Abstract: In the determination of trademark infringement, whether the use of the accused trademark is used to identify the source of goods, thus constituting the use of trademark according to the law, is the premise of the determination. After the premise of trademark infringement is satisfied, it is still necessary to determine whether the conduct meets the other elements of trademark infringement, and the core of the determination lies in whether it affects the function of trademark identification and thus leads to confusion in the market. The likelihood of confusion is the core and fundamental of trademark infringement determination.

Abbreviature of Adjudication

The basic function of a trademark is to identify the source of goods or services, and the purpose of establishing trademark rights is to protect the distinguishing function of a trademark and prevent confusion and misunderstanding by the relevant public. In the determination of trademark infringement, whether the use of the accused trademark is used to identify the source of goods, thus constituting the use of trademark according to the law, is the premise of the determination. After the premise of trademark infringement is satisfied, it is still necessary to determine whether the conduct meets the other elements of trademark infringement, and the core of the determination lies in whether it affects the function of trademark identification and thus leads to confusion in the market. The likelihood of confusion is the core and fundamental of trademark infringement determination.

Case Introduction

Plaintiff: Shenyang Aierma Trading Co., Ltd. (hereinafter: Aierma Company)

Defendants: Kou and Zhejiang Taobao Network Co., Ltd. (hereinafter: Taobao Company)

The plaintiff Aierma Company applied to The Trademark Office under the State Administration for Industry and Commerce on November 30, 2015 to register the trademark "Bai Li Ben Neng and cat figure", and was approved on January 7, 2017 with the trademark registration certificate No. 18463413, the approved use of goods for the international classification of Class 31 "Grain (cereals); Animal foodstuffs; Stall food for animals" and other commodities. In July 2017, Aierma Company started selling "Bai Li Ben Neng" cat food and other pet food, and its products were marked with the marks "Bai Li Ben Neng in Chinese and cat figure " and "Natural Instinct (Bai Li Ben Neng in Chinese)".

On October 23, 2017, the plaintiff obtained notarized evidence and found that the defendant Kou was selling "Nature's Variety Instinct (known as Bai Li Ben Neng in Chinese)" pet food in his Taobao store, using "Bai Li Ben Neng" "U.S. Bai Li Instinct Tian Ran Ben Neng" "U.S. Bai Li Ben Neng" "U.S. Imported Bai Li Tian Ran Ben Neng Instinct" and kitten patterns in the product link name and store promotion. In the product detail description, the brand, manufacturer, manufacturer's address marked "Bai Li" "Bai Li Ben Neng" "Bai Li Instinct Tian Ran Ben Neng". Aierma Company sued Kou for malicious use of its trademark's popularity and illegal use of its trademark for commercial promotion thus infringing its trademark rights, and sued Taobao Company for failed to take review measures and reasonable care, and facilitated Kou's infringement as an e-commerce platform. Aierma Company requested that: (a) the two defendants stop infringing and compensate the plaintiff for damages; (b) the defendant’s Taobao store post notices to apologize and eliminate the adverse impact.

The defendant Kou argued that: the name of the goods sold by the store is U.S. Nature's Variety, is provided by the Bai Pei Trade Co., Ltd. and authorized to sell; Bai Pei Trading Co., Ltd. was authorized by Tianjin Nature's Variety China Co., Ltd. and was provided sources of goods for downstream customers in the China mainland. "Instinct (known as Ben Neng in Chinese)" is only a series of U.S. Nature's Variety Cat Food, and some of the pictures and texts in the shop are also provided by the supplier; the kittens pattern used in the shop is the watermark used by the store to upload pictures, and some pictures are their own cats. Therefore, Kou claimed that it did not constitute infringement, and requested the dismissal of the plaintiff's claim.

The defendant Taobao Company argued: Taobao did not implement any infringement of the plaintiff's trademark rights, should not be liable for infringement.

Court Hearing

The Secondary Intermediate People's Court of Tianjin held that the plaintiff Aierma Company was the exclusive owner of the registered trademark No. 18463413 "Bai Li Ben Neng and cat figure", which was still within the protection period and should provide legal protection for the plaintiff's legitimate rights and interests. The defendant Kou sold the "Nature's Variety Instinct" pet food produced in the United States in his Taobao shop. In the links of four products, the brand of the products, manufacturers, and manufacturing address marked with "U.S. Nature's Variety Instinct (U.S. Bai Li Instinct Tian Ran Ben Neng in Chinese)" "U.S. Nature's Variety (U.S. Bai Li Ben Neng in Chinese)" "Nature's Variety Instinct (Bai Li Tian Ran Ben Neng in Chinese)". The use of these words is the use of trademark according to the law to identify the source of goods.

The defendant Kou used the above expression for "Nature's Variety Instinct" product is the same product as the product approved by the plaintiff's registered trademark "Bai Li Ben Neng and cat figure". The logo has a certain similarity, but it is intended to express the origin, manufacturer and brand of the goods it sells, that is, made in the United States, products of Nature's Variety, and instinct series of cat food. Considering that the goods sold by the defendant Kou are authorized to be sold by Nature's Variety China Limited, and the anti-counterfeiting label specified in the authorization is also "Nature's Variety Instinct", there is a certain basis for the defendant Kou to use the above method to express its products, and it does not have a subjective psychological attitude of malicious using the plaintiff's "Bai Li Ben Neng and cat figure", free-riding the plaintiff's trademark popularity, or confusing customers about the two brands.

Based on the above circumstances, in view of the fact that the defendant Kou has abandoned using the expression of "Bai Li" and "Ben Neng" together in its Taobao store, and the available evidence does not determine that such use has caused damage to the plaintiff's trademark, so the court ruled: the plaintiff Aierma Company's request for the two defendants to stop infringement, apologize and compensate for damages was rejected.

Case Analysis

The use of trademark according to the law is the premise of trademark infringement

As a commercial mark, the most basic function of a trademark is to identify the source of goods or services in order to distinguish the goods or services from different producers. In short, it is to "show oneself and distinguish from others". "The life of a trademark lies in its use, through which the basic function of indicating the source of goods or services can be realized, and therefore the use of trademark has a central position in trademark law." [1]

The play of the identification function of a trademark depends on the use of the trademark, and a trademark can only play its identification function if it is actually used on goods so that consumers can establish a specific connection between the goods and the trademark. However, in the field of trademark law, using trademark and the use of trademark according to the law have different legal connotations. Then what is the use of trademark according to the law? Article 48 of the Trademark Law of the People's Republic of China provides that "the use of trademarks herein refers to such activities as using trademarks on goods, goods packaging or containers and goods transaction documents, or using trademarks in advertising, exhibits and other commercial events so as to identify the sources thereof." The article makes a clear definition of the use of trademark according to the trademark law. Although using trademarks on goods, goods packaging or containers and goods transaction documents, or using trademarks in advertising, exhibits and other commercial events belong to the use of trademark, it is not a conduct of use in the sense of trademark law. "Used to identify the source of goods" is the essential characteristic of use in the sense of trademark law. To determine whether a conduct infringes the exclusive right to use a registered trademark, the first step is to determine whether the allegedly infringing conduct of use is used to identify the source of goods or services, that is, only the conduct of use used to identify the source of goods or services can be called the conduct of use in the sense of trademark law. If the use of the same or similar text, graphics and other marks as the registered trademark of others does not have the function of identifying the source of goods or services, such use does not play the function of trademark identification, and cannot be called the use in the sense of trademark, and therefore does not constitute an infringement of the exclusive right of the registered trademark of others.

In the disputes over infringement of trademark rights between Shanghai Jin Yi Jiu Da Wine Co., Ltd. v. Tianjin Bian's Group Ltd. case held by Tianjin High People's Court, Shanghai Jin Yi Jiu Da Wine Co., Ltd. registered the "Jin Yi Jiu Da" text and graphics trademark in the category of wine. The company is the exclusive distributor in mainland China of Dynasty Company’s French origin wine in "Wang Chao" "DYNASTY" brand, and the "Jin Yi Jiu Da" trademark is printed under the label on the bottle back of the wine in question. The Court of Second Instance held that the relevant consumers purchased the goods based on the perception that the "DYNASTY" brand was printed on the front label of the bottle, and the "DYNASTY" trademark was the use of trademark according to the trademark law of the goods in question. Although Shanghai Jin Yi Jiu Da Wine Co., Ltd. printed the trademark in question on the infringing goods, the use of this trademark does not have the function and role of identifying the source of the infringing goods, and does not belong to the use of trademark according to the trademark law, so its litigation request cannot be supported by the court.

It can be seen that, in the determination of trademark infringement, whether the infringing conduct constitutes infringement, the use should first be examined to determine whether the use constitutes the use of trademark according to the trademark law. Only when this premise is met, the possibility of trademark infringement exists.

The likelihood of confusion is fundamental to trademark infringement determination

In the determination of trademark infringement, the fact that the accused conduct constitutes the use of trademark according to the trademark law is a prerequisite for the determination of infringement. After this condition is met, it is still necessary to examine whether the conduct being sued is consistent with the other elements of trademark infringement, instead of merely determining that it constitutes trademark infringement. Among them, the likelihood of confusion is fundamental to the determination of trademark infringement.

The amended Trademark Law in 2013 established the criteria for determining trademark infringement in terms of the likelihood of confusion. Article 57 of the Trademark Law provides: "Any of the following conducts shall constitute an infringement of the exclusive right to use a registered trademark:

(1) Using a trademark that is identical with a registered trademark on the same goods without the licensing of the trademark registrant;

(2) Using a trademark that is similar to a registered trademark on the same goods, or using a trademark that is identical with or similar to a registered trademark on similar goods, which may be easily confusing, without the licensing of the trademark  registrant;"

The above provisions make the likelihood of confusion standard clear in the legislation and also provide a legal basis for adjudication by the likelihood of confusion standard in judicial practice. It should be noted that in the case of trademark infringement of "using a trademark that is identical with a registered trademark on the same goods", the law does not consider "easily confusing" as an element to constitute infringement, but rather tacitly assumes that in the case of "dual identity", confusion in the marketplace is bound to occur as long as it constitutes the use of trademark according to the trademark law, without regard to whether there is a "easily confusing" situation.

So, is there no need to consider the likelihood of confusion in such cases? It has been suggested that in the case of "dual identity", "the absence of a likelihood of confusion makes this provision quite inappropriate"[3] and further noted that "Article 16(1) of the TRIPS Agreement stipulates 'In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed.'. The 'shall be presumed' suggests that there is no likelihood of confusion if there is evidence to the contrary". Some scholars also hold the same view, arguing that "in some special cases, 'dual identity' does not lead to confusion, when the doctrine of confusion should still be upheld and no infringement can be found." [4]

The author agrees with the above view. Although in the case of "dual identity" trademark infringement, it often leads to the existence of confusion in the market, and the law does not provide for "easily confusing" as its constitutive element, but the existence of this default confusion, after all, is not without exceptions, the accused infringer still has the right to prove that confusion does not exist, and if there is sufficient evidence, the claim should be supported by law. Therefore, in the determination of trademark infringement, the likelihood of confusion should still be the criterion for determining whether the infringement is committed. Moreover, "a trademark is a kind of market mark, which is not only a symbol composed of words and graphics, but also the goodwill of the actual user, and often represents a market pattern or a division of the market pattern. A trademark with the significance of dividing the market pattern means that it can be distinguished from other trademarks and represents an objective material existence, and should be treated with extra caution when deciding whether to cancel or to determine whether it constitutes infringement。 The decision making cannot start from the concept and engage in book worship, and cannot be idealized and artificially cut behind closed doors"[5].

In summary, the author believes that in the determination of trademark infringement, it should always focus on whether it is "easily confusing" and whether there is a likelihood of confusion, in order to make the correct factual determination and legal application of the case. Even in the case of "dual identity", the case should be handled according to this logic and this standard.

Specific analysis of this case

In this case, the court, in the process of determining trademark infringement, first determined whether the defendant's use of the similar trademark constituted the use of trademark according to the law. Only after this major premise was determined, there was a meaningful determination of whether the case constituted infringement. Unlike the common practice of using trademarks directly on the packaging of goods, the defendant in this case, as the operator of an online store, only used the similar mark in the links to the goods and the description of the product, but the purpose of such use was to promote and display the goods for sale, which is a conduct of use for identifying the source of goods in commercial activities and constitutes the use of trademark according to the law.

The defendant's conduct constituted the use of trademark according to the law of a similar trademark on the same goods, and the focus and difficulty of this case was to determine whether such use was likely to cause confusion. In the process of determining the likelihood of confusion, the court not only considered whether the categories of goods were the same, the similarity of the trademark, the popularity of the plaintiff's trademark, the defendant's use, the packaging and decoration of the defendant's goods and the trademark used, but also analyzed the defendant's subjective intent and held that the defendant's use of the similar trademark was based on the registered trademark of the pet food trademark registrant in China and the dealer's use of the trademark, the way of use, the name of the distributor, and other facts, thus finding that the defendant's use of the trademark was reasonable and had no subjective purpose of maliciously take advantage of the plaintiff's trademark. In addition, the court also took into consideration the fact that the plaintiff had repeatedly imitating others’ trademarks and registered in bad faith and the plaintiff’s subjective purpose. The court concluded that the defendant's use did not cause confusion in the market, and that there was no likelihood of confusion, and did not constitute trademark infringement.

References

1 Huang Yanli, 2017. The Use of Trademark According to the Law is the Premise and Basis for Determing Trademark Infringement", Application of Law (Judicial Cases), No. 22.

2 See Final Civil Judgment of Tianjin High People's Court (2016) No.248.

3 Sun Guorui, Luo Yuzhen, 2016. The Status of Likelihood of Confusion and its Influencing Factors in Trademark Infringement Determination, China Trademark, No. 3.

4 Wang Qian, 2019. Tutorial on Intellectual Property Law (Sixth Edition), People's University of China Press, p. 502.

5 Kong Xiangjun, 2014. Basic Issues of Trademark Law Application, China Legal Publishing House, p. 122.