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 Trademark lawyers across Asia and the Pacific speak with Johnny Chan about the latest legislative changes in their jurisdictions, as well as the best tips on devising appropriate enforcement strategies before, during and after trials.
Over the past 12 months, several Asia-Pacific jurisdictions have had important law amendments with respect to trademark enforcement.
In China, the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of the Law in Civil Disputes Concerning Trademarks (effective January 1, 2021), toughens up the fight against trademark infringement. “For example, the statute of limitations of trademark infringement has been revised from two to three years, which extends the retroactive period for infringing acts; and, the degree of fault of the infringer is now taken into consideration to determine the amount of compensation and punitive damages,” says Xia Zheng, president at AFD China in Beijing. “Similarly, in the Interpretation of the Supreme People’s Court Concerning the Implementation of Punitive Damages in Civil Disputes Concerning Infringement of Intellectual Property Rights (effective March 3, 2021), there are specific provisions concerning the criteria of punitive damages, i.e. the degree of subjective malignancy, the seriousness of circumstances and the computational cardinal number of compensation.”
.jpg "1(20).jpg") In South Korea, “it will unarguably be
the newly introduced punitive damages which increase up to three times the
amount found or assessed for malicious or intentional trademark infringement,”
says Yung Joon Kwon, managing partner at Kwon & Kim Patent & Trademark
Attorneys in Seoul. “That went into law by Congress on September 24, 2020, and
has been in force since October 20, 2020.” The statutory remedy has been increased to ₩100 million (US$88,800) for trademark infringement and to ₩300 million (US$266,000) for malicious or intentional trademark infringement, says Kwon.
The new law stipulates that the following are to be considered for evaluating the punitive remedies: 1. Damage of distinctiveness or reputation of
the trademark caused by such infringement; 2. Awareness of concern over intent or
possible loss; 3. Severity of the damage to the trademark
holder or exclusive licensee caused by such infringement; 4. Economic benefits the infringer has
obtained; 5. Duration,
frequency, etc. of such infringement; 6. Fines for such infringement; 7. Property of the infringer; and 8. Efforts made by the infringer for remedies. .jpg "2(11).jpg") “The increased level of statutory remedy
will be the enhanced resort for right holders as they can ensure a sort of
minimum monetary remedy, even when they have difficulty in proving the economic
benefits infringers have obtained without the discovery s ystem,” Kwon says.
“Right holders have very limited access to the financial materials of infringement
activities.” “A US-like discovery has not been introduced into Korean IP litigation, which still brings difficulties in proving actual damages in courts to right owners. And the remedy amount may not be sufficient to make up for the actual damages that would be granted,” he says. “If it could be proved, such dramatic changes in monetary remedies against trademark infringers will surely motivate right owners to initiate enforcement litigations. As much as it does, suspected infringers could still be more careful and aggressive in negotiating. In any event, it can be concluded that enforcing trademark in Korea becomes more worthy now than ever before.”
Vietnam has also had three significant
developments recently related to the new Decree 98/2020/ND-CP: namely, on the
penalties for administrative violations in commercial activities; the
production of and trading in counterfeit or banned goods; and protection of
consumer rights which came into force on October 15, 2020, says Manh Hung Tran,
head of the IP practice and managing partner of Baker McKenzie Vietnam in Ho
Chi Minh City. “These changes have been made to increase enforcement and
criminalize counterfeiting or banned goods, as an indirect way to enhance
consumer rights. The thresholds for financial penalties on illegally imported
goods were also raised, signifying a tougher stand to protect commercial IP.” .jpg "3(13).jpg") On the other
hand, Australia did not implement any significant legal amendments with respect
to trademark enforcement over the past 12 months, but during this period, IP
owners were able to experience the impact of the key amendments that came into
force in late 2018, namely: a) reducing the grace period for non-use
applications from five to three years; and b) introduction of a new defence to
trademark infringement intended to clearly and expressly permit the importation
and sale of parallel (grey) goods (Trade Marks Act 1994, section 122A), says
Elizabeth White, a partner at Baker McKenzie in Sydney. “The defence applies in
circumstances where a reasonable person making reasonable enquiries would have
concluded that trademarks have been applied to the goods with the consent of
the trademark owner, e.g. where a certificate of authenticity is provided by
the supplier. The breadth this defence and its impact beyond genuine (parallel
imported) goods is having major implications for brand owners, impeding
trademark enforcement activities and expanding unauthorized trade channels into
Australia.” Forum shopping While not all jurisdictions allow lawyers to choose litigation venues, those in the places that can might want to learn from an Indian lawyer below to increase their chances of winning. .jpg "4(4).jpg") Selecting the venue for upcoming
litigation is dependent on several factors, both legal and practical, says
Rachna Bakhru, a partner at RNA, Technology and IP Attorneys in Gurugram. “From
a legal perspective, the courts’ jurisdiction is decided on three counts –
territorial, pecuniary and the subject matter. In selecting the venue, one
would consider whether the court is likely to grant quick interim injunction
and possibly an ex parte interim injunction. Has the court
heard cases of similar nature? Are you likely to face territorial jurisdiction
objection, if you are doing forum shopping? If such an objection is raised, do
we have good precedents to rely upon? If no ex parte injunction
is granted, what is the pendency of cases and how long will it take for a
matter to mature for hearing after parties have filed their replies.” With IP being part of the Commercial
Courts Act, each district has appointed commercial judges to hear the cases.
“At the same time the High Courts at Delhi, Bombay and Kolkata can act as court
of first instance or take fresh IP cases. Thus, that is another consideration
when selecting the venue as many IP cases do come up before the High Court,”
Bakhru says. “To invoke the High Courts’ jurisdiction, a plaintiff needs to
claim monetary loss or damages of Rs20 million (US$285,700) or more and pay the
court fee of 1 percent, and satisfy the territorial infringement aspect as
well.”
.jpg "5(4).jpg") Chasing invoices As many who have won trademark lawsuits
would agree that recovering damages from infringers is often a forgotten
challenge, lawyers we spoke with shared their tactics on attaining the awarded
relief. “It is indeed quite challenging to
recover damages from infringers despite awarded from courts. This is generally
because many of the IP cases are against parties that have small operations and
they generally move from their original addresses soon after the cases are
filed. Also, they do not maintain proper accounts and sales records, which make
calculation of damages difficult,” Bakhru says. “Before the Commercial Courts
Act came into effect, there were no discovery provisions, so finding
information about movable and immovable assets of defendants would be a
daunting task.”
If an infringer fails to respect the court order and comply, the legal options available are to institute proceedings for contempt of court during the pendency of proceedings. “Once the final decree is passed, it can be executed to recover the cost and damages awarded. As part of the execution of decree, the plaintiff can apply for the attachment of defendant’s movable and immovable property to recover the amount,” she says. “However, in practice, the out-of-court settlement works better and is quicker. Execution of a decree is similar to bringing a fresh lawsuit, so it can be time consuming and expensive.”
.jpg "6(5).jpg") “We have successfully recovered damages
from infringers by engaging them into negotiations directly and through court
appointed mediators,” she adds. “So instead of pursuing the matter to full
trial which can be time consuming and expensive, it is better to have
settlement arrived soon after the goods are seized and an injunction is granted
by the court.” Say Sujintaya, head of IP at Baker McKenzie in Bangkok, agrees that civil litigation for trademark infringement can be lengthy and costly, not to mention that it is uncommon. “More importantly, damages awarded by courts tend to be low as they only award actual provable damages – which are the challenging part for trademark holders. The upside to this is that it is usually not challenging to recover damages awarded.”
Nevertheless, if there are any concerns over the defendant paying damages, it is possible to obtain a freeze order to ensure that the defendant does not transfer his/her assets to avoid paying. “The plaintiff may file an ex parte petition requesting a preliminary injunction on the same day that the civil complaint is filed or at any time before the court renders a decision. The injunction serves to temporarily freeze the defendant’s assets if it appears that the defendant intends to remove, transfer, sell or dispose of such assets with the intention of avoiding enforcement of the court’s judgment,” Sujintaya says. “While the law provides this as a way to guarantee the defendant will pay damages, in practice, it is very difficult to convince the court to grant this freeze order as the burden of proving the defendant’s intentions lies with the plaintiff.”
The other incentive for a defendant to promptly pay damages, is that a court will usually impose an interest payment at a rate of 7.5 percent per year from the date the civil complaint is filed until the defendant pays in full in its judgment, she says. “Of course, if the defendant intentionally refuses to pay the damages, that could constitute another offense in relation to fraud for which the plaintiff can take a separate legal action against.”
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