation and application of intellectual property rights.

8. The Beijing Municipal Market Supervision Bureau investigated and dealt with the case of Zhongzhichan (Beijing) Intellectual Property Operation Management Co., Ltd.’s forgery of geographical indication certification trademark application materials.

On March 20, 2023, the Beijing Municipal Administration for Market Regulation imposed administrative penalties on China Intellectual Property (Beijing)  Management Co., Ltd. for the illegal act of forging application materials for geographical indication certification trademarks in accordance with the law, and issued a warning and a fine of 80,000 RMB.

On October 8, 2022, the Beijing Municipal Administration for Market Regulation received evidence reporting that China Intellectual Property (Beijing)  Operation Management Co., Ltd. was suspected of illegal trademark agency activities. After investigation, in the process of representing the three geographical indication certification trademark applications for “Changli Dry Cucumber”, “Qinglong Cashmere Goat” and “Qinglong Cashmere”, in order to meet the intellectual property review requirements, the party conspired with the applicant to target Changli and Qinglong counties. The relevant county records were tampered with. At the same time, he forged the official seal of a university library in Hebei, used photoshop technology to stamp it on the above-mentioned county chronicle materials, and submitted it to the intellectual property review authority as trademark application materials. The agency also conspired with the applicant to tamper with the validity period of the applicant’s legal person certificate. The behavior of the parties constitutes an illegal act stipulated in Article 68, Paragraph 1, Item (1) of the Trademark Law of the People’s Republic of China and Article 88, Item (2) of the Implementation Regulations of the Trademark Law of the People’s Republic of China. The Beijing Municipal Market Supervision Bureau imposed administrative penalties on the parties concerned in accordance with the law.

In this case, the Beijing Municipal Market Supervision Bureau, the Hebei Provincial Market Supervision Bureau, and the market supervision departments of Baoding City, Qinhuangdao City, Changli County, and Qinglong Manchu Autonomous County worked together to verify the existence of the parties in accordance with the relevant provisions of the Beijing-Tianjin-Hebei Intellectual Property Law Enforcement Cooperation Agreement. A number of illegal acts were committed, laying a solid foundation for the investigation and handling of the case. This case severely cracks down on the forgery of geographical indication application materials and has a deterrent effect on illegal activities in the trademark agency field. It is a typical case of cross-regional law enforcement cooperation.

9. The Market Supervision Bureau of Jinan City, Shandong Province investigated and dealt with the case of Jinan Chenghe Intellectual Property Agency Co., Ltd. illegally engaging in trademark agency business

On July 18, 2023, the Market Supervision Bureau of Jinan City, Shandong Province imposed administrative penalties on Jinan Chenghe Intellectual Property Agency Co., Ltd. for illegally engaging in trademark agency business. It issued a warning, confiscated illegal gains of 5,000 RMB, and fined it 40,000 RMB. The person directly responsible, Jiang, was given an administrative penalty of a warning and a fine of 20,000 RMB.

In March 2023, Jinan Market Supervision Bureau received evidence that revealed that Jinan Chenghe Intellectual Property Agency Co., Ltd. was suspected of illegally engaging in trademark agency business. The Law Enforcement and Inspection Bureau of the Shandong Provincial Market Supervision Bureau and the Jinan Municipal Market Supervision Bureau jointly conducted an on-site inspection of the parties’ business premises in conjunction with the public security organs. After investigation, since November 1, 2019, the party concerned has applied for a large number of trademarks on behalf of 49 trademark application entities. The above-mentioned applied trademarks are similar to Adidas Co., Ltd., SKAJ USA, Lacoste Inc., New Balance Sports America Inc. and other previously well-known or highly distinctive trademarks. Obviously, it disrupts the order of trademark registration. As a professional trademark agency, the party accepted the entrustment despite knowing that the client was applying for a registered trademark in bad faith not for the purpose of use, which violated the provisions of Article 19, Paragraph 3 of the Trademark Law of the People’s Republic of China, and constituted a bad faith application for a trademark.  Jinan Market Supervision Bureau imposed administrative penalties on the parties and the main responsible persons in accordance with the law.

This case is a typical case to crack down on trademark agencies’ illegal and malicious applications for trademark registration. In the early stages of case investigation, the market supervision department ordered the parties to stop illegal agency behavior and proactively withdraw and cancel some trademarks, which reduced the cost of rights protection for rights holders. This case also imposed penalties on the parties involved and those directly responsible, ensuring that the penalties and warnings were in place, forming a strong deterrent to malicious applications for trademark registration, and maintaining the order of the trademark agency industry.

10. The Market Supervision Bureau of Qingyang District, Chengdu City, Sichuan Province investigated and dealt with the case of Chengdu Aier Eye Hospital Co., Ltd.’s unauthorized use of the logo of the 31st Universiade

On October 30, 2023, the Market Supervision Bureau of Qingyang District, Chengdu City, Sichuan Province imposed administrative penalties on Chengdu Aier Eye Hospital Co., Ltd. for the illegal use of the logo of the 31st Universiade without authorization and fined it 3,000 yuan.

On July 28, 2023, the Qingyang District Market Supervision Bureau received a complaint from the Executive Committee of the 31st Summer Universiade, claiming that Chengdu Aier Eye Hospital Co., Ltd. used the Chengdu Universiade emblem and the emblem in the WeChat public account promotional materials without permission.  After investigation it was found that the party involved used the same words and graphics as the emblem of the Chengdu Universiade in his WeChat public account tweets without obtaining authorization from the 31st Summer Universiade Executive Committee . The post on the WeChat public account was published on July 25, 2023, and deleted on August 1, 2023. The behavior of the party violated the provisions of Article 16 (1) of the “Regulations on the Management of Special Signs”, and the Qingyang District Market Supervision Bureau imposed administrative penalties on the party in accordance with the law.

As a large-scale international sports event held in China for young college students from all over the world, the Chengdu Universiade has attracted great attention from the domestic and international society. This case is a typical case of using WeChat public accounts, mini programs, etc. to carry out online marketing and infringe on intellectual property rights. This type of illegal behavior has the characteristics of short duration and difficulty in obtaining evidence. The market supervision department dealt with it quickly, decisively recorded the evidence, investigated and dealt with the special mark infringement and illegal acts in accordance with the law, and effectively protected the legitimate rights and interests of the special mark rights holders of the Chengdu Universiade.

The original text is available here (Chinese only).

Author: Aaron Wininger

Aaron Wininger is a Principal and Director of the China Intellectual Property at Schwegman Lundberg & Woessner.

Author: Aaron Wininger

Aaron Wininger is a Principal and Director of the China Intellectual Property at Schwegman Lundberg & Woessner.