Re-anal­y­sis of “PRETUL” Re­trial Case in Terms of In­fringe­ment Judg­ment Cri­te­rion

China's Foreign Trade (English) - - Contents - By Dong Xiaomeng

Is it ra­tio­nal to take “trade­mark use in the sense of trade­mark law” as the pre­con­di­tion of trade­mark in­fringe­ment judg­ment in China?

Though in “PRETUL” re­trial, the im­me­di­ate ground for the SPC to deny the in­frin ge­ment com­plaint is “the trade­mark in is­sue did not qual­ify as trade mark use”, it is too early to sim­ply draw a con­clu­sion from this case that “trade­mark use in the sense of trade­mark law” is the pre­con­di­tion of trade­mark in­fringe­ment judg­ment in China.

First, there is no pro­vi­sion in the laws un­der which “trade­mark use in the

sense of trade­mark law” is an es­sen­tial fac­tor in de­ter­mi­na­tion of trade­mark in­fringe­ment.

Sec­ond, cur­rently in China, if a mark is used in OEM process, such use ev­i­dence will be re­garded ef­fec­tive in main­te­nance of the mark against non-use can­cel­la­tion re­quest.

Third, whether “trade­mark use in the sense of trade­mark law” is a pre­con­di­tion in find­ing trade­mark in­fringe­ment is con­tro­ver­sial in theor y and prac­tice. Ob­jec­tors such as Graeme B. Din­woodie and Mark D. Ja­nis hold that “trade­mark use in the sense of trade­mark law” lacks strong ba­sics of law. Boost­ers such as

Stacey L. Do­gan and Mark A. Lem­ley hold that “trade­mark use in the sense of trade­mark law” sits at the heart of trade­mark law, which is a nec­es­sary tool to main­tain in­tegrity of trade­mark law. It is not fab­ri­ca­tion by imag­i­na­tion.

Re-anal­y­sis of “PRETUL” re­trial case in terms of in­fringe­ment judg­ment cri­te­rion in China.

Ac­cord­ing to Art. 57 of the Trade­mark Law, any of the fol­low­ing con­sti­tutes an in­fringe­ment of the ex­clu­sive right to use a reg­is­tered trade­mark: 1. Us­ing a trade­mark that is iden­ti­cal with a reg­is­tered trade­mark in con­nec­tion with the same goods

with­out the au­tho­riza­tion of the owner of the reg­is­tered trade­mark; 2. Us­ing a trade­mark that is sim­i­lar to a reg­is­tered trade­mark in con­nec­tion with the same goods, or that is iden­ti­cal with or sim­i­lar to a reg­is­tered trade­mark in con­nec­tion with the sim­i­lar goods, with­out the au­tho­riza­tion of the owner of the reg­is­tered trade­mark, which may cause pub­lic con­fu­sion.

Ac­cord­ing to Art. 16 of TRIPS, the owner of a reg­is­tered trade­mark shall have the ex­clu­sive right to pre­vent all third par­ties not hav­ing the owner’s con­sent from us­ing in the course of trade iden­ti­cal or sim­i­lar signs for goods or ser­vices which are iden­ti­cal or sim­i­lar to those in re­spect of which the trade­mark is reg­is­tered where such use would re­sult in a like­li­hood of con­fu­sion. In case of the use of an iden­ti­cal sign for iden­ti­cal goods or ser­vices, a like­li­hood of con­fu­sion shall be pre­sumed. The rights de­scribed above shall not prej­u­dice any ex­ist­ing prior rights, nor shall they af­fect the pos­si­bil­ity of mem­bers mak­ing avail­able on the ba­sis of use.

Like pro­vi­sions of TRIPS, “like­li­hood of con­fu­sion” cri­te­rion is adopted in China on trade­mark in­fringe­ment is­sues. Namely, in case of the use of an iden­ti­cal sign for iden­ti­cal goods or ser­vices, a like­li­hood of con­fu­sion shall be pre­sumed, while in the other cases, whether in­fringe­ment should be con­firmed will de­pend on whether there is a like­li­hood of con­fu­sion.

For “like­li­hood of con­fu­sion” cri­te­rion, most coun­tries use “Multi fac­tor de­tec­tion method”. Nor­mally, four fac­tors are­con­sid­ered in de­ter­min­ing whether there is trade­mark in­fringe­ment, i.e., trade­mark fac­tor, goods/ser­vices fac­tor, con­sumer fac­tor and oth­ers. In “PRETUL” case, the four fac­tors could be an­a­lyzed as be­low:

Trade­mark fac­tor: Though the mark used by the de­fen­dant and the plain­tiff are sim­i­lar, on the ex­ter­nal packing and di­rec­tions of the prod­ucts in is­sue, the il­lus­tra­tions “Im­porter: TURPER” in Span­ish could all be found. In ad­di­tion, the con­tact chan­nels of TURPER, in­clud­ing tele­phone num­bers and web­site, were also shown on prod­ucts. Hence, no mat­ter for Mex­i­can or Chi­nese con­sumers, they could quickly re­al­ize that the prod­ucts in is­sue are from TURPER, not FOCKER.

Goods/ser­vices fac­tor: The prod­ucts in is­sue by the de­fen­dant were 100% ex­ported to Mex­ico, while, the goods of the plain­tiff were used in main­land China since there was no con­trary ev­i­dence prov­ing its goods were ex­ported out of China. The goods of both par­ties were used in com­pletely dif­fer­ent mar­ket­ing chan­nels and fac­ing to­tally dif­fer­ent con­sumers. The goods of the plain­tiff and de­fen­dant are not sim­i­lar considering the afore­men­tioned.

Con­sumer fac­tor: All the pad­locks man­u­fac­tured by YAHUAN were ex­ported to Mex­ico. The con­sumers of these prod­ucts are all for­eign con­sumers. But, the plain­tiff’s con­sumers are in main­land China. The two brands face dif­fer­ent con­sumers.

Oth­ers: First, the “PRETUL” branded pad­locks man­u­fac­tured by YAHUAN were all en­trusted by “TURPER” (a Mex­i­can dealer) and all the pad­locks were ex­ported to Mex­ico. “TURPER” had reg­is­tered “PRETUL” mark No. 770611 in class of 6 in Mex­ico on Novem­ber 27, 2002.

Sec­ond, YAHUAN sub­mit­ted a lot of ev­i­dence prov­ing TURPER com­pany’s PRETUL mark had high rep­u­ta­tion through wide use, but there’s no ev­i­dence prov­ing the FOCKER com­pany’s PRETUL mark had cer­tain in­flu­ence.

Third, what’s more, there are suf­fi­cient ev­i­dence to tes­tify that the plain­tiff’s PRETUL mark was filed in pla­gia­rism of the de­fen­dant’s marks and the plain­tiff’s mark was ob­tained against Hon­esty and Cred­i­bil­ity Prin­ci­ple.

In con­clu­sion, considering the trade­mark, goods, con­sumers and other fac­tors, no con­fu­sion like­li­hood ex­ists for use of the trade­mark in is­sue in this case. Based on “con­fu­sion like­li­hood cri­te­rion”, it is rea­son­able to af­firm the OEM man­u­fac­turer’s act of us­ing the trade­mark in is­sue did not con­sti­tute trade­mark in­fringe­ment.

How to cor­rectly treat the func­tion of “trade­mark use in the sense of trade­mark law” in trade­mark in­fringe­ment cases?

“Trade­mark use in the sense of trade­mark law” is not an in­de­pen­dent fac­tor. It is just one fac­tor of pos­si­bil­ity of con­fu­sion judg­ment. “Trade­mark use in the sense of trade­mark law” is in­ter­nal­ized in­judg­ment of in­fringe­ment process. In “PRETUL” re­trial case, the SPC cracked problem from the an­gle of “Trade­mark use in the sense of trade­mark law” based on case de­tails, which has re­flected its ex­treme high ju­di­cial wis­dom. But in essence, the spirit of this re­trial judg­ment has fol­lowed “like­li­hood of con­fu­sion prin­ci­ple cri­te­rion” and based on such cri­te­rion, the same con­clu­sion could be achieved, that is, OEM man­u­fac­turer’s act of us­ing the trade­mark in is­sue did not con­sti­tute trade­mark in­fringe­ment.

(Au­thor: from the CCPIT patent and trade­mark law of­fice)

[ Brief in­tro­duc­tion of “PRETUL” re­trial case ]

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