With offices in Taipei, San Francisco, Beijing, and Shanghai, the law firm Wang & Wang is well-positioned to represent businesses in corporate litigation, including actions for breach of contract, fraud, and deceptive trade practices. As experienced intellectual property attorneys, a significant portion of our litigation practice is devoted to helping our clients fight infringement and counterfeiting in both the civil and criminal courts.
Civil Action in China
In China, an award for damages or injunction should be issued by the civil courts. A plaintiff institutes a suit by filing a written complaint with the local court of the appropriate level. A trial is conducted as a series of hearings usually occurring over three to six months. Appeals are conducted by the next higher level of court, as a trial de novo.
Criminal Action in China
The intellectual property (IP) rights holder may seek criminal remedies against infringers. For common IP crimes, the IP rights holder may file a complaint directly with the competent court, and for serious IP crimes, the IP rights holder should report the crime to the local public security office of the place of crime so that police can investigate, and possibly initiate a raid. All kinds of appropriate evidence discovered in inspections or searches relevant to the guilt or innocence of a defendant may be seized. Products other than those named in a warrant may be seized at the discretion of law enforcement officials. Then after investigation the public security office will transfer the criminal case to the public prosecutor's office for possible indictment. After indictment, there will be a series of hearings for the criminal trial process. The criminal penalties with respect to counterfeiting are as follows: (a) for use or sale resulting in substantial illegal income, not more than three years imprisonment and/or fine; (b) for use or sales where the illegal income is enormous, not less than three years or more than seven years imprisonment and fine.
Administrative Action in China
In China, the preferred method of investigating infringement is through administrative complaint. Administrative agencies, such as the Administration for Industry and Commerce (SAIC), the IP Office, and the Copyright Authority, have the power to investigate companies for patent, trademark, unfair competition, and copyright infringement. In addition, there are fewer formalities, and the cost of filing an administrative complaint is less than the cost of litigation. However, a complainant is not in control of the process, and administrative authorities can sometimes seem less than aggressive in pursuing complaints against Chinese companies.
An IP rights holder is entitled to an injunction that is reasonable to deter future infringement in China. Under certain situations, the rights holder may apply to the court for preliminary injunction against infringement before a lawsuit is filed. The rights holder must submit sufficient evidence showing its intellectual property rights and existence of infringement or threatened infringement. The rights holder must provide security for the preliminary injunction. Once the preliminary injunction order is granted by the court, the rights holder must file a lawsuit with the court within 15 days.
The Court has the authority to order prompt and effective preliminary execution against infringing goods in order to stop the infringement, remove the obstacle, and eliminate danger. The Court has broad discretion to take provisional measures. However, the rights holder is liable for any damages due to a wrongful preliminary measure not limited to the amount of a bond. The court will consider various factors in determining the amount of bond, such as sales revenue of goods involved, storage fees, and potential damages or losses as a result of the order.
Litigation in Taiwan
Civil Action in Taiwan
In Taiwan, an award for damages or injunction should be issued by the civil courts. A plaintiff institutes a suit by filing a written complaint with the District Court. The evidence at trial may be presented either by the parties to the action. A trial is conducted as a series of hearings usually occurring over one year. Appeals are conducted by the next higher level of court, as a trial de novo.
Criminal Action in Taiwan
If the intellectual property rights holder seeks criminal remedies against infringers, we recommend that a complaint be filed directly with the Public Prosecutor's Office. The prosecutor has discretion to initiate a raid, and may do so upon a rights holder's request. All kinds of appropriate evidence discovered in inspections or searches that may be used to prove the guilt or innocence of a defendant may be seized. Following a raid, the prosecutor will hold a set of hearings. The proceedings usually last six months to one year before the prosecutor files an indictment. The criminal penalties with respect to counterfeiting include the possibility of imprisonment for no more than three years, detention and, in addition thereto or in lieu thereof, a fine of no more than NT$200,000.
In Taiwan, although the Court may issue a preliminary injunction if petitioned to do so, the Court has ample discretion to determine the provisional measures it deems appropriate to each case. In addition, the petitioner must file a civil suit within a period specified by the Court, which is usually about one week. In the case of a provisional seizure for a monetary claim, the defendants may request that the Court order the plaintiff to post a bond, usually somewhere between one third to one half of the plaintiff's claim, to cover the defendant's potential damages. However, in the case of provisional measures for a non-monetary claim, such as a claim for ceasing infringement, the court may request the plaintiff to post a bond for the full damages that may be suffered by the defendant. If the plaintiff loses the civil suit, it is liable for the defendant's actual damages, not limited solely to the bond posted. Damages could include injury to the defendant’s reputation.
Indictment and Trial
Following a raid, the Public Prosecutor's Office holds indictment hearings. These usually take six months to twelve months, and consist of a series of four to five hearings. If an indictment is filed, there is another series of hearings for the criminal trial. This set of hearings usually lasts another three to twelve months.
With a criminal indictment secured, we generally file an ancillary civil suit. One advantage of a piggy-back civil suit is that a plaintiff avoids the requirement to post civil court costs. The costs the plaintiff must post are generally a percentage of the damages or the value of the injunction claimed. These costs may be assessed at up to 4% of the value of the damages or injunction claimed, depending on various factors. Court costs operate as a strong disincentive to claiming damages, and put the plaintiff in a civil suit at a financial risk, thus discouraging weak claims.