On 13 August, at the invitation of LCOUNCIL, Lusheng Law Firm and its strategic partner Rouse jointly held an online seminar themed “Brand Protection Battle: In-depth Analysis of Landmark Cases and Cutting-edge Litigation and Enforcement Strategies – Breakthroughs in Difficult Issues such as Punitive Damages, Cross-regional Criminal Enforcement, and Rights Protection in Key Industries”.
The key points shared at this online seminar are summarized below, and we cordially invite you to review them with us.
Q: As a right holder, how should one effectively combat repeated infringement?
A: In practice, repeated infringement occurs from time to time. To better combat repeated infringement, it is necessary to effectively curb infringing acts from the two aspects of prevention and deterrence. First, after taking initial enforcement action against a target, the right holder should, to the extent possible, require the counterparty to sign a Settlement Agreement or Letter of Undertaking, under which the counterparty undertakes to cease the infringement and agrees on punitive damages for any repeated infringement. Second, after the case is closed, the target should be subject to regular monitoring. Once any infringing act is discovered, the right holder should promptly conduct investigation and evidence collection and initiate litigation, relying on the evidence and the Settlement Agreement to claim substantial punitive damages, thereby using the court’s judgment to effectively crack down on repeated infringers and to effectively deter other infringers in the market.
Q: In criminal–civil crossover cases, what are the key points for obtaining the court’s support for a claim for punitive damages?
A: First, it is necessary to determine whether the case satisfies the conditions for the application of punitive damages. In criminal–civil crossover cases, the infringer’s subjective malice in infringing intellectual property rights is usually not difficult to prove, and the criminal case will also make a clear finding on the infringer’s subjective intent. The main difficulty lies in proving that the infringing act has reached the standard of “serious circumstances”. To this end, it is necessary to rely on the evidentiary materials in the criminal case and comprehensively analyze such factors as the infringer’s means and frequency of infringement, the duration, geographical scope, scale and consequences of the infringing acts, and the infringer’s conduct during the proceedings, so as to prove the existence of serious circumstances. Where circumstances expressly listed in judicial interpretations are present, such as repeated infringement, engaging in intellectual property infringement as a business, or obtaining huge profits from infringement, the likelihood of obtaining the court’s support is relatively high.
In addition, sufficient evidence supporting the calculation of the amount of punitive damages can also increase the likelihood that the court will apply punitive damages. In criminal–civil crossover cases, attention should be paid to the findings in the criminal case regarding the amount of illegal gains or sales. In particular, where the infringer has infringed the intellectual property rights of multiple right holders (for example, counterfeiting multi-brand products), it is necessary to consider whether the amounts relating to the asserted intellectual property rights can be distinguished. Based on the findings in the criminal case regarding the amount of illegal gains or sales, the right holder may claim to use the infringer’s illegal gains or the benefits obtained from the infringement as the basis for calculation. Where the criminal case has ascertained only the sales amount but not the illegal gains, the infringer’s profits from infringement may also be calculated by submitting the industry profit margin or the profit margin of the right holder’s products.
Q: With respect to brand protection, apart from early and comprehensive protection of brand elements, are there any other recommendations?
A: With respect to brand protection, in addition to registering brand elements “as early as possible and in all classes”, more attention should be paid to the “brand life cycle”, which is a second battlefield that is often overlooked. Once products have achieved localized production, with dense distribution channels and transparent pricing, counterfeit goods tend to be relatively restrained as profit margins are compressed; the real risk is concentrated in the “initial import stage”. At this stage, the product appearance, batch information, and traceability methods are not yet familiar to consumers, and official channels are also limited, making it easy for an “information blind spot” to arise. Counterfeit goods can thereby mix in and may even be mistaken for genuine “parallel imports”, turning this into a high-incidence disaster area.Many groups hold multiple brand portfolios, and the pace at which each brand enters the PRC market varies. It is common for rights protection budgets to be compressed on the grounds that import sales are still small. However, it is precisely during this period that counterfeit goods seize consumer mindshare through “high premium, small-batch” sales, and the risk is greatest.Therefore, it is recommended that right holders front-load their enforcement budgets, reserve sufficient budget, elevate the risk level associated with the import window period, and, ahead of counterfeiters, firmly implant the “genuine product standard” in consumers’ minds. This is the true first-mover advantage.
Q: For brand protection of game-related electronic products, how should right holders respond to the evolution of infringement methods at different stages?
A: Taking game controller products as an example, we have experienced three stages.
Stage One: Before the highest-version chip was cracked, the market first saw controllers that imitated its industrial design, some of which fell within the scope of our client’s patent protection. At this stage, the right holder could carry out large-scale enforcement against infringers based on acts infringing design patents. As infringers were less vigilant at this stage, the right holder could obtain infringement evidence through direct investigations and then file complaints with the local Administrations for Market Regulation.
Stage Two: After large-scale enforcement against patent infringement, the number of similar infringers in the market decreased, and some infringers began to sell peripheral products for counterfeit controllers (such as charging docks, gaming headsets, etc.). At this stage, our enforcement strategy was to use trademark infringement as the cause of action, depending on the infringer’s infringing circumstances, and to comprehensively employ administrative and criminal measures for enforcement.
Stage Three: Once chips for cracking game controllers emerged, the scope of infringement expanded. At this stage, we conducted a large number of test purchases to obtain samples of game controllers from various sources, analyzed the possible manufacturers of the cracking chips and the principal infringers, and ultimately identified the source of the cracking chips, whereupon we conducted investigations against them and fed the cracking technology back to the client. On the basis of understanding the cracking principles, we provided the client with comprehensive legal advice and enforcement strategies. For counterfeit-type infringement, we continued to take enforcement action on the basis of trademark infringement, whereas for controllers using third-party shells but containing cracking chips as their core, we adopted copyright infringement or unfair competition as the basis for rights protection.
Q: Could you share some recent cases of cross-regional criminal enforcement?
A: Case One: In January 2025, we coordinated the local public security authorities in Guangzhou and Huizhou to carry out simultaneous criminal enforcement actions against the target, achieving a full-chain crackdown from upstream manufacturers and processing sites to downstream online-store warehouses. This case was a successful example of territorial jurisdiction prior to the issuance of the new regulations by the Ministry of Public Security. Through joint enforcement by the local Administrations for Market Regulation and Public Security Bureaus, the production and sales chain of counterfeit goods upstream and downstream was effectively dismantled.
Case Two: In June 2025, after the issuance of the new regulations by the Ministry of Public Security, we assisted the Foshan public security authorities in carrying out criminal enforcement against a target who resided in Foshan but whose infringing warehouse was located in Guangzhou. While seizing a large quantity of counterfeit goods, we used online-store data from the suspect’s computer and mobile phone to link the group based in Foshan with the warehouse located in Guangzhou. This was a successful practical experience of cross-regional jurisdiction following the issuance of the new regulations.
