For unifying IP law enforcement standards, improving consistency of case handling, and guiding authorities for IP administrative enforcement, the China National Intellectual Property Administration (CNIPA) released five guiding cases on December 14, 2020 (guiding cases No. 1 to No. 5).
The first three cases are about trademark infringements, the fourth is about divisional patent application, and the fifth is for integrated circuit layout design.
In this article, we have summarized the first three trademark cases for your reference.
Case No. 1 - "DUN & BRADSTREET" Trademark Infringement Case
Case highlights: The use of another's registered trademark in keywords advertising and the display of another's registered trademark in the search result page constitute trademark use.
Stakeholder: Shanghai Huaxia Dun & Bradstreet Business Information Consultation Company (Shanghai Dun & Bradstreet)
Infringer: Shanghai Zhangyuan Information Consultation Company (Shanghai Zhangyuan)
Shanghai Dun & Bradstreet is the subsidiary of the US Dun & Bradstreet. It is authorized to use the disputed trademark "邓白氏" (Deng Shi Bai in Pinyin; Dun & Bradstreet in Chinese). Shanghai Zhangyuan is an ex-franchisee of the US Dun & Bradstreet.
After the franchising relationship finished, Shanghai Zhangyuan used "[Official] DUN & BRADSTREET Coding-internationally recognized-global common enterprisecoding system" as keywords to promote its own business.
Consequently, there were eight enterprises that mistakenly believed that Shanghai Zhangyuan is the franchisee of the US Dun & Bradstreet International Ltd.
By the time the case was examined, Shanghai Zhangyuan had received almost 180,000 RMB service fees. The MSA decided that Shanghai Zhangyuan should stop infringement actions, and should befined for about 540,000 RMB based on Article 57.2 and 60 of the Trademark Law.
It is hard to define "use" in the environment of the Internet. There are still many disputes about whether the use of other's trademark as keywords should constitute trademark infringement.
This case sets a standard for defining "use" in regards to keyword search. The standard is that when keywords can lead internet users to a website of a third party, and make relevant consumers mistakenly believe that the website has a relationship with the trademark rights owner, the use of the keywords should belong to the "use" of trademark prescribed by Article 48 of the Trademark Law.
Case No. 2 "Tiger" Trademark Infringement Case
Keywords: vendor exemption; Infringement defense; knowing; should know
Case highlights: The seller and the supplier have a shareholder cross-employment materially related relationship, and the supplier used to file trademark applications that similar to the real trademark owner's trademark. Thus, the authority implied that the seller knew or should know the disputed trademark, and cannot be exempted.
Right holder: Asics Corporation
Infringer: Beijing Hongyuanli Trading Company
On January 9, 2018, in a raid action, Beijing City MSA found counterfeit goods bearing below trademarks or logos sold by Beijing Hongyuan Lide Co., Ltd.
Beijing Hongyuanli Trading Company signed a Franchise Contract with Quanzhou Qishi Keshi Sporting Goods Co., Ltd. for selling ASICS Tiger brand sport shoes. When MSA examined the case, the infringer tried to argue that it did not know the goods are counterfeits and thus should be exempted.
However, the officers have found that the infringer has an essential relationship with Quanzhou Qishi Keshi Sporting Goods Co., Ltd, namely its supplier.
There is cross-employment between shareholders, and the supplier tried to apply for trademarks similar to ASICS's trademark. Thus, the infringer's argument for not knowing the goods are counterfeits is untenable.
The total amount of illegal business of the infringer is 11,154,707.24 RMB. Consequently, the MSA confiscated 6,687 pairs of shoes, fined the infringer 55,773,536.20 RMB, and requested the infringer to stop the infringement immediately.
In this case, the infringer tried to argue for vendor exemption by claiming that it does not know the goods are counterfeits.
However, not knowing is not enough for claiming vendor exemption.
According to Article 60 of the Trademark Law, vendor exemption needs to satisfy the following three conditions: first, the vendor does not know the goods are counterfeits; second, the vendor can prove that the goods are lawfully acquired; third, the vendor can provide the information about the provider of the goods. Thus, even if the infringer does not know that the goods are counterfeits, it still constitutes trademark infringements; let alone in this case that the infringer knew the goods are counterfeits
Case No. 3 "CKS 科顺" Trademark Infringement Case
Keywords: Sales infringement, labour and materials contract, processing contract
Case highlights: In the contracting work, the contractor's purchase and use of goods that infringe the exclusive rights of others' registered trademarks constitutes an act of selling counterfeit goods.
Infringer: Wuhan Keshun United Waterproof Engineering Co., Ltd. (Wuhan Keshun)
Right holder: Keshun Waterproof Technology Co., Ltd.
During a regular inspection, Wuhan MSA has found 60 rolls of suspected counterfeit Keshun waterproof coils at the construction site. The infringer is a contractor in a labour and materials processing project in the field of construction, who purchased counterfeit "CKS 科顺"(CKS Keshun) products. These products have not been paid for and are not in use.
The MSA decided that although the contractor has not actually used those products, purchasing counterfeit material, and intending to use these products in the project are deemed as selling behaviour.
The authority decided that the infringer should immediately stop the infringement, confiscate and destroy the counterfeit goods, and be fined 200,000 RMB.
According to Article 57 of the Trademark Law, infringement behaviour includes using, selling, manufacturing etc. Purchasing behaviour itself is not recognized as a trademark infringement action. However, in the "CKS 科顺" case, purchasing behaviour itself is deemed as a trademark infringement.
The MSA explained that first, in the field of construction and decoration, the contractor is in charge of purchasing and construction. The use of counterfeit goods by a contractor is with a selling purpose. Thus, contractors are different from general consumers.
Second, contractors plan to use counterfeit goods in construction, and the outcome of the construction will be handed to the client. The relationship between client and contractor is purchasing and selling relationship. Thus, the disputed action violates Article 57.3 of the trademark law.
The PRC has a law system based on statutory law, which means the court and other authorities are not usually bound by judicial precedents.
Nevertheless, in the field of IP law, it is worth to note that the PRC in recent years begins to stress the importance of precedents. It is safe to predict that the PRC will encourage IP law practitioners to use the reference of precedents in making consistent judgments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
