Calculating Trade Secret Damages in Chinese Courts
Chinese courts calculate trade secret damages through actual losses, infringer profits, or license multiples, applying apportionment and punitive multipliers up to five times base losses.
Bad Faith Intent Criteria
Meaning
Legal standards established by Chinese intellectual property authorities evaluate whether a trademark registration application has been submitted with malicious intent or without a genuine desire to use the mark. Under the amended PRC Trademark Law, the bad faith intent criteria allow examiners to reject applications from trademark squatters before the marks are registered. This regulatory framework targeting bad faith applications protects legitimate brand owners from extortionate purchase demands.
The rules prevent the hoarding of names that are identical to famous international brands.
Assessment Factor
Examiners review the historical filing volume of the applicant to determine if a pattern of hoarding exists. A high volume of filings across multiple unrelated goods categories often indicates a speculative motive. Authorities also check whether the applicant has demanded high transfer fees from the original brand owners soon after registration.
Enforcement Power
The National Intellectual Property Administration can reject applications directly during the preliminary examination phase. Oppositions filed by third parties can also invoke these rules to block pending applications. If a mark has already been registered, injured parties can petition the Trademark Review and Adjudication Board for invalidation at any time.
Statutory Outcome
Successful application of the standard results in the cancellation of the registered mark or the rejection of the pending filing. Fines can be imposed on trademark agencies that assist clients in filing speculative applications. Civil courts can award damages to original brand owners to cover the cost of fighting these registrations.
The determination of bad faith removes the five-year time limit for filing invalidation actions, which allows historical owners to recover their rights even after long delays in discovering the infringement.