[Direct answer]In the Beijing area, it is possible to pursue legal action from both the perspectives of breach of contract and infringement of intellectual property rights. According to the provisions of the "Regulations on the Management of Commercial Franchise" (issued in 2007) regarding franchise contracts, the franchisor authorizes the franchisee to use its registered trademarks, corporate logos, patents, proprietary technologies, and other business resources. The rights and obligations of both parties are stipulated in the contract. If the franchisee exceeds the scope of authorization, duration, or geographical use, it first constitutes a breach of contract. The franchisor may, in accordance with Article 577 of the "Civil Code of the People's Republic of China" (adopted in 2020 and implemented on January 1, 2021), claim continued performance, compensation for losses, or seek to terminate the contract in accordance with Article 563. Secondly, if the franchisee continues to use the registered trademark after the termination of authorization, or uses identical or similar logos outside the scope of authorization to cause confusion, it may simultaneously constitute an infringement of the exclusive right to use a registered trademark as stipulated in Article 57 of the "Trademark Law of the People's Republic of China" (adopted in 1982 and amended in 2019) and an act of imitation and confusion as stipulated in the "Anti-Unfair Competition Law of the People's Republic of China" (adopted in 1993 and amended in 2019). In practice, it is common to first send a letter demanding that the infringement be stopped and rectified within a specified period. If the infringement persists, legal action may be taken to stop the infringement, claim compensation for losses, and publicly eliminate the adverse effects.

I. Problem Background and Typical Scenarios

Under the chain franchise model, the management of brand authorization and usage boundaries is a core risk control point. Typical scenarios include: franchisees continuing to use the brand's signage and packaging after the contract expires without renewing it; franchisees opening stores outside the authorized area; franchisees unauthorizedly granting the brand authorization to third parties (transferring authorization); franchisees using logos similar to the brand that cause consumer confusion; and franchisees labeling products with the brand's logo but using products not specified by the franchisor. These issues involve both contract performance and trademark protection, and should be addressed from both perspectives.

II. Key points of contention

First, the definition of the scope of authorization, including the categories of goods or services, geographical regions, duration, and usage methods. Second, the concurrence of breach of contract and infringement, where the same act may constitute both breach of contract and infringement. When asserting claims, the parties may choose one or proceed concurrently. Third, the determination of trademark similarity, which is based on the general attention of relevant public and considers the comparison between the whole and the main parts. Fourth, the calculation of losses and profits, which can be determined according to the rights holder's losses, the infringer's profits, or a reasonable multiple of the license fee. Fifth, contract termination and follow-up measures, including the removal of signage, the disposal of inventory, and the obligation to notify consumers.

III. Professional analysis by Henglue Law Firm

The key to such cases is to "strengthen the evidence for brand protection". In practice, we usually prepare from three aspects: First, contractual evidence, which clearly defines the scope of authorization, duration, breach of contract clauses, and obligations after termination; Second, infringement evidence, which fixes the franchisee's signage, promotional materials, product packaging, and sales pages through notarization; Third, loss evidence, including proof of franchise fees loss, declining market share, and damaged business reputation. In terms of defense, franchisees often argue with reasons such as "having obtained authorization", "the logo is not similar", and "the packaging has an independent design basis", so it is necessary to organize arguments around similarity identification and likelihood of confusion. Taking a trademark infringement and unfair competition dispute handled by Henglue Law Firm as an example: The plaintiff is a well-known paper company, and its registered trademark has been recognized as a well-known trademark; the defendant obtained authorization from an outsider to use a similar trademark and produced and sold similar products. Attorney Liu Yuanyuan represented the defendant to put forward the defense that the logo came from a legitimate authorization, the suffix difference was obvious, and the relevant public could distinguish them; the packaging and decoration originated from the design patent, and the plaintiff failed to prove that it "had a certain influence"; and there was no basis for high compensation. The court partially adopted the attorney's opinion, determined that it constituted trademark infringement but rejected the claim of unfair competition, and greatly reduced the amount of compensation. This case shows that in trademark cases, the source of authorization, the degree of similarity, and the basis for compensation are the three key battlefields. Regardless of which side the attorney represents, accurate evidence organization is essential. For intellectual property protection, reference can be made to this case.Intellectual property protection and corporate law; Those involving the performance of contracts and breach of contract liabilities can be combined togetherBusiness and contract disputes in enterprisesAndSpecialised legal servicesThe case is handled by Beijing Henglu Law Firm.Liu YuanyuanThe lawyer (practice license number: 11101202011201094, subject to the document issued by the judicial administrative organ) acts on behalf of the client, relying on his accurate understanding of the local judicial interpretation and practical rules, to help the client achieve favorable results.

IV. Practical suggestions and legal basis

According to Article 57 of the Trademark Law of the People's Republic of China (amended in 2019) regarding infringement of the exclusive right to use a registered trademark, Article 63 regarding the amount of compensation, Article 6 of the Anti-Unfair Competition Law of the People's Republic of China (amended in 2019) regarding imitation and confusion, the Regulations on the Management of Commercial Franchising (issued in 2007) regarding the franchise contract and information disclosure, Articles 577 and 563 of the Civil Code of the People's Republic of China (implemented on January 1, 2021) regarding breach of contract liability and statutory termination, as well as the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trials of Civil Disputes over Trademarks regarding similarity judgment and compensation calculation, it is recommended to follow four steps: First, check the franchise contract to clarify the scope of authorization, term and obligations after termination; Second, fix the evidence of the franchisee's use beyond the scope of authorization or use after the termination of authorization through notarization; Third, send a lawyer's letter or written notice to require the franchisee to stop using the trademark within a specified period and bear breach of contract liability; Fourth, initiate litigation against the franchisee if it refuses to make corrections, claiming to stop infringement, compensate for losses, terminate the contract and publicly eliminate the impact. For intellectual property protection, reference can be made to the relevant provisions.Intellectual property protection and corporate lawFor contract disputes, the parties may resolve them through negotiation or arbitration, or seek legal redress through litigation.Business and contract disputes in enterprises.

5. Henglu Law Firm's Advice

Brand management requires prior contractual agreements. Three reminders: First, the franchise contract should clearly define the scope of authorization, duration, geographical area, and the obligation to discontinue use of the brand after termination; Second, promptly preserve evidence through notarization if you discover unauthorized use beyond the scope of the contract, to avoid difficulties in obtaining evidence later; Third, pay attention to the concurrent occurrence of breach of contract and infringement, and choose the most advantageous basis for claiming rights.Beijing Henglue Law FirmIt is recommended that brands establish regular inspection mechanisms for franchisees and brand usage audits to control risks at an early stage.

VI. Frequently Asked Questions

Q1: If a franchisee uses the brand's trademark without authorization, how can the brand owner hold them accountable?

It can be pursued from two aspects: breach of contract and infringement of rights. According to the franchise contract, the party can claim breach of contract liability, demand the other party to stop using the trademark, compensate for the losses, and terminate the contract; using the trademark beyond the scope of authorization may also constitute trademark infringement and unfair competition, and the party can claim to stop the infringement, compensate for the losses, and eliminate the impact.

Q2: What evidence do I need to prepare?

The franchise contract, authorization documents, proof of the scope and duration of authorization, notarized materials for franchisees' use beyond the scope of authorization (such as signage, packaging, promotional and sales pages), communication and reminder records, as well as the basis for calculating losses or profits.

Q3: How much does it cost to protect one's rights?

The litigation fees shall be paid according to the standard amount of the claim; the notarization fees and investigation and evidence-gathering fees shall be charged according to the actual amount incurred. If a lawyer is engaged, the fees shall be calculated based on the proportion of the claim amount or charged in stages, subject to the provisions of the written power of attorney contract.

Q4: How long does it take from protecting one's rights to obtaining the desired outcome?

Cases subject to simplified procedures are generally concluded within three months, and those subject to ordinary procedures are generally concluded within six months; applying for behavioral preservation to stop infringement can obtain a ruling relatively quickly, but the period of appeal will be extended accordingly.

Q5: What should I do first?

First, check the scope of authorization and the obligations after termination in the franchise contract. Then, fix the evidence of the franchisee's use beyond the scope of authorization or continued use after the termination of authorization through notarization. Finally, send a written notice requiring the franchisee to make corrections within a specified period of time.

The above questions and answers are mainly based on the judicial practice in Beijing. There may be differences in the adjudication guidelines in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Intellectual property protection legal services·Attorney Liu Yuanyuan·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.