Specialist Chapter: Proposed Revisions to China’s Trademark Law Take Aim at Bad-Faith Applications and Boost Protection

In summary

In light of the new draft revision of the Trademark Law, which aims to further combat bad-faith applications and protect the trademark rights of lawful owners, this article introduces the trademark infringement judgment criteria and elements under the Chinese legal system. It provides a helpful guide for rights holders to protecting their trademarks in mainland China.

Discussion points

• Determination of trademark use
• Determination of identical trademarks
• Determination of the same kinds of goods or services
• Introduction of confusing similarity criterion

Referenced in this article

• Articles 48, 52(1), 57(1) and 57(2) of the Trademark Law

The current Trademark Law, as amended in 2019,^[1] prohibits malicious trademark applications and enhances protections against infringers in civil trademark infringement litigation. A draft of a revision to the Law that aims to further combat bad-faith applications and protect trademarks is currently under discussion. According to the Trademark Law, the maximum statutory damages that can be awarded in trademark infringement lawsuits is 5 million yuan and punitive damages could be one to five times the amount of the damage. As the draft revision and new judicial interpretations are continuously being revised to strengthen trademark protections, trademark infringement litigation is becoming more crucial. A comprehensive knowledge of civil trademark infringement judgment criteria and elements is becoming increasingly important.

Trademark use

To determine whether trademark infringement has occurred, whether the allegedly infringing mark has been used as a trademark in the meaning of the Trademark Law must be ascertained. Case law suggests that people’s courts usually hold that when judging whether a person has engaged in an act of infringing an exclusive right to use a registered trademark, the judgment should be based on the premise that the person has used a specific mark as a trademark. If such use does not have the effect of identifying the source of the goods or services, the mark has not been used as a trademark, so it should not be judged as an act that infringes the exclusive right of the registered trademark owner.

According to article 48 of the Trademark Law, the term ‘use of a trademark’ refers to the use of a trademark:

• on commodities, packaging or containers of commodities and commodity transaction documents; or
• in advertising, exhibition or other commercial activities to identify the source of a commodity.

In the process of specific infringement judgment, a comprehensive assessment should be made in combination with information regarding the general cognition level of the public related to the goods identified by the specific mark, the common use mode in the relevant field and the specific display form of the specific mark.

To reach a determination of trademark use, the infringer must:

• be using the trademark in commercial activities;
• have, subjectively, a real intention to use the trademark; and
• be using, objectively, infringing labels to indicate the source of the relevant goods or services.

Under article 57 of the Trademark Law, any of the following acts shall be deemed infringement the exclusive right to use a registered trademark:

• use of a trademark identical to a registered trademark on the same type of commodity without having been licensed by the trademark registrant;
• use of a trademark similar to a registered trademark on the same type of commodity without having been licensed by the trademark registrant, or use of a trademark that is identical or similar to the registered trademark on similar commodities that easily causes confusion;
• sale of commodities that infringe upon exclusive rights to use registered trademarks;
• forgery or unauthorised manufacturing of labels of another person’s registered trademark, or sale of forged or unauthorised labels of another person’s registered trademark;
• alteration of a registered trademark without the consent of the trademark registrant and sale of commodities bearing the altered trademark in the market;
• intentional facilitation of an infringement of another person’s exclusive rights to use trademarks or assisting in the facilitation thereof; and
• causing harm to another person’s exclusive rights to use registered trademarks.

Trademark infringement judgment rules

Article 57(1)

Under article 57(1) of the Trademark Law, there are two elements to the trademark infringement judgment rules. It must be determined whether:

• the alleged infringing mark is the same as the registered trademark; and
• the goods or services under the allegedly infringing mark belong to the same kinds of goods or services approved for use by the registered trademark.

Determination of identical trademarks

According to article 9 of the Interpretation of the Supreme People’s Court on Several Issues Relating to the Application of Law in the Trial of Trademark Civil Dispute Cases (the Interpretation), if the registered trademark (as prescribed in article 52(1) of the Trademark Law) is compared with the allegedly infringing mark and the two are visually identical, the trademarks are determined to be identical. In practice, the marks are determined to be identical if:

• an alleged infringement of a logo in font, letter case or horizontal and vertical arrangement of text, among other aspects, is only slightly different to the registered trademark’s logo when the two are compared;
• the alleged infringing mark has alterations to the spacing between words, letters, numbers, etc, but the alterations do not affect the significant characteristics of the registered trademark; and
• the colours of the alleged infringing mark only have been changed compared to the registered trademark.

Determination of the same kinds of goods or services

The service name provided by the suspected infringer and the service name approved by others, or if the two service names are different but the purpose, content, method, provider, object, place and other aspects of the service are the same or basically the same in the opinion of the relevant public, are aspects that are generally considered when determining if the same kind of service criterion applies.

If commodities are being disputed, a determination is made regarding whether they are the same or basically the same in terms of function, use, main raw materials, production departments, consumption objects and sales channels (among other aspects), and whether the relevant public considers the commodities to be the same.

As such, one must first determine whether the names of the goods or services are the same between the registered trademark and the infringing trademark. If not, the differences between the goods or services need to be identified.

Article 57(2)

Under article 57(2) of the Trademark Law, trademark infringement can be divided into three situations:

• The allegedly infringing mark is the same as the trademark of the registered owner, and the goods or services on which the allegedly infringing mark is located are similar to the goods or services approved for use by the registered trademark owner.
• The allegedly infringing mark is similar to the trademark of the registered owner, and the goods or services on which the allegedly infringing mark is located are the same as the goods or services approved for use by the registered trademark owner.
• The allegedly infringing mark is similar to the trademark of the registered owner, and the goods or services on which the allegedly infringing mark is located are similar to the goods or services approved for use by the registered trademark owner.

Confusing similarity criterion

According to the provisions of article 10 of the Interpretation, the people’s courts determine that trademarks are identical or similar in accordance with the following principles:

• taking the general attention of the relevant public as the standard;
• both the overall composition of the trademarks and the main parts of the trademarks should be compared, and the comparison should be carried out separately and isolated from the objects of comparison; and
• in determining whether a trademark is similar, the significance and popularity of the registered trademark for which protection is requested shall be taken into account.

According to article 8 of the Interpretation, the ‘relevant public’ (within the meaning of the Trademark Law) refers to consumers related to a certain class of goods or services identified in the trademark registration and other business operators who are closely related to the marketing of the goods or services.

According to the provisions of these laws and regulations, the courts shall make a judgment in accordance with the above principles when determining whether trademarks are identical or similar; therefore, the following factors should be considered when determining if the allegedly infringing trademark is likely to cause confusion:

• the popularity and salience of the plaintiff’s trademark;
• the degree of similarity between the trademark and the allegedly infringing mark;
• the degree of similarity between the categories of goods or services; and
• the use of the allegedly infringing logo.

The types of confusion for the relevant public mainly include source confusion (ie, the public are confused as to where the goods or services originate from) and association confusion (ie, the public are misled into believing that the defendant has a licensee relationship with the plaintiff or a specific connection with the plaintiff, such as being an associated company).

According to article 11 of the Interpretation, the term ‘similar commodities’ (under article 57(2) of the Trademark Law) refers to commodities that are identical in function, use, production department, sales channels and consumption object (among other aspects) or that are generally considered by the relevant public to have specific connections to one another, resulting in confusion among the public. ‘Similar services’ refers to services that are the same in terms of purpose, content, method or object (among other aspects) or that the relevant public generally believe have a specific connection to one another, also resulting in confusion. If goods and services are similar, there is a specific connection between the goods and the services, which can easily cause confusion among the relevant public.

According to article 12 of the Interpretation, in accordance with the provisions of article 57(2) of the Trademark Law, the people’s court determines whether goods or services are similar, and makes a comprehensive judgment based on the relevant public’s general understanding of the goods or services. The International Classification of Goods and Services for Trademark Registration, and the Classification of Similar Goods and Services, can be used as reference points when judging whether goods or services are similar

When the court determines whether goods or services are similar, the Similar Goods and Services Division Table is only used as a reference. When judging whether goods are similar, the court must focus on whether the function, use, production department, sales channels, consumption object and other aspects of the goods are the same, and whether it will cause confusion among the relevant public. When judging whether services are similar, the court must consider whether the purpose, content, method, object and other aspects of the services are the same, and whether it will cause confusion among the relevant public.

Footnotes