China: Several Special Trademark Infringement Questions For IPR Customs Protection In China

The customs protection of intellectual property in China is not only for fulfilling the WTO commitments, but also showing the firm determination of Chinese government fighting against the infringement of intellectual property rights. In the implementation of "One Belt One Road" initiative, the intellectual property rights in customs have played an important role in enhancing China's international reputation and stabilizing its international trade.

For all the infringement case import and export, the trademark infringement occupied the majority in term of the quantity. As of June 2017, there were 27,495 trademarks registered in China's Customs General Administration.in which period of time the Chinese customs seized 17,400 batches of suspected infringing goods, involving a total of 414564 thousand pieces, among which the trademark infringement case are as high as 40.25 million goods , accounting for 98.56 percent of the total number of suspected infringing goods. Therefore, this paper is more focusing on trademark infringement, hoping to provide a reference for judicial practice by analyzing several special cases of trademark infringement.

QUESTION 1

The separation of trademark Logo from goods.

The separation of goods and trademark Logo is considered as an act relatively shady. If the customs is able to obtain evidence at this time, and to prove that the trademark is intended to be used in conjunction with the goods, then the administrative penalty should be imposed as long as they meet the requirements of infringement.

According to "Opinions of the Supreme People's court, the Supreme People's Procuratorate and the Ministry of Public Security on the application of law in handling criminal cases of IPR infringement", for products that have been manufactured but have not yet attached to counterfeit registered trademark Logo, if there are sufficient evidences to prove that the commodity will be attached with the trademark Logo, it will undoubtedly constitute infringement.

In 2008, Customs Administration of Shandong province seized thousands boxes of export motorcycle accessories and "SUZUKI" trademark Logo. The vehicle keys were also marked "SUZUKI". Moreover, the size and shape of the above mentioned Logos are completely coincide with reserved position in the in the engine and fuel tank. The customs finally decided that the vehicle was infringement, and imposed administrative penalty on it.

QUESTION 2

Using the registered infringing trademark only on the outer packing of the goods.

"The TRIPS Agreement" and Article 48 of "Trademark Law" have the same regulation for limiting the scope of "use in business" in their own provisions. It refers to the commodity, package of commodity or container and transaction instrument, also the trademark used for advertising, exhibition and business activities. In the past cases, it is frequently occurred that the infringing trademark only be used on the outer packaging of commodities, but without any identification for the goods themselves.

Trademark infringement shall be judged by the standard that whether it will cause confusion to consumers so that they cannot identify the origin of goods. As the outer packing belongs to an integral part of the commodity, and it is delivered to consumers together with the goods, with which the consumers judge the origin of the product. Therefore, outer packing should be amplified in interpretation as part of the commodity.

For example, in 2011, Customs administration of Shanghai seized a batch of car fan couplers. The "Mercedes-Benz" logo is used on the outer box, the fan coupler itself, however, does not have a trademark on it. The customs declared that it did constitute infringement due to public will think the package and product as a whole, although the producer claims they did not use the trademark on production but only on boxes.

QUESTION 3

Use of the infringing trademarks only in Customs Declaration Documents

The use of trademarks in commercial documents shall also be regarded as the use of trademarks for commercial purposes. For example, "the State Administration for Industry and Commerce of the People Republic of China on how to understand the 'use' in the first item of Article 38 of the trademark law"(industrial and commercial code [1995] No. 129) clearly states:" Sales invoices, contracts and other commercial documents are an important part of commodity trading activities." Therefore, in the aforementioned commercial documents, it is also regarded as the 'use' of the trademark.

However, we believe that despite infringing trademark being labeled in the Declaration of Customs, it is still not linked to the product directly. I.e., if there is a trademark in the Customs Declaration Document of one production, but the trademark does not appear on the production and package, the customs should not decide that it is an infringement action, it also needs to collect further evidence, which is a case by case identification process.

In addition, sometime although the behavior using trademark have been made, however, whether it constitutes infringement should finally be judged by the elements of infringement. According to Article 57 of "Trademark Law of China", the judgment standard of trademark infringement clearly requires the trademark must be used on the product, due to the protection object of trademark right is the product itself. Therefore, the trademark used in customs declaration documents, but not actually used on the product, should not be directly deemed to constitute infringement, which is a different situation with using the trademark on the outer package in above stated question 2. In practice, the customs also uphold the same standards to enforce the law.

QUESTION 4

OEM trademark infringement possibility analysis.

OEM, is an intellectual property issue in international trade. For the import direction, there is no dispute for it does not constitute infringement. For export direction, however, it isn't the case; China was heavily relying on it to drive GDP for past decades. For this issue, there are two different views on infringement or not.

The positive view said that foreign OEM business are also required to emphasize the dignity and authority of the trademark protection system in China and to encourage trademark holders' enthusiasm, which is consistent with the national strategy to protect intellectual property right and keeping development and innovation order of our country, so infringement should be determined. On the opposite, the negative view representing it does not constitute infringement is more overwhelming, and also was the popular principle in judicial precedents.

On November 26, 2015, the Supreme People's Court judged on the case of "Pujiang Yahuan lock co., LTD (Authorized Party, here after) VS Laisi Anti-theft Products International co., LTD (Authorizing Party, here after). Under the infringement trademark dispute" No. 38 (2014) the people civil judgment, decided that the authorized Party manufactured by instruction from others, and export to Mexico padlock with "PRETUL" mark after. According to the Supreme People's Court, the logo attached to the commissioned processing products does not have the function of distinguishing the origin of the processed commodity. Therefore, the attached logo does not have the attribute of trademark. It leads the conclusion that the act of attaching a logo to a product cannot be regarded as a trademark use here, so it does not constitute trademark infringement.

The court did not further examine whether the logo within the case were identical or similar, but noted:" The Company is commissioned by the authorizing party to produce padlocks in accordance with its requirements, and use the 'PRETUL' related logo on padlocks and export them all to Mexico. The padlock is not sold in the Chinese market. That is to say, the logo will not play the role of trademark recognition in our country, and will not cause confusion and mistakes before Chinese consumers; the OEM in China should not be regarded as infringement eventually.

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.

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