In China, the cease and desist letter is commonly used to
warn infringers. Experience showed that you may have 50% of
chance to get a reply to your cease and desist letter. The
cease and desist letter usually works well with straightforward
counterfeit case and against small infringers. When it comes to
complicated case and big infringer, it is critical that you
carefully evaluate the risk of being sued before sending out
the cease and desist letter.
The recognition of non-infringement
The recognition of non-infringement lawsuit was first
accepted in a patent case in 2002. Then Article 18 of the
SPC's Judicial Interpretation on Several Issues Concerning
the Hearing of Patent Infringement Cases (2010) set up the
procedural requirements: 1) the right owner sends the cease and
desist letter; 2) the recipient urges the right owner to file
the civil lawsuit; 3) the right owner does not withdraw the
cease and desist letter or does not file the civil lawsuit
within a reasonable period; 4) the recipient can then file a
recognition of non-infringement lawsuit.
Now, the recognition of non-infringement lawsuit extends to
all IP cases, and the courts are lowering the procedural
requirements: the recipient is sometimes allowed to file a
lawsuit as soon as it receives the cease and desist letter.
The biggest inconvenience of being sued for non-infringement
is that, you lose the control of the lawsuit: 1) you have no
more choice of the jurisdiction which is very important in a
lawsuit strategy; 2) you have limited time to prepare the
evidences, and sometime even worse, the evidences will
disappear if you did not secure them before sending the cease
and desist letter.
In the Honda case (selected in the 2015 top ten IP cases by
the SPC), Honda sent cease and desist letter to Shuanghuan, a
Chinese car maker based in Shijiazhuang city, and its
distributors, asking for immediate cease of design patent
infringement. Shuanghuan filed non infringement lawsuit in
Shijiazhuang in October 2003. Hongda then filed infringement
lawsuit in Beijing in November 2003, claiming huge damages (RMB
3.4 billion). According to the SPC's first-file principle,
Beijing High Court transferred the infringement case to
Shijiazhuang Intermediate Court in 2004 for a combined
In the meanwhile, Shuanghuan filed invalidation action in
December 2003, and successfully cancelled Honda's patents in
In April 2008 and then in April 2013, Shuanghuan lodged
additional claims requiring Hongda to pay RMB 3.6 billion for
the damages caused by the cease and desist letters.
Finally, in December 2015, the SPC decided that Hongda shall
pay RMB 16 million for the damages caused to Shuanghuan.
How to use the cease and desist
It is recommended to make a website notarization and/or
notarized purchase before sending a cease and desist
If the infringer ignores the cease and desist letter, you
can arrange another round of notarization to prove the
infringer's bad faith, and then file the lawsuit.
For complicated and important case, it is advisable to do
the forum shopping and directly file the civil action without
sending the cease and desist letter.