How can Shenzhen enterprises protect their rights after trademark registration and patent infringement

Last month, a boss who works in smart hardware rushed to our law firm from Nanshan, Shenzhen. The first thing he said upon entering was: "My core technology was taken away by a former employee and applied for a patent. The brand name that I have been using for 7 years has also been hijacked by others. Now all the products have been taken down by e-commerce platforms, and the payment has been reduced by more than 6 million yuan. Am I finished?" His phone contains the link to a competitor's newly launched product, which looks and functions almost the same, but the price has been reduced by half.

Is there still a chance to retrieve the trademark that has been registered illegally

Yes, but it depends on whether the actions are fast enough and whether the evidence is solid enough.

According to the Trademark Law, if a trademark that has been preemptively registered is within the initial public announcement period, interested parties may raise objections within three months; If the trademark has been registered, it can also request the China National Intellectual Property Administration to declare it invalid - provided that the other party is "the first to register the trademark that has been used by others and has certain influence by improper means", and it should put forward within five years from the date of trademark registration. Famous trademarks registered maliciously are not subject to a 5-year restriction.

In reality, many Shenzhen bosses are stuck in the same point: they only have products in their hands and do not keep good evidence of trademark use. Invoices, contracts, sales records of e-commerce platforms, exhibition photos, and advertising placement records are all materials that prove that they have been used and have a certain impact.

We handled a case involving a Longhua electronic cigarette accessory manufacturer, and with a stack of 2018 purchase orders and two exhibition catalogs, we retrieved the trademark that was preemptively registered during the invalidation process, which lasted for 9 months. This type of program is not about eloquence, it's about materials.

Discovering patent infringement, the first step is not to send a lawyer's letter

The most common mistake in handling a large number of patent infringement cases in Shenzhen is to "startle the snake" - before the evidence is fixed, call the other party to question them, and by the time they go for notarization, the other party's website and factory assembly line have already been cleaned up.

The correct first step is evidence preservation: entrusting a notary office to notarize the online sales link and offline purchase process of infringing products. A standardized notarized certificate has a high degree of credibility in litigation. Attention should also be paid to saving page snapshots, transaction records, and logistics information in the online section to form a complete chain.

According to the Patent Law, the amount of compensation shall be determined based on the actual losses suffered by the right holder due to infringement; If the actual loss is difficult to determine, it can be determined based on the benefits obtained by the infringer due to the infringement; If both are difficult to determine, they should be reasonably determined by referring to the multiple of patent licensing fees.

We have handled a design patent infringement case in Shenzhen, with a client being a design company in Futian. The patented product was a water cup. Through a court investigation order, the infringing party's transaction records were retrieved, and it was found that the other party sold 117000 pieces within two years at a unit price of 39 yuan. Combined with profit margins, the court ultimately ruled a compensation of 3 million yuan and issued a behavior preservation injunction. The relevant links were taken down on the same day.

Another point to note is that the Shenzhen court has a strong judgment on compensation for intellectual property cases, but the prerequisite is that the rights holder can provide quantifiable loss or profit data. The court cannot support the claim that 'the other party sold a lot'.

Core technology taken away by former employees, can we sue

It can be sued, but the difficulty is greater than trademarks and patents. Many bosses believe that 'signing a confidentiality agreement is enough to win', which is a misconception.

The Anti Unfair Competition Law stipulates that trade secrets must meet three requirements simultaneously: not being known to the public, having commercial value, and the right holder taking corresponding confidentiality measures. Three conditions are indispensable, among which "confidentiality measures" are the most common point of failure in Shenzhen cases.

When receiving consultation, we will first ask three questions: Is there a hierarchical management of technical data? Is there access permission set for classified computers? Did the departing employee sign a handover checklist? If the answers are all 'no', the case often can only be resolved through negotiation. On the other hand, if every item has a trace, there is confidence in advocating for it.

In terms of compensation, the Shenzhen court's punishment for malicious infringement of trade secrets has been increasing year by year. A technology company in Nanshan sued a former employee for leaking chip design drawings, relying on surveillance videos and access card records in the office area, and received compensation of 1.8 million yuan. This type of evidence is usually inconspicuous, but it is most useful when something happens.

How much time does it take to file an intellectual property lawsuit in Shenzhen

Invention patent infringement cases are generally divided into two stages: the first instance takes 6 months, the second instance takes 3 months, and the technical appraisal involved is further extended by 3 to 6 months; Design, utility model, and trademark infringement cases are usually faster, with the first instance usually taking around 4 months.

In terms of jurisdiction, it should be clarified that disputes over invention patents are under the jurisdiction of the Shenzhen Intermediate People's Court; The disputes over appearance design, utility model patents, and trademark infringement have sunk to the intellectual property courts of four grassroots courts in Futian, Nanshan, Longhua, and Longgang. Confirm jurisdiction before filing a lawsuit to avoid delays caused by transfer.

The number of intellectual property cases in Shenzhen's two-level courts is large, with over 37000 new intellectual property cases filed in 2023, an annual increase of 15%. Having multiple cases means a tight schedule, and it also means that preservation, notarization, and appraisal actions need to be done in advance, and cannot be supplemented after the case is filed.

Three actions can be done today

• Organize the sales contracts, product design drafts, chat records, and shipping orders on hand into a book by time, and mark the time of formation;
• Check the registration status and category of the trademark to see if it covers the actual goods or services being operated;
• Check the application date, authorization announcement date, and annual fee payment status of the patent, and do not let the rights expire unintentionally.

Intellectual property rights protection is a matter that can be accounted for, not a matter of gambling. But the premise is that the evidence is still there and the deadline has not passed. Every year in Shenzhen, rights holders lose their eligibility for protection due to procrastination, missing the objection period or statute of limitations for litigation.

Guangdong Zhiming Law Firm is located at Room 1802, Building A, Xintian Century Business Center, Shixia North Second Street, Futian District, Shenzhen. It is not far from the People's Court of Futian District and the Shenzhen Intermediate People's Court. The phone number is 0755-25986969. You can bring the materials on your hand first and organize the facts into an understandable clue.