1. The Three-Pillar Defense Strategy
When a WFOE discovers a counterfeit (patent, trademark, or trade secret infringement), the law provides three distinct avenues for recourse:
A. Administrative Enforcement (The "Speed" Route)
Action: Report to the Market Supervision Administration (MSA) or China Customs.
Result: Raid of the infringer’s warehouse, seizure of goods, and administrative fines.
Benefit: Fast and cost-effective. Excellent for stopping a competitor from selling at a trade fair or clearing out a local market.
B. Criminal Prosecution (The "Punishment" Route)
Action: File a case with the Public Security Bureau (PSB).
Threshold: Only for "large-scale" counterfeiting (usually sales exceeding 50,000 RMB).
Result: Arrests, prison sentences, and permanent destruction of manufacturing equipment.
C. Civil Litigation (The "Recovery" Route)
Action: Sue in a specialized IP Court (Beijing, Shanghai, or Guangzhou).
Result: Injunctions (stop orders) and monetary damages.
The 2026 Game Changer: Punitive Damages. Under the PRC Civil Code, if the infringement is "intentional" and "serious," the court can award 1 to 5 times the actual damages.
2. Case Studies: Foreign Victories in China
Case 1: Adidas vs. "Adivon" (Trademark & Brand Confusion)
The Conflict: A local Chinese brand "Adivon" (阿迪王) used a triangle logo and name extremely similar to Adidas. For years, they dominated lower-tier cities.
The Outcome: After a long-term legal battle, Adidas secured a settlement where Adivon was forced to transfer its trademarks to Adidas and stop using the "Adivon" name and logo entirely.
Legal Lesson: Persistence pays off. Chinese courts now recognize that "Confusingly Similar" marks harm the market order even if they aren't exact copies.
Case 2: Nike vs. "Kobe" Squatters (Name Rights)
The Conflict: A Chinese individual registered "Kobe" and "KB-KOBE" for suitcases and wallets. Nike (representing Kobe Bryant's IP) sued to revoke these marks.
The Outcome: While Nike initially lost some rounds because the squatter registered in classes Nike didn't use, recent rulings have strengthened "Famous Mark" protection.
Legal Lesson: If your brand is "Well-Known" (驰名商标), you can block registrations in classes you don't even operate in.
Case 3: 3M vs. Blatant Counterfeiters (The Power of Punitive Damages)
The Conflict: A Chinese company intentionally used the "3M" mark on reflective tape. They refused to provide financial records to the court.
The Outcome: The Supreme People's Court applied Punitive Damages, awarding 3M over $500,000 USD—an amount that exceeded the standard statutory limit—because the infringement was "malicious."
3. Strategic Advice for [www.hirelawfirm.cn] Clients
| Step | Action | Why it Matters |
| 1. Evidence Preservation | Conduct "Notarized Purchases" (公证购买). | Courts only accept evidence that has been verified by a Chinese notary. |
| 2. Asset Freeze | File for "Property Preservation." | Freeze the infringer's bank account before they can hide the money. |
| 3. Customs Recordal | Register your IP with China Customs. | They will block counterfeit exports at the border before they reach the global market. |
| 4. Technical Audit | For patent infringement, hire a certified appraiser. | Precise technical comparison is the only way to win a patent suit in 2026. |
Summary of Legal Remedies
"In 2026, the best defense is a strong offense. Don't just send a Cease and Desist letter; back it up with a Property Preservation order to hit the infringer where it hurts—their bank account."
