China’s Supreme People’s Procuratorate Publishes the “Typical Cases of Procuratorial Organs Punishing Malicious Intellectual Property Litigation”
Published 1 July 2026
Sarah Xuan
On June 9, 2026, the Supreme People’s Procuratorate published five “Typical Cases of Procuratorial Organs Punishing Malicious Intellectual Property Litigation”. The Supreme People’s Procuratorate is China’s highest procuratorial authority and is separate from the Supreme People’s Court. In China’s legal system, the people’s procuratorates serve as constitutional legal supervision organs, playing an important role in criminal enforcement as well as civil, administrative, and public-interest litigation supervision. In the field of intellectual property, procuratorial organs may supervise criminal IP enforcement, civil IP litigation, administrative litigation, and public-interest matters, including by transferring case clues, issuing procuratorial recommendations, filing protests against effective judgments, and promoting coordinated governance with courts and administrative authorities.
These cases cover multiple areas of intellectual property, including utility model patent rights, design patent rights, trademark rights, and unfair competition. Viewed as a whole, these cases clarify the path for examining and determining “malice”. Procuratorial organs did not treat the plaintiff’s loss of the case, instability of the rights basis, or a relatively high amount claimed as the sole basis for determining malicious litigation. Instead, through a penetrating review, they comprehensively examined such factors as the process by which the rights were obtained, the stability of the rights, whether there was genuine use, whether there was an act of infringement, the plaintiff’s production and business operations, the number of lawsuits filed, the timing of filing suit, the amount claimed, the competitive relationship with the defendant, and the actual harm that the litigation might cause. On this basis, procuratorial organs, through such means as transferring clues, issuing retrial procuratorial recommendations, filing protests, conducting follow-up supervision, and engaging in multi-departmental collaboration, achieved prior warning, in-process supervision, and ex post correction of malicious litigation.
The following is an introduction to and summary of the five case studies.
I. Filing Patent Litigation at a Critical Listing Stage: In-Process Supervision of Competitive Malicious Litigation “Procuratorial Supervision Case Concerning Malicious Litigation in a Dispute over Infringement of Utility Model Patent Rights Between a Foshan Intelligent Equipment Co., Ltd. and a Wuxi Mechanical Technology Co., Ltd.”, is a case of malicious patent litigation arising against the background of a competitor’s critical listing stage. The Wuxi company was a high-tech enterprise engaged in the research and development, production, and sale of automated material processing system equipment, with a large number of patents and software copyrights, and was in the process of applying for listing. The Foshan company and the Wuxi company were in the same field, had a competitive relationship, and had repeatedly bid for the same projects. In January 2023, the Foshan company filed a lawsuit against the Wuxi company on the ground that the latter had infringed its utility model patent rights, claiming RMB 23 million in damages. That amount happened to exceed 10% of the absolute value of the Wuxi company’s net assets disclosed for the relevant period, thereby constituting a material litigation matter subject to disclosure, which caused the Wuxi company’s listing process to be suspended.
After discovering clues to the case in the course of performing its duties, the Wuxi Municipal People’s Procuratorate conducted an investigation focusing on the rights basis, the facts of infringement, the litigation motive, and the actual harm. The procuratorial organ found that, before filing suit, the Foshan company had itself applied to the China National Intellectual Property Administration for an evaluation report on the patent at issue, and that the evaluation report found that all claims failed to meet the conditions for the grant of a patent right. At the same time, the Wuxi company had already entrusted a supplier to manufacture the same product before the filing date of the patent at issue, and there was no fact of infringement by the Wuxi company. Taking into account the competitive relationship between the parties, the timing of the lawsuit, the amount claimed, and the impact on the listing process, the procuratorial organ concluded that the Foshan company had obvious subjective malice, and transferred the clues to the court, reminding the court to identify the circumstances in a timely manner and punish the conduct in accordance with the law.
The typical significance of this case lies in its examination of malicious intellectual property litigation in connection with capital-market milestones and commercial competition strategies. Intellectual property litigation may have a significant impact on corporate financing, listing review, goodwill, and market cooperation. Where a plaintiff, knowing that the rights basis has material defects, nevertheless chooses to file high-value litigation at a competitor’s listing, financing, or major transaction stage, its litigation conduct bears the character of competitive suppression beyond the scope of ordinary rights enforcement. This case indicates that the determination of malicious litigation should not remain at the level of formal rights, but should instead comprehensively analyze the function and consequences of the litigation conduct in its commercial context. The procuratorial organ’s intervention by transferring clues while the case was still pending also reflects the important value of in-process supervision in preventing the harm of malicious litigation from expanding.
II. Concealing the Invalidity of a Patent and Continuing Litigation: The Boundary of the Duty of Good Faith in Litigation “Procuratorial Supervision Case Concerning Malicious Litigation in a Dispute over Infringement of Design Patent Rights Between He and a Yiwu Import and Export Co., Ltd.”, mainly concerns the issue of a rights holder deliberately concealing the fact that a patent had been declared invalid and continuing the litigation. After obtaining a design patent for a body-shaping garment, He purchased relevant products through an online platform and had the purchase process notarized, and subsequently filed multiple lawsuits on the ground of infringement of design patent rights. In this case, the court had found the patent at issue to be valid and ordered the Yiwu company to cease infringement and compensate losses and reasonable expenses. After the judgment became effective, the Yiwu company did not appeal.
A subsequent investigation by the Hangzhou Municipal People’s Procuratorate found that, during the litigation, a non-party had filed a request with the China National Intellectual Property Administration for a declaration of invalidity of the patent at issue, and that He not only submitted a written statement of opinions but also participated in the oral hearing. In July 2019, the China National Intellectual Property Administration rendered a decision declaring the design patent at issue invalid in its entirety, and mailed the decision to He. Although He knew that the patent had been declared invalid, He failed to truthfully disclose that fact to the trial court, continued to advance the litigation, obtained several effective judgments, and even applied for compulsory enforcement. After the Zhejiang procuratorial organs filed a protest, the Zhejiang High People’s Court adopted the protest opinion, revoked the original judgment, dismissed He’s lawsuit, and found that He’s conduct constituted an act obstructing civil proceedings, imposing a fine of RMB 50,000.
This case clarifies the boundary of the duty to disclose the legal status of rights in patent infringement litigation. According to the relevant judicial interpretation, where the claims asserted by the rights holder in patent infringement litigation have been declared invalid by the patent administration department under the State Council, the people’s court hearing the patent infringement dispute may rule to dismiss the rights holder’s lawsuit based on such invalid claims; if there is evidence proving that the decision declaring the claims invalid has been revoked by an effective administrative judgment, the rights holder may file a separate lawsuit. Accordingly, whether the patent right remains valid directly affects whether the infringement litigation may continue to be heard. Where a rights holder knows that the patent right has been declared invalid but deliberately conceals that fact and uses the court’s information asymmetry regarding the legal status of the right to obtain a favorable judgment, such conduct has gone beyond ordinary litigation strategy and constitutes a violation of the duty of good faith in litigation. This case shows that the “malice” in malicious litigation may be reflected not only in filing suit while knowing that the rights basis is defective, but also in continuing to use the procedure for gain during the litigation despite knowing that the rights basis has already been lost.
III. Litigation for Profit After Bulk Trademark Registration: From Abnormal Rights Enforcement to Follow-Up Supervision Case Three, “Procuratorial Supervision Case Concerning Malicious Litigation in a Dispute over Infringement of Trademark Rights Between a Shenzhen Investment Co., Ltd. and a Wenzhou Household Products Co., Ltd. and He”, reflects the typical pattern of bulk trademark registration and hoarding followed by litigation for profit. After obtaining a registered trademark approved for use on pillows and other goods in Class 20, the Shenzhen company filed trademark infringement litigation against the Wenzhou company in relation to latex pillow products sold by the latter, and obtained support at first instance. The court ordered the Wenzhou company to cease infringement and compensate RMB 75,000, and ordered the legal representative of the Wenzhou company to bear joint and several liability.
In the course of performing its duties, the Rui’an Municipal People’s Procuratorate discovered abnormal clues relating to the Shenzhen company’s bulk rights enforcement, and further reviewed litigation files, searched litigation data, and verified the facts with the market regulation department. The investigation showed that the Shenzhen company had applied to register more than 600 trademarks across different classes of goods, and since 2019 had sued multiple latex product companies in Zhejiang Province. The company had no actual production or business premises, no production or business activities, and no conditions for production or business operations, and its registered trademarks had not been actually used in production or business activities. At the same time, the trademark at issue was later declared invalid by the China National Intellectual Property Administration, and the relevant administrative litigation also resulted in judgments at two levels upholding the invalidation conclusion. Taking into account the number of trademarks registered by the company, its production and business operations, the number of lawsuits filed, and its litigation motive, the procuratorial organ found that it had filed the lawsuit maliciously. Because the court initially did not adopt the retrial procuratorial recommendation, the procuratorial organ subsequently advanced the supervision through a protest filed by the procuratorial organ at the next higher level, and the Wenzhou Intermediate People’s Court ultimately revoked the original judgment upon retrial and dismissed the Shenzhen company’s lawsuit.
The value of this case lies in highlighting the significance of examining “registration without use” in malicious trademark litigation. The institutional basis of trademark rights lies in identifying the source of goods or services, rather than providing a tool for litigation claims detached from genuine business activities. The bulk registration of trademarks, lack of genuine use, and frequent filing of lawsuits against operators in the same industry often indicate that the rights holder has no normal market operation intent, but has instead transformed trademark registration into a resource for litigation profit. The procuratorial organ’s use of big data screening in this case to discover abnormal litigation clues also provides methodological support for the governance of bulk rights enforcement and professionalized claims. It is particularly worth noting that this case also reflects the necessity of the follow-up supervision mechanism: where a lower-level procuratorial organ’s retrial procuratorial recommendation has not been adopted and there is a genuine possibility of an erroneous judgment, a protest lawfully filed by a higher-level procuratorial organ helps ensure the continuity and effectiveness of supervision.
IV. High-Value Claims After Malicious Registration of Commercial Marks: Penetrating Review of Defects in the Rights Basis Case Four, “Procuratorial Supervision Case Concerning Malicious Litigation in a Dispute over Trademark Rights and Unfair Competition Between a Digital Technology Co., Ltd. and a Technology Co., Ltd.”, likewise concerns the issue of maliciously registering a trademark and then suing the true user of the commercial mark. The joint stock company was established in 1998, had long used “Changgao” as its trade name, and had registered a series of “Changgao” trademarks on goods related to electric power equipment since 2006. In 2022, within a short period of time, the technology company applied to register 12 “Changgao Dianxin” trademarks in multiple classes, and used the trademarks as intellectual property contributions to establish a trading company. Thereafter, the technology company and the trading company filed a lawsuit against the joint stock company on the ground of infringement of trademark rights and unfair competition, claiming RMB 10 million in damages.
After initiating supervision ex officio, the Changsha Municipal People’s Procuratorate investigated such facts as the companies’ business operations, history of trade name use, trademark registration background, and litigation motive. The procuratorial organ found that neither the technology company nor the trading company showed any obvious sign of production or business operations, had any record of employees participating in social insurance, and that their products did not comply with the relevant industry standards. The technology company had applied to register 129 trademarks within a short period of time, and most of the classes of goods approved for use of those trademarks were outside its business scope. More significantly, on the day after the joint stock company announced its change of name to “Changgao Dianxin”, the technology company applied to register the “Changgao Dianxin” trademark, and shortly after obtaining registration, filed a lawsuit claiming a large amount of damages. The procuratorial organ therefore held that the two companies had maliciously registered the trademarks without the purpose of use, that the rights basis had obvious defects, and that they subsequently filed suit based on such rights basis to seek improper benefits, constituting malicious litigation. The court ultimately ruled to dismiss the lawsuit and imposed a fine of RMB 100,000 for the malicious litigation conduct. Through collaboration among the procuratorial organ, the court, and administrative authorities, the China National Intellectual Property Administration also declared invalid 72 registered trademarks applied for by related affiliated companies.
This case has strong significance for rule extraction. First, it clarifies the standard for determining malicious litigation where a party “knows that its trademark was maliciously registered and that the rights basis is defective, but still files litigation to seek improper benefits”. Second, it examines trademark squatting, company establishment, intellectual property contribution, and litigation claims as an integrated chain of conduct, avoiding a fragmented assessment of each individual step. Third, this case reflects the coordination between civil procuratorial supervision and trademark administrative confirmation procedures. The governance of malicious litigation is not limited to correcting erroneous judgments in individual cases, but may also extend to clearing abnormal trademark registration resources, thereby reducing subsequent litigation risks and market interference.
V. Squatting Public Cultural and Tourism Marks and Suing Industry Operators: Abuse of Rights in the Context of Public Resource AttributesCase Five, “Procuratorial Supervision Case Concerning Malicious Litigation in a Dispute over Infringement of Trademark Rights Between a Chongqing Information Technology Co., Ltd. and a Chengdu Travel Agency”, expands the governance of malicious litigation to urban cultural and tourism marks with public resource attributes. Chongqing’s “Two Rivers Tour” night scenery has a profound historical and cultural background and is a representative cultural and tourism symbol of the city. The names of vessels such as “Jiaoyun Mingyue” and “Shiji Huihuang” had long been used by local Chongqing companies on “Two Rivers Tour” vessels and tourism transport services, and had been promoted as commercial marks for a long period of time, acquiring a certain degree of reputation in the industry. The Chongqing company was mainly engaged in website development and also conducted tourism business, but since 2017 it had repeatedly applied to register a large number of marks related to the “Two Rivers Tour” in multiple classes, including ships, ferries, yacht and boat charter services. After obtaining the trademarks, the company continuously collected information on travel companies operating “Two Rivers Tour” ticketing services on relevant tourism platforms, and filed multiple lawsuits on the ground of trademark infringement, resulting in some travel companies removing the relevant ticketing business, thereby affecting market order and consumer rights and interests.
After accepting the case, the Yuzhong District People’s Procuratorate, through inquiries of the parties and visits to cultural and tourism departments, found that the “Two Rivers Tour” series of marks had already been filed with the ship inspection department, had been actually used, and had acquired a certain degree of reputation. The procuratorial organ also verified the business transaction records and trademark license use statements submitted by the Chongqing company, and found that the relevant “trademark license fee” transaction records had been fabricated for the purpose of litigation, and that the company had not used the trademarks at issue in genuine production or business operations. The procuratorial organ therefore held that the company had maliciously applied to register and hoarded marks related to the “Two Rivers Tour”, abused its litigation rights to sue unspecified competitors in the same industry, and thereby constituted malicious litigation. The court ultimately found that the conduct constituted a typical abuse of rights, dismissed all of its claims, and dismissed the claims in the other six cases filed by the company.
The particular significance of this case lies in its emphasis on the public resource attributes of well-known cultural and tourism marks. Urban historical and cultural marks, names of well-known tourism projects, and long-established industry-generic or regional commercial marks often carry public interests and common market-use interests. If an individual entity transforms them into private rights tools through squatting and uses them to exclude normal operators, it will not only damage the interests of specific defendants, but also affect the order of the regional cultural and tourism market and consumer choice. This case indicates that, when examining trademark infringement litigation of this type, attention should be paid to whether the mark at issue has public resource attributes, whether there was prior use by others, whether the registrant has genuinely used the mark, and whether the litigation has produced a market-suppressing effect against unspecified operators.
Implications Taken together, the five cases show that the examination framework for procuratorial organs to punish malicious intellectual property litigation is gradually taking shape: First, whether the rights basis is legitimate and stable is the starting point for determining malicious litigation. Where a patent evaluation report shows that the claims do not meet the conditions for grant, a patent has been declared invalid, or a trademark was maliciously registered or hoarded, such circumstances may all point to material defects in the rights basis; Second, whether the plaintiff knew of such defects is an important condition for determining subjective malice. Filing suit despite knowledge of an unfavorable patent evaluation, concealing knowledge that a patent has been declared invalid, or claiming damages despite knowledge that a trademark was squatted all reflect the instrumentalization of litigation procedure; Third, whether there is genuine use and genuine business operation is a key fact in malicious trademark litigation. Bulk registration without use, no production or business premises, no employee social insurance, no genuine business transaction records, and frequent filing of lawsuits will generally make it difficult to find legitimate rights enforcement; Fourth, the purpose and effect of litigation should be included in the overall assessment. Whether the timing of the lawsuit closely coincides with the other party’s listing, financing, name change, or business milestones, whether the amount claimed is abnormal, and whether the litigation causes material harm to the other party’s commercial interests may all serve as important factors in determining malice; Fifth, the governance of malicious litigation requires the coordination of multiple supervisory means. For pending cases, procuratorial organs may transfer clues and remind courts to identify the conduct in accordance with the law. For erroneous effective judgments, correction may be made through retrial procuratorial recommendations or protests. For cases involving bulk trademark squatting and occupation of public resources, a coordinated mechanism among administrative authorities and courts is also necessary.
From a practical perspective, this batch of cases also provides direct guidance for enterprises in intellectual property rights enforcement and compliance management. For rights holders, before filing intellectual property litigation, they should carefully assess the stability of the rights basis, the legitimacy of how the rights were obtained, and the factual basis for the alleged infringement. Where patent rights or trademark rights are already subject to invalidation, cancellation, or revocation procedures, or have obvious defects, rights holders bear a duty of good faith to disclose the relevant facts in a timely and truthful manner. For trademark registrants, trademark portfolio planning should serve genuine business operations and brand protection. Bulk hoarding divorced from the purpose of use, and squatting of others’ commercial marks, may instead become important evidence for finding malice in subsequent litigation. For defendant enterprises, when facing abnormal intellectual property litigation, they should promptly organize defense materials concerning such matters as the stability of the rights, the plaintiff’s business operations, actual trademark use, the number of lawsuits filed, the timing of the lawsuit, the amount claimed, and the competitive relationship, and pay attention to protecting their rights and interests through procuratorial supervision, administrative confirmation procedures, counterclaims, and other avenues.
More broadly, the institutional significance of governing malicious intellectual property litigation lies in maintaining the credibility of the intellectual property protection system itself. Against the background of the continuously increasing intensity of intellectual property protection, judicial organs have also strengthened sanctions against infringement. Precisely for this reason, once the abuse of rights uses intellectual property litigation procedures to achieve a transfer of interests, it will weaken genuine innovators’ trust in the system and increase compliance costs and litigation risks for normal operators. By publishing this batch of typical cases, the Supreme People’s Procuratorate sends a clear signal to the market through case-based rules: intellectual property protection is based on good faith, and the exercise of rights must not depart from the basic requirements of genuine business operations, fair competition, and judicial integrity.
These cases cover multiple areas of intellectual property, including utility model patent rights, design patent rights, trademark rights, and unfair competition. Viewed as a whole, these cases clarify the path for examining and determining “malice”. Procuratorial organs did not treat the plaintiff’s loss of the case, instability of the rights basis, or a relatively high amount claimed as the sole basis for determining malicious litigation. Instead, through a penetrating review, they comprehensively examined such factors as the process by which the rights were obtained, the stability of the rights, whether there was genuine use, whether there was an act of infringement, the plaintiff’s production and business operations, the number of lawsuits filed, the timing of filing suit, the amount claimed, the competitive relationship with the defendant, and the actual harm that the litigation might cause. On this basis, procuratorial organs, through such means as transferring clues, issuing retrial procuratorial recommendations, filing protests, conducting follow-up supervision, and engaging in multi-departmental collaboration, achieved prior warning, in-process supervision, and ex post correction of malicious litigation.
The following is an introduction to and summary of the five case studies.
I. Filing Patent Litigation at a Critical Listing Stage: In-Process Supervision of Competitive Malicious Litigation “Procuratorial Supervision Case Concerning Malicious Litigation in a Dispute over Infringement of Utility Model Patent Rights Between a Foshan Intelligent Equipment Co., Ltd. and a Wuxi Mechanical Technology Co., Ltd.”, is a case of malicious patent litigation arising against the background of a competitor’s critical listing stage. The Wuxi company was a high-tech enterprise engaged in the research and development, production, and sale of automated material processing system equipment, with a large number of patents and software copyrights, and was in the process of applying for listing. The Foshan company and the Wuxi company were in the same field, had a competitive relationship, and had repeatedly bid for the same projects. In January 2023, the Foshan company filed a lawsuit against the Wuxi company on the ground that the latter had infringed its utility model patent rights, claiming RMB 23 million in damages. That amount happened to exceed 10% of the absolute value of the Wuxi company’s net assets disclosed for the relevant period, thereby constituting a material litigation matter subject to disclosure, which caused the Wuxi company’s listing process to be suspended.
After discovering clues to the case in the course of performing its duties, the Wuxi Municipal People’s Procuratorate conducted an investigation focusing on the rights basis, the facts of infringement, the litigation motive, and the actual harm. The procuratorial organ found that, before filing suit, the Foshan company had itself applied to the China National Intellectual Property Administration for an evaluation report on the patent at issue, and that the evaluation report found that all claims failed to meet the conditions for the grant of a patent right. At the same time, the Wuxi company had already entrusted a supplier to manufacture the same product before the filing date of the patent at issue, and there was no fact of infringement by the Wuxi company. Taking into account the competitive relationship between the parties, the timing of the lawsuit, the amount claimed, and the impact on the listing process, the procuratorial organ concluded that the Foshan company had obvious subjective malice, and transferred the clues to the court, reminding the court to identify the circumstances in a timely manner and punish the conduct in accordance with the law.
The typical significance of this case lies in its examination of malicious intellectual property litigation in connection with capital-market milestones and commercial competition strategies. Intellectual property litigation may have a significant impact on corporate financing, listing review, goodwill, and market cooperation. Where a plaintiff, knowing that the rights basis has material defects, nevertheless chooses to file high-value litigation at a competitor’s listing, financing, or major transaction stage, its litigation conduct bears the character of competitive suppression beyond the scope of ordinary rights enforcement. This case indicates that the determination of malicious litigation should not remain at the level of formal rights, but should instead comprehensively analyze the function and consequences of the litigation conduct in its commercial context. The procuratorial organ’s intervention by transferring clues while the case was still pending also reflects the important value of in-process supervision in preventing the harm of malicious litigation from expanding.
II. Concealing the Invalidity of a Patent and Continuing Litigation: The Boundary of the Duty of Good Faith in Litigation “Procuratorial Supervision Case Concerning Malicious Litigation in a Dispute over Infringement of Design Patent Rights Between He and a Yiwu Import and Export Co., Ltd.”, mainly concerns the issue of a rights holder deliberately concealing the fact that a patent had been declared invalid and continuing the litigation. After obtaining a design patent for a body-shaping garment, He purchased relevant products through an online platform and had the purchase process notarized, and subsequently filed multiple lawsuits on the ground of infringement of design patent rights. In this case, the court had found the patent at issue to be valid and ordered the Yiwu company to cease infringement and compensate losses and reasonable expenses. After the judgment became effective, the Yiwu company did not appeal.
A subsequent investigation by the Hangzhou Municipal People’s Procuratorate found that, during the litigation, a non-party had filed a request with the China National Intellectual Property Administration for a declaration of invalidity of the patent at issue, and that He not only submitted a written statement of opinions but also participated in the oral hearing. In July 2019, the China National Intellectual Property Administration rendered a decision declaring the design patent at issue invalid in its entirety, and mailed the decision to He. Although He knew that the patent had been declared invalid, He failed to truthfully disclose that fact to the trial court, continued to advance the litigation, obtained several effective judgments, and even applied for compulsory enforcement. After the Zhejiang procuratorial organs filed a protest, the Zhejiang High People’s Court adopted the protest opinion, revoked the original judgment, dismissed He’s lawsuit, and found that He’s conduct constituted an act obstructing civil proceedings, imposing a fine of RMB 50,000.
This case clarifies the boundary of the duty to disclose the legal status of rights in patent infringement litigation. According to the relevant judicial interpretation, where the claims asserted by the rights holder in patent infringement litigation have been declared invalid by the patent administration department under the State Council, the people’s court hearing the patent infringement dispute may rule to dismiss the rights holder’s lawsuit based on such invalid claims; if there is evidence proving that the decision declaring the claims invalid has been revoked by an effective administrative judgment, the rights holder may file a separate lawsuit. Accordingly, whether the patent right remains valid directly affects whether the infringement litigation may continue to be heard. Where a rights holder knows that the patent right has been declared invalid but deliberately conceals that fact and uses the court’s information asymmetry regarding the legal status of the right to obtain a favorable judgment, such conduct has gone beyond ordinary litigation strategy and constitutes a violation of the duty of good faith in litigation. This case shows that the “malice” in malicious litigation may be reflected not only in filing suit while knowing that the rights basis is defective, but also in continuing to use the procedure for gain during the litigation despite knowing that the rights basis has already been lost.
III. Litigation for Profit After Bulk Trademark Registration: From Abnormal Rights Enforcement to Follow-Up Supervision Case Three, “Procuratorial Supervision Case Concerning Malicious Litigation in a Dispute over Infringement of Trademark Rights Between a Shenzhen Investment Co., Ltd. and a Wenzhou Household Products Co., Ltd. and He”, reflects the typical pattern of bulk trademark registration and hoarding followed by litigation for profit. After obtaining a registered trademark approved for use on pillows and other goods in Class 20, the Shenzhen company filed trademark infringement litigation against the Wenzhou company in relation to latex pillow products sold by the latter, and obtained support at first instance. The court ordered the Wenzhou company to cease infringement and compensate RMB 75,000, and ordered the legal representative of the Wenzhou company to bear joint and several liability.
In the course of performing its duties, the Rui’an Municipal People’s Procuratorate discovered abnormal clues relating to the Shenzhen company’s bulk rights enforcement, and further reviewed litigation files, searched litigation data, and verified the facts with the market regulation department. The investigation showed that the Shenzhen company had applied to register more than 600 trademarks across different classes of goods, and since 2019 had sued multiple latex product companies in Zhejiang Province. The company had no actual production or business premises, no production or business activities, and no conditions for production or business operations, and its registered trademarks had not been actually used in production or business activities. At the same time, the trademark at issue was later declared invalid by the China National Intellectual Property Administration, and the relevant administrative litigation also resulted in judgments at two levels upholding the invalidation conclusion. Taking into account the number of trademarks registered by the company, its production and business operations, the number of lawsuits filed, and its litigation motive, the procuratorial organ found that it had filed the lawsuit maliciously. Because the court initially did not adopt the retrial procuratorial recommendation, the procuratorial organ subsequently advanced the supervision through a protest filed by the procuratorial organ at the next higher level, and the Wenzhou Intermediate People’s Court ultimately revoked the original judgment upon retrial and dismissed the Shenzhen company’s lawsuit.
The value of this case lies in highlighting the significance of examining “registration without use” in malicious trademark litigation. The institutional basis of trademark rights lies in identifying the source of goods or services, rather than providing a tool for litigation claims detached from genuine business activities. The bulk registration of trademarks, lack of genuine use, and frequent filing of lawsuits against operators in the same industry often indicate that the rights holder has no normal market operation intent, but has instead transformed trademark registration into a resource for litigation profit. The procuratorial organ’s use of big data screening in this case to discover abnormal litigation clues also provides methodological support for the governance of bulk rights enforcement and professionalized claims. It is particularly worth noting that this case also reflects the necessity of the follow-up supervision mechanism: where a lower-level procuratorial organ’s retrial procuratorial recommendation has not been adopted and there is a genuine possibility of an erroneous judgment, a protest lawfully filed by a higher-level procuratorial organ helps ensure the continuity and effectiveness of supervision.
IV. High-Value Claims After Malicious Registration of Commercial Marks: Penetrating Review of Defects in the Rights Basis Case Four, “Procuratorial Supervision Case Concerning Malicious Litigation in a Dispute over Trademark Rights and Unfair Competition Between a Digital Technology Co., Ltd. and a Technology Co., Ltd.”, likewise concerns the issue of maliciously registering a trademark and then suing the true user of the commercial mark. The joint stock company was established in 1998, had long used “Changgao” as its trade name, and had registered a series of “Changgao” trademarks on goods related to electric power equipment since 2006. In 2022, within a short period of time, the technology company applied to register 12 “Changgao Dianxin” trademarks in multiple classes, and used the trademarks as intellectual property contributions to establish a trading company. Thereafter, the technology company and the trading company filed a lawsuit against the joint stock company on the ground of infringement of trademark rights and unfair competition, claiming RMB 10 million in damages.
After initiating supervision ex officio, the Changsha Municipal People’s Procuratorate investigated such facts as the companies’ business operations, history of trade name use, trademark registration background, and litigation motive. The procuratorial organ found that neither the technology company nor the trading company showed any obvious sign of production or business operations, had any record of employees participating in social insurance, and that their products did not comply with the relevant industry standards. The technology company had applied to register 129 trademarks within a short period of time, and most of the classes of goods approved for use of those trademarks were outside its business scope. More significantly, on the day after the joint stock company announced its change of name to “Changgao Dianxin”, the technology company applied to register the “Changgao Dianxin” trademark, and shortly after obtaining registration, filed a lawsuit claiming a large amount of damages. The procuratorial organ therefore held that the two companies had maliciously registered the trademarks without the purpose of use, that the rights basis had obvious defects, and that they subsequently filed suit based on such rights basis to seek improper benefits, constituting malicious litigation. The court ultimately ruled to dismiss the lawsuit and imposed a fine of RMB 100,000 for the malicious litigation conduct. Through collaboration among the procuratorial organ, the court, and administrative authorities, the China National Intellectual Property Administration also declared invalid 72 registered trademarks applied for by related affiliated companies.
This case has strong significance for rule extraction. First, it clarifies the standard for determining malicious litigation where a party “knows that its trademark was maliciously registered and that the rights basis is defective, but still files litigation to seek improper benefits”. Second, it examines trademark squatting, company establishment, intellectual property contribution, and litigation claims as an integrated chain of conduct, avoiding a fragmented assessment of each individual step. Third, this case reflects the coordination between civil procuratorial supervision and trademark administrative confirmation procedures. The governance of malicious litigation is not limited to correcting erroneous judgments in individual cases, but may also extend to clearing abnormal trademark registration resources, thereby reducing subsequent litigation risks and market interference.
V. Squatting Public Cultural and Tourism Marks and Suing Industry Operators: Abuse of Rights in the Context of Public Resource AttributesCase Five, “Procuratorial Supervision Case Concerning Malicious Litigation in a Dispute over Infringement of Trademark Rights Between a Chongqing Information Technology Co., Ltd. and a Chengdu Travel Agency”, expands the governance of malicious litigation to urban cultural and tourism marks with public resource attributes. Chongqing’s “Two Rivers Tour” night scenery has a profound historical and cultural background and is a representative cultural and tourism symbol of the city. The names of vessels such as “Jiaoyun Mingyue” and “Shiji Huihuang” had long been used by local Chongqing companies on “Two Rivers Tour” vessels and tourism transport services, and had been promoted as commercial marks for a long period of time, acquiring a certain degree of reputation in the industry. The Chongqing company was mainly engaged in website development and also conducted tourism business, but since 2017 it had repeatedly applied to register a large number of marks related to the “Two Rivers Tour” in multiple classes, including ships, ferries, yacht and boat charter services. After obtaining the trademarks, the company continuously collected information on travel companies operating “Two Rivers Tour” ticketing services on relevant tourism platforms, and filed multiple lawsuits on the ground of trademark infringement, resulting in some travel companies removing the relevant ticketing business, thereby affecting market order and consumer rights and interests.
After accepting the case, the Yuzhong District People’s Procuratorate, through inquiries of the parties and visits to cultural and tourism departments, found that the “Two Rivers Tour” series of marks had already been filed with the ship inspection department, had been actually used, and had acquired a certain degree of reputation. The procuratorial organ also verified the business transaction records and trademark license use statements submitted by the Chongqing company, and found that the relevant “trademark license fee” transaction records had been fabricated for the purpose of litigation, and that the company had not used the trademarks at issue in genuine production or business operations. The procuratorial organ therefore held that the company had maliciously applied to register and hoarded marks related to the “Two Rivers Tour”, abused its litigation rights to sue unspecified competitors in the same industry, and thereby constituted malicious litigation. The court ultimately found that the conduct constituted a typical abuse of rights, dismissed all of its claims, and dismissed the claims in the other six cases filed by the company.
The particular significance of this case lies in its emphasis on the public resource attributes of well-known cultural and tourism marks. Urban historical and cultural marks, names of well-known tourism projects, and long-established industry-generic or regional commercial marks often carry public interests and common market-use interests. If an individual entity transforms them into private rights tools through squatting and uses them to exclude normal operators, it will not only damage the interests of specific defendants, but also affect the order of the regional cultural and tourism market and consumer choice. This case indicates that, when examining trademark infringement litigation of this type, attention should be paid to whether the mark at issue has public resource attributes, whether there was prior use by others, whether the registrant has genuinely used the mark, and whether the litigation has produced a market-suppressing effect against unspecified operators.
Implications Taken together, the five cases show that the examination framework for procuratorial organs to punish malicious intellectual property litigation is gradually taking shape: First, whether the rights basis is legitimate and stable is the starting point for determining malicious litigation. Where a patent evaluation report shows that the claims do not meet the conditions for grant, a patent has been declared invalid, or a trademark was maliciously registered or hoarded, such circumstances may all point to material defects in the rights basis; Second, whether the plaintiff knew of such defects is an important condition for determining subjective malice. Filing suit despite knowledge of an unfavorable patent evaluation, concealing knowledge that a patent has been declared invalid, or claiming damages despite knowledge that a trademark was squatted all reflect the instrumentalization of litigation procedure; Third, whether there is genuine use and genuine business operation is a key fact in malicious trademark litigation. Bulk registration without use, no production or business premises, no employee social insurance, no genuine business transaction records, and frequent filing of lawsuits will generally make it difficult to find legitimate rights enforcement; Fourth, the purpose and effect of litigation should be included in the overall assessment. Whether the timing of the lawsuit closely coincides with the other party’s listing, financing, name change, or business milestones, whether the amount claimed is abnormal, and whether the litigation causes material harm to the other party’s commercial interests may all serve as important factors in determining malice; Fifth, the governance of malicious litigation requires the coordination of multiple supervisory means. For pending cases, procuratorial organs may transfer clues and remind courts to identify the conduct in accordance with the law. For erroneous effective judgments, correction may be made through retrial procuratorial recommendations or protests. For cases involving bulk trademark squatting and occupation of public resources, a coordinated mechanism among administrative authorities and courts is also necessary.
From a practical perspective, this batch of cases also provides direct guidance for enterprises in intellectual property rights enforcement and compliance management. For rights holders, before filing intellectual property litigation, they should carefully assess the stability of the rights basis, the legitimacy of how the rights were obtained, and the factual basis for the alleged infringement. Where patent rights or trademark rights are already subject to invalidation, cancellation, or revocation procedures, or have obvious defects, rights holders bear a duty of good faith to disclose the relevant facts in a timely and truthful manner. For trademark registrants, trademark portfolio planning should serve genuine business operations and brand protection. Bulk hoarding divorced from the purpose of use, and squatting of others’ commercial marks, may instead become important evidence for finding malice in subsequent litigation. For defendant enterprises, when facing abnormal intellectual property litigation, they should promptly organize defense materials concerning such matters as the stability of the rights, the plaintiff’s business operations, actual trademark use, the number of lawsuits filed, the timing of the lawsuit, the amount claimed, and the competitive relationship, and pay attention to protecting their rights and interests through procuratorial supervision, administrative confirmation procedures, counterclaims, and other avenues.
More broadly, the institutional significance of governing malicious intellectual property litigation lies in maintaining the credibility of the intellectual property protection system itself. Against the background of the continuously increasing intensity of intellectual property protection, judicial organs have also strengthened sanctions against infringement. Precisely for this reason, once the abuse of rights uses intellectual property litigation procedures to achieve a transfer of interests, it will weaken genuine innovators’ trust in the system and increase compliance costs and litigation risks for normal operators. By publishing this batch of typical cases, the Supreme People’s Procuratorate sends a clear signal to the market through case-based rules: intellectual property protection is based on good faith, and the exercise of rights must not depart from the basic requirements of genuine business operations, fair competition, and judicial integrity.